DoD Awards $4.38 Billion for CH-47F Chinook Aircraft, Sole-Sourced to Boeing
Contract Overview
Contract Amount: $4,379,037,328 ($4.4B)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2008-08-26
End Date: 2015-12-31
Contract Duration: 2,683 days
Daily Burn Rate: $1.6M/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: CH-47F MULTI-YEAR CONTRACT FOR NEW BUILD AND REMANUFACTURE AIRCRAFTS
Place of Performance
Location: RIDLEY PARK, DELAWARE County, PENNSYLVANIA, 19078
Plain-Language Summary
Department of Defense obligated $4.38 billion to THE BOEING COMPANY for work described as: CH-47F MULTI-YEAR CONTRACT FOR NEW BUILD AND REMANUFACTURE AIRCRAFTS Key points: 1. Significant investment in critical aviation assets for the Army. 2. Sole-source award to Boeing raises questions about price competition. 3. Long-term contract duration may present risks if requirements change. 4. Focus on aircraft manufacturing, a key defense industrial base sector.
Value Assessment
Rating: fair
The contract value is substantial, but without competitive bidding, it's difficult to assess if the price reflects fair market value. Benchmarking against similar sole-source aircraft procurements would be necessary.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, meaning the Department of Defense did not solicit bids from multiple vendors. This limits price discovery and potentially leads to higher costs compared to a competitive process.
Taxpayer Impact: The lack of competition means taxpayers may not be receiving the best possible price for these aircraft, potentially leading to inefficient use of public funds.
Public Impact
Ensures continued availability of the CH-47F Chinook, a vital heavy-lift helicopter for military operations. Supports jobs and economic activity within the aerospace manufacturing sector. Potential for long-term reliance on a single supplier for critical aviation platforms.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Sole-source award
- Long contract duration
Positive Signals
- Essential military asset
- Supports key defense contractor
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, a critical component of the defense industrial base. Spending in this area is often characterized by high R&D costs, long production cycles, and significant government oversight due to national security implications.
Small Business Impact
The data indicates this contract was awarded directly to The Boeing Company and does not specify any subcontracting opportunities for small businesses. Further investigation would be needed to determine the extent of small business participation.
Oversight & Accountability
As a sole-source, multi-year contract for a major defense system, this award likely undergoes significant oversight from the Department of Defense's acquisition and auditing bodies. However, the lack of competition inherently reduces market-driven accountability.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award limits competition.
- Potential for inflated pricing due to lack of competition.
- Long contract duration may not align with evolving technology.
- Lack of transparency on small business participation.
Tags
aircraft-manufacturing, department-of-defense, pa, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $4.38 billion to THE BOEING COMPANY. CH-47F MULTI-YEAR CONTRACT FOR NEW BUILD AND REMANUFACTURE AIRCRAFTS
Who is the contractor on this award?
The obligated recipient is THE BOEING COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $4.38 billion.
What is the period of performance?
Start: 2008-08-26. End: 2015-12-31.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair pricing without competition?
Sole-source awards typically require a documented justification, such as the unique capabilities of a specific contractor or the lack of viable alternatives. The government would have likely conducted internal price analyses or used historical pricing data to negotiate the 'firm fixed price' to ensure it was reasonable, though this is less robust than competitive benchmarking.
What are the long-term risks associated with a sole-source, multi-year contract for aircraft manufacturing, particularly regarding technological obsolescence or cost overruns?
Long-term sole-source contracts risk locking the government into potentially outdated technology if market advancements occur. Cost overruns are also a concern, as the contractor may have less incentive to control expenses without competitive pressure. The firm fixed price mitigates some overrun risk, but initial pricing could be inflated.
How does the sustained investment in the CH-47F platform impact the Army's overall fleet modernization strategy and budget allocation?
This significant, multi-year investment suggests the CH-47F remains a cornerstone of the Army's heavy-lift capability. It implies a strategic decision to maintain and modernize this platform rather than pursue entirely new helicopter programs, potentially freeing up funds for other modernization priorities but also concentrating resources.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W58RGZ07R0282
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: ROUTE 291 & STEWART AVE, RIDLEY PARK, PA, 19078
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $4,912,179,014
Exercised Options: $4,379,037,328
Current Obligation: $4,379,037,328
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2008-08-26
Current End Date: 2015-12-31
Potential End Date: 2025-04-17 12:04:00
Last Modified: 2024-04-17
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