Boeing awarded $24.3M for RNLAF support, a sole-source contract with a long performance period

Contract Overview

Contract Amount: $24,340,145 ($24.3M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2008-12-30

End Date: 2020-08-01

Contract Duration: 4,232 days

Daily Burn Rate: $5.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CFSR AND CLS SUPPORT FOR THE RNLAF

Plain-Language Summary

Department of Defense obligated $24.3 million to THE BOEING COMPANY for work described as: CFSR AND CLS SUPPORT FOR THE RNLAF Key points: 1. Contract awarded to a single, established provider, raising questions about competitive pricing. 2. Extended performance duration suggests a long-term need for these specialized support services. 3. The firm-fixed-price structure aims to control costs, but the lack of competition may limit savings. 4. This contract represents a significant investment in maintaining critical air transportation support capabilities. 5. Analysis of historical spending and performance is crucial given the sole-source nature and duration.

Value Assessment

Rating: fair

The total value of $24.3 million over approximately 11.5 years indicates an average annual spend of roughly $2.1 million. Without comparable sole-source contracts for similar RNLAF support, a direct value-for-money assessment is challenging. However, the extended duration and lack of competition suggest potential for higher-than-market pricing. Benchmarking against similar long-term support contracts for other air forces or defense platforms would be necessary for a more robust evaluation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, proprietary technology, or when urgency dictates a rapid award. The lack of competition means that price discovery through market forces was bypassed, potentially leading to less favorable pricing for the government compared to a competed scenario.

Taxpayer Impact: Sole-source awards limit opportunities for taxpayer savings that can arise from competitive bidding. The government may be paying a premium due to the absence of market pressure to offer the lowest possible price.

Public Impact

The Royal Netherlands Air Force (RNLAF) benefits from continued, specialized support for its aircraft. Services provided are critical for maintaining operational readiness and effectiveness of air assets. The contract ensures the availability of essential maintenance, logistics, and technical support. This contract supports specialized technical expertise and potentially a dedicated workforce within The Boeing Company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs over the contract's long duration.
Sole-source awards can reduce transparency and accountability in pricing.
Extended performance period without clear performance metrics could mask inefficiencies.
Dependence on a single contractor for critical support creates potential supply chain risks.

Positive Signals

Firm-fixed-price contract type provides cost certainty for the government.
Long-term award suggests a stable, ongoing requirement and a trusted relationship.
The Boeing Company is a well-established aerospace manufacturer with extensive experience.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on support activities for air transportation. The market for such specialized support services is often characterized by high barriers to entry due to technical expertise, intellectual property, and established relationships. Spending in this area is critical for maintaining the operational readiness of military aviation assets, and contracts can be long-term and high-value, often involving sole-source awards due to the unique nature of the platforms supported.

Small Business Impact

There is no indication that this contract involved small business set-asides. As a sole-source award to a large prime contractor, it is unlikely that significant subcontracting opportunities for small businesses were mandated or actively pursued through a competitive process. The focus is on the prime contractor's capabilities, and the impact on the small business ecosystem would likely be indirect, if at all.

Oversight & Accountability

Oversight for this contract would typically reside within the Department of the Army's contracting and program management offices. The firm-fixed-price nature provides some cost control, but the sole-source aspect necessitates rigorous monitoring of performance and adherence to contract terms. Transparency may be limited due to the non-competitive award, making detailed audits and reviews crucial for accountability. Inspector General involvement would be triggered by specific allegations of fraud, waste, or abuse.

Related Government Programs

Foreign Military Sales Support Contracts
Aerospace Maintenance and Repair Contracts
Defense Logistics Support Services
Aircraft Sustainment Programs

Risk Flags

Sole-source award
Long contract duration
Lack of competition
Potential for cost overruns
Vendor lock-in risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.3 million to THE BOEING COMPANY. CFSR AND CLS SUPPORT FOR THE RNLAF

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 $24.3 million.

What is the period of performance?

Start: 2008-12-30. End: 2020-08-01.

What is The Boeing Company's track record with similar sole-source support contracts for international air forces?

The Boeing Company has a long history of providing support services, including sustainment, maintenance, and logistics, to international air forces for various platforms. Many of these contracts, particularly for specialized or legacy systems, are often sole-source due to the proprietary nature of the technology and the deep integration required. Boeing's track record generally indicates a capacity to deliver complex support solutions. However, the specific terms, pricing, and performance outcomes of past sole-source contracts would need to be examined to fully assess their relevance and potential risks for this RNLAF contract. Analyzing past contract modifications, cost overruns, or performance disputes would provide further insight into their reliability in sole-source scenarios.

How does the $24.3 million total contract value compare to typical annual spending for similar RNLAF support?

The total contract value of $24.3 million spread over approximately 11.5 years equates to an average annual expenditure of roughly $2.1 million. Determining if this is typical requires understanding the specific aircraft platforms and the scope of 'CLS Support for the RNLAF' (Continued Logistics Support). If this covers comprehensive maintenance, spare parts, technical data, and engineering support for a significant fleet, $2.1 million annually might be within a reasonable range for specialized, long-term support, especially considering the sole-source nature. However, without detailed breakdowns of services and comparisons to similar international support agreements for comparable aircraft, it's difficult to definitively benchmark this figure. A higher annual spend might be expected for more complex platforms or broader support scopes.

What are the primary risks associated with a sole-source contract of this duration?

The primary risks associated with a sole-source contract of this duration (over 11 years) include potential cost escalation due to the lack of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and a heightened risk of vendor lock-in. Taxpayers may face higher prices than if the contract had been competed. Furthermore, the long duration increases the dependency on a single supplier, making the RNLAF vulnerable to disruptions if the contractor faces financial difficulties, operational issues, or changes in its strategic priorities. Ensuring robust oversight, clear performance metrics, and fair pricing adjustments over the contract's life are critical mitigation strategies.

What specific 'Other Support Activities for Air Transportation' are likely included under this contract?

Given the context of 'CFSR AND CLS SUPPORT FOR THE RNLAF' (Continued Logistics Support for the Royal Netherlands Air Force) and The Boeing Company as the contractor, 'Other Support Activities for Air Transportation' likely encompasses a range of services beyond basic maintenance. This could include specialized technical support, engineering services for modifications or upgrades, supply chain management for unique parts, training for RNLAF personnel, technical data management, and potentially depot-level repair or overhaul services for specific aircraft components. The 'CLS' designation suggests a comprehensive package aimed at ensuring the operational availability and longevity of the RNLAF's air assets, managed by Boeing as the prime support provider.

How has spending on 'Other Support Activities for Air Transportation' by the Department of the Army trended historically?

Analyzing historical spending trends for the specific PSC code '488190' (Other Support Activities for Air Transportation) by the Department of the Army requires access to detailed federal procurement data. Generally, spending in this category can fluctuate based on modernization programs, operational tempo, and the lifecycle of aircraft fleets. Contracts for air transportation support are often long-term and can represent significant, albeit sometimes lumpy, investments. Without specific historical data for this PSC code, it's difficult to provide precise trends. However, it's reasonable to assume that sustained military aviation operations necessitate consistent, substantial spending on support activities, potentially increasing during periods of heightened global security concerns or fleet upgrades.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W58RGZ08R0125

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5000 EAST MCDOWELL ROAD, MESA, AZ, 85215

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: $24,350,558

Exercised Options: $24,340,145

Current Obligation: $24,340,145

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline