DoD Awards Boeing $148M for CH-47 Long Lead Items, Raising Oversight Concerns
Contract Overview
Contract Amount: $148,075,000 ($148.1M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2023-07-06
End Date: 2028-03-31
Contract Duration: 1,730 days
Daily Burn Rate: $85.6K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: CONGRESSIONAL MANDATE OF LONG LEAD ITEMS FOR CH-47 LOT 4
Place of Performance
Location: RIDLEY PARK, DELAWARE County, PENNSYLVANIA, 19078
Plain-Language Summary
Department of Defense obligated $148.1 million to THE BOEING COMPANY for work described as: CONGRESSIONAL MANDATE OF LONG LEAD ITEMS FOR CH-47 LOT 4 Key points: 1. Significant award to a single large contractor, Boeing. 2. Focus on long lead items suggests potential supply chain risks. 3. Lack of competition raises questions about price discovery. 4. Contract supports critical aviation sustainment for the Army.
Value Assessment
Rating: fair
The award value of $148M for long lead items is substantial. Without competitive benchmarking, it's difficult to definitively assess pricing fairness. The firm-fixed-price structure aims to control costs, but the lack of competition limits price discovery.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to The Boeing Company. This limits competitive pressure, potentially impacting price efficiency and innovation. The justification for sole-source is not provided.
Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for these long lead items, as market forces are not driving the price.
Public Impact
Ensures continued production of critical CH-47 helicopter components. Supports the U.S. Army's aviation readiness and modernization efforts. Potential for increased costs due to non-competitive award. Highlights reliance on a single prime contractor for key defense assets.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Long lead time items
Positive Signals
- Supports critical defense asset
- Firm fixed price contract
Sector Analysis
This contract falls within the Aircraft Engine and Engine Parts Manufacturing sector, a critical component of the defense industrial base. Spending in this sector is often characterized by high R&D costs, long production cycles, and significant government reliance.
Small Business Impact
This award does not appear to directly benefit small businesses, as it is a direct award to a large prime contractor, The Boeing Company. Subcontracting opportunities for small businesses are not detailed in this award notice.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and prevent potential cost overruns. Transparency regarding the justification for not competing the award is crucial for accountability.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award lacks competitive pressure.
- Potential for price inflation due to non-competition.
- Long lead items may indicate supply chain vulnerabilities.
- Limited transparency on justification for sole-sourcing.
- Reliance on a single large contractor.
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, pa, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $148.1 million to THE BOEING COMPANY. CONGRESSIONAL MANDATE OF LONG LEAD ITEMS FOR CH-47 LOT 4
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 $148.1 million.
What is the period of performance?
Start: 2023-07-06. End: 2028-03-31.
What is the specific justification for awarding these long lead items on a sole-source basis, and what steps are being taken to ensure fair pricing?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. For this contract, the specific rationale is not detailed. Oversight should focus on verifying the necessity of sole-sourcing and conducting robust price analysis to ensure the government is not overpaying, potentially through independent cost estimates or benchmarking against similar historical awards.
What are the potential risks associated with procuring long lead items through a non-competitive process, and how are these risks being mitigated?
Procuring long lead items non-competitively carries risks of inflated prices, reduced quality, and limited innovation. Mitigation strategies include rigorous price negotiation, detailed technical reviews, and exploring future competitive opportunities for subsequent contract phases. The government should also monitor Boeing's performance closely and ensure clear communication channels are maintained to address any emerging issues promptly.
How does this award contribute to the overall sustainment and modernization strategy for the CH-47 fleet, and what is the long-term outlook for competitive sourcing?
This award ensures the timely availability of critical components necessary for the continued operation and potential upgrades of the CH-47 fleet, a vital asset for the Army. The long-term outlook for competitive sourcing depends on market dynamics and the strategic decisions of the Department of Defense regarding future procurements and potential new entrants into the supply chain.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Engine and Engine Parts Manufacturing
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 100 S 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: $148,075,000
Exercised Options: $148,075,000
Current Obligation: $148,075,000
Subaward Activity
Number of Subawards: 69
Total Subaward Amount: $16,634,653
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W58RGZ21D0094
IDV Type: IDC
Timeline
Start Date: 2023-07-06
Current End Date: 2028-03-31
Potential End Date: 2028-03-31 12:03:00
Last Modified: 2025-09-26
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