DoD Awards $350M to Boeing for AH-64D/E Apache Parts, Lacking Competition
Contract Overview
Contract Amount: $349,891,900 ($349.9M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2014-11-01
End Date: 2022-01-17
Contract Duration: 2,634 days
Daily Burn Rate: $132.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: IGF::OT::IGF APACHE D UNIQUE, D COMMON PARTS WITH ADDITIONAL REQUIREMENT FOR E UNIQUE AND E COMMON PARTS TO SUPPORT THE AH-64D/E WEAPON
Place of Performance
Location: MESA, MARICOPA County, ARIZONA, 85215
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $349.9 million to THE BOEING COMPANY for work described as: IGF::OT::IGF APACHE D UNIQUE, D COMMON PARTS WITH ADDITIONAL REQUIREMENT FOR E UNIQUE AND E COMMON PARTS TO SUPPORT THE AH-64D/E WEAPON Key points: 1. Significant award to a single, large defense contractor. 2. Focus on critical aircraft sustainment suggests ongoing need. 3. Lack of competition raises concerns about price discovery. 4. Engineering services for complex weapon systems are high-value.
Value Assessment
Rating: questionable
The contract value of $350M over 8 years is substantial. Without competitive bidding, it's difficult to assess if this price represents fair value compared to potential alternatives or market rates for similar engineering services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there is no market pressure to offer the best price.
Taxpayer Impact: The lack of competition likely results in a higher cost to the taxpayer than if the contract had been competitively bid.
Public Impact
Ensures continued operational readiness of the Apache helicopter fleet. Supports high-skilled engineering jobs within the defense sector. Potential for cost overruns due to non-competitive nature. Impacts the supply chain for critical defense components.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Long contract duration
- High dollar value
Positive Signals
- Supports critical defense asset
- Awarded to established prime contractor
Sector Analysis
This contract falls under engineering services for defense, a sector often characterized by long-term, high-value contracts with specialized requirements. Benchmarks are difficult without competitive data, but large sole-source awards are common for unique defense systems.
Small Business Impact
This contract does not appear to involve small business participation, as it is a direct award to a large prime contractor for specialized engineering services.
Oversight & Accountability
Oversight would focus on the justification for the sole-source award and the contractor's performance against contract requirements to mitigate risks associated with non-competitive procurement.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition
- Potential for cost creep
- Long contract duration
- Sole-source justification required
Tags
engineering-services, department-of-defense, az, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $349.9 million to THE BOEING COMPANY. IGF::OT::IGF APACHE D UNIQUE, D COMMON PARTS WITH ADDITIONAL REQUIREMENT FOR E UNIQUE AND E COMMON PARTS TO SUPPORT THE AH-64D/E WEAPON
Who is the contractor on this award?
The obligated recipient is THE BOEING COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $349.9 million.
What is the period of performance?
Start: 2014-11-01. End: 2022-01-17.
What is the justification for awarding this contract sole-source?
The justification for a sole-source award typically centers on unique capabilities, proprietary technology, or urgent needs where only one contractor can fulfill the requirement. For complex systems like the Apache, this often relates to specific design knowledge, existing infrastructure, or critical parts availability held exclusively by the original manufacturer or a designated supplier.
What are the primary risks associated with this sole-source contract?
The primary risks include potential cost overruns due to the absence of competitive pressure, reduced innovation, and a lack of incentive for the contractor to improve efficiency. There's also a risk of vendor lock-in, making it difficult and costly to switch providers in the future, and potential quality issues if oversight is insufficient.
How does this contract contribute to the overall effectiveness of the AH-64D/E weapon system?
This contract is crucial for maintaining the operational effectiveness of the AH-64D/E Apache fleet by ensuring the availability of unique and common parts, along with necessary engineering support. This sustains the platform's readiness, lethality, and overall mission capability, directly impacting the warfighter's ability to execute assigned tasks.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
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: $349,902,459
Exercised Options: $349,891,900
Current Obligation: $349,891,900
Subaward Activity
Number of Subawards: 288
Total Subaward Amount: $39,010,957
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2014-11-01
Current End Date: 2022-01-17
Potential End Date: 2022-01-17 00:00:00
Last Modified: 2024-09-25
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