Boeing awarded $17.26M for Apache helicopter logistics, but competition was limited
Contract Overview
Contract Amount: $17,260,371 ($17.3M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2017-10-01
End Date: 2023-09-30
Contract Duration: 2,190 days
Daily Burn Rate: $7.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: IGF::OT::IGF W58RGZ-17-C-0043 ISSUED FOR THE PROCUREMENT OF PERFORMANCE BASED LOGISTICS SERVICES TO SUPPORT THE INDONESIA FLEET OF 8 APACHE AH-64E AIRCRAFT, CONTRACTOR FIELD SERVICE REPRESENTATIVE, AND LOGISTICS SUPPORT REPRESENTATIVE.
Place of Performance
Location: MESA, MARICOPA County, ARIZONA, 85215
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $17.3 million to THE BOEING COMPANY for work described as: IGF::OT::IGF W58RGZ-17-C-0043 ISSUED FOR THE PROCUREMENT OF PERFORMANCE BASED LOGISTICS SERVICES TO SUPPORT THE INDONESIA FLEET OF 8 APACHE AH-64E AIRCRAFT, CONTRACTOR FIELD SERVICE REPRESENTATIVE, AND LOGISTICS SUPPORT REPRESENTATIVE. Key points: 1. Contract value represents a significant investment in maintaining critical aviation assets. 2. Sole-source award raises questions about potential overpayment and lack of competitive pressure. 3. Long contract duration (6 years) suggests a need for sustained support, but also locks in pricing. 4. Performance-based logistics aims to ensure readiness and efficiency for the aircraft fleet. 5. Focus on contractor field representatives highlights the specialized nature of the support required. 6. Geographic location in Arizona suggests a key operational or training hub.
Value Assessment
Rating: questionable
The contract value of $17.26 million for performance-based logistics for 8 Apache AH-64E aircraft appears substantial. Without comparable sole-source contracts for similar specialized aviation support, it is difficult to definitively benchmark the value. However, the lack of competition inherently limits the ability to assess if the pricing reflects market rates or if a more competitive process could have yielded better value for the government.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, The Boeing Company, was solicited. This significantly limits price discovery and suggests that the government may not have explored all available options for obtaining these services. The absence of multiple bidders means there was no competitive pressure to drive down costs or improve service offerings.
Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive bidding to ensure the best possible price. This lack of competition means taxpayers may be paying a premium for these essential logistics services.
Public Impact
The primary beneficiaries are the U.S. Army units operating the Apache AH-64E fleet, ensuring aircraft readiness. Services include performance-based logistics, contractor field service representatives, and logistics support representatives. The contract supports the operational readiness of 8 Apache AH-64E aircraft. The contract's impact on the workforce is likely concentrated within specialized technical and logistics roles at the contractor's facility in Arizona.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing and potential cost savings for taxpayers.
- Long-term contract duration may not adapt to evolving technological needs or market shifts.
- Reliance on a single contractor for critical logistics could pose a risk if performance falters.
Positive Signals
- Performance-based logistics structure incentivizes contractor to meet specific readiness and performance metrics.
- Boeing's established expertise with the Apache platform suggests a high likelihood of competent service delivery.
- Contracting for specialized support ensures the availability of critical skills not readily found within the government.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on aviation support services. The market for specialized logistics and maintenance for advanced military aircraft is often dominated by original equipment manufacturers or highly specialized defense contractors due to proprietary knowledge and technical requirements. Benchmarking this contract's value is challenging without direct comparisons to similar sole-source agreements for comparable aircraft types and support levels.
Small Business Impact
This contract does not appear to involve a small business set-aside. As a sole-source award to a large prime contractor, there is a potential for subcontracting opportunities for small businesses. However, the extent to which small businesses will be involved depends on Boeing's subcontracting plan and the specific components or services required.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Transparency is limited due to the sole-source nature. Accountability is primarily driven by the performance-based metrics outlined in the contract. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Apache AH-64E Aircraft Procurement
- Aviation Maintenance Services
- Defense Logistics Agency Support Contracts
- Foreign Military Sales (if applicable to Indonesia)
Risk Flags
- Sole-source award
- Lack of competitive bidding
- Potential for cost overruns due to lack of competition
Tags
defense, department-of-defense, department-of-the-army, apache-ah-64e, aviation-logistics, performance-based-logistics, sole-source, definitive-contract, firm-fixed-price, arizona, engineering-services
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $17.3 million to THE BOEING COMPANY. IGF::OT::IGF W58RGZ-17-C-0043 ISSUED FOR THE PROCUREMENT OF PERFORMANCE BASED LOGISTICS SERVICES TO SUPPORT THE INDONESIA FLEET OF 8 APACHE AH-64E AIRCRAFT, CONTRACTOR FIELD SERVICE REPRESENTATIVE, AND LOGISTICS SUPPORT REPRESENTATIVE.
