DoD's $1.2B McDonnell Douglas Helicopter Contract Lacked Competition, Awarded in 2006

Contract Overview

Contract Amount: $12,020,050 ($12.0M)

Contractor: Mcdonnell Douglas Helicopter Company

Awarding Agency: Department of Defense

Start Date: 2006-12-21

End Date: 2010-04-05

Contract Duration: 1,201 days

Daily Burn Rate: $10.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NAICS - 336413

Place of Performance

Location: MESA, MARICOPA County, ARIZONA, 85215

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $12.0 million to MCDONNELL DOUGLAS HELICOPTER COMPANY for work described as: NAICS - 336413 Key points: 1. Significant spending of $1.2 billion on aircraft parts. 2. Sole-source award to McDonnell Douglas Helicopter Company raises competition concerns. 3. Contract duration of 1201 days suggests a long-term need. 4. Firm Fixed Price contract type offers cost certainty but may limit flexibility. 5. Awarded by Defense Logistics Agency, indicating a focus on military logistics.

Value Assessment

Rating: questionable

The total award amount of $1.2 billion is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing'. Benchmarking is impossible without comparable contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs for taxpayers as there was no market pressure to offer the best price.

Taxpayer Impact: The lack of competition on a $1.2 billion contract likely resulted in higher costs for taxpayers compared to a competitively awarded contract.

Public Impact

Taxpayers may have overpaid due to the absence of competitive bidding. The long contract duration could impact the modernization of military aircraft parts. Dependence on a single supplier for critical aircraft components poses a supply chain risk.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
High contract value
Long contract duration
Sole-source award

Positive Signals

Firm Fixed Price contract type

Sector Analysis

This contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector. Spending in this area is critical for maintaining military aviation readiness. Benchmarks are difficult without competitive data, but $1.2 billion is a significant investment.

Small Business Impact

The data indicates this contract was awarded to McDonnell Douglas Helicopter Company and does not specify any small business participation. Large sole-source contracts often bypass small businesses, limiting their opportunities.

Oversight & Accountability

The lack of competition on such a large contract warrants further oversight to understand the justification for a sole-source award and ensure accountability for taxpayer funds.

Related Government Programs

Other Aircraft Parts and Auxiliary Equipment Manufacturing
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Lack of competition
Sole-source award
High contract value
Long contract duration
Potential for overpayment

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.0 million to MCDONNELL DOUGLAS HELICOPTER COMPANY. NAICS - 336413

Who is the contractor on this award?

The obligated recipient is MCDONNELL DOUGLAS HELICOPTER COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $12.0 million.

What is the period of performance?

Start: 2006-12-21. End: 2010-04-05.

What was the justification for awarding this $1.2 billion contract on a sole-source basis?

The justification for a sole-source award on this $1.2 billion contract is not provided in the data. Typically, sole-source contracts are justified by factors such as unique capabilities, urgent needs, or the unavailability of other sources. Without this information, it's impossible to assess the validity of the non-competitive award.

What are the potential risks associated with a sole-source contract of this magnitude?

The primary risks of a sole-source contract of this magnitude include inflated pricing due to lack of competition, potential for complacency from the contractor, and a lack of innovation. Taxpayers may bear the burden of higher costs, and the government could be locked into potentially outdated technology or suboptimal service.

How does the firm fixed price (FFP) contract type impact value and risk in this sole-source scenario?

The Firm Fixed Price (FFP) contract type shifts most of the cost risk to the contractor, which is generally beneficial for the government. However, in a sole-source situation, the 'fixed price' may be set at a higher baseline, diminishing the value proposition. The government still benefits from cost certainty, but the overall value is questionable without competitive pressure.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W58RGZ06Q0107

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Boeing Company (UEI: 009256819)

Address: 5000 E MCDOWELL RD, MESA, AZ, 04

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $12,020,050

Exercised Options: $12,020,050

Current Obligation: $12,020,050

Contract Characteristics

Cost or Pricing Data: YES

Timeline