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 $17.3 million.
What is the period of performance?
Start: 2017-10-01. End: 2023-09-30.
What is Boeing's track record with performance-based logistics for military aircraft?
The Boeing Company has a long history of providing logistics and support services for various military aircraft platforms, including the Apache. Their experience often involves performance-based contracts where payment is tied to achieving specific readiness rates, maintenance turn-around times, and overall fleet availability. While specific details of past performance-based logistics contracts can be proprietary, Boeing generally possesses the technical expertise and infrastructure to manage complex support requirements for platforms like the AH-64E. However, the effectiveness and value derived from such contracts can vary depending on the specific terms, oversight, and the operational environment.
How does the $17.26 million value compare to similar aviation logistics contracts?
Directly comparing the $17.26 million value of this sole-source contract for 8 Apache AH-64E aircraft is challenging without access to detailed, comparable contract data. Sole-source awards inherently lack the price discovery mechanism of competitive bidding, making external benchmarking difficult. Factors influencing cost include the specific scope of performance-based logistics, the level of contractor field service representative support, the duration of the contract (6 years), and the specific maintenance requirements for the AH-64E. Generally, specialized aviation support for advanced military platforms can be costly, but the absence of competition means the government cannot be certain if this represents a fair market price.
What are the primary risks associated with a sole-source award for critical aviation support?
The primary risks associated with a sole-source award for critical aviation support include: 1. **Higher Costs:** Without competition, the contractor may charge a premium, leading to increased expenditure for taxpayers. 2. **Reduced Innovation:** Lack of competitive pressure can disincentivize the contractor from seeking innovative or more cost-effective solutions. 3. **Dependency:** The government becomes reliant on a single provider, potentially creating vulnerabilities if the contractor experiences financial difficulties, performance issues, or decides to exit the market. 4. **Limited Oversight Effectiveness:** While oversight mechanisms exist, the absence of competing proposals means there's no baseline against which to measure performance or cost-effectiveness rigorously.
How effective is performance-based logistics in ensuring aircraft readiness for the Apache fleet?
Performance-based logistics (PBL) is designed to improve aircraft readiness and reduce total ownership costs by shifting the focus from transactional parts sales to achieving desired outcomes. For the Apache fleet, a PBL contract aims to ensure a specified percentage of aircraft are mission-capable, reduce maintenance downtime, and optimize supply chain efficiency. When structured and managed effectively, PBL can lead to higher readiness rates and more predictable costs compared to traditional cost-plus contracts. However, the success of PBL is highly dependent on clear performance metrics, robust government oversight, and the contractor's capability and commitment to meeting those metrics.
What is the historical spending pattern for Apache AH-64E logistics support?
Historical spending on Apache AH-64E logistics support has been substantial, reflecting the complexity and operational tempo of this advanced attack helicopter. The U.S. Army has consistently invested significant funds in maintaining the readiness of its Apache fleet through various contract vehicles, including sustainment, maintenance, repair, and overhaul services. Spending patterns often fluctuate based on operational deployments, modernization programs, and the age of the fleet. While specific historical dollar amounts for this particular contract's predecessors are not provided, it is understood that comprehensive support for such a critical platform requires continuous and significant financial commitment over its lifecycle.
What are the implications of this contract being awarded in Arizona?
The contract being managed or executed in Arizona suggests a connection to a significant Army aviation installation or training center located there, such as the 11th Aviation Regiment at Fort Huachuca or potentially operations related to the National Guard or Reserve components based in the state. This geographic focus implies that the logistics support is directly tied to units or operations within or managed from Arizona. It may also indicate the presence of specialized maintenance facilities or contractor personnel stationed in the region to support the fleet based there or operating from there.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
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: $40,204,278
Exercised Options: $17,260,371
Current Obligation: $17,260,371
Subaward Activity
Number of Subawards: 14
Total Subaward Amount: $1,441,821
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2017-10-01
Current End Date: 2023-09-30
Potential End Date: 2023-09-30 12:09:00
Last Modified: 2025-12-18
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