DoD Awards Boeing $30M for Oil-Cooled Generators, Lacking Competition

Contract Overview

Contract Amount: $30,032,391 ($30.0M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2023-09-28

End Date: 2032-03-30

Contract Duration: 3,106 days

Daily Burn Rate: $9.7K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: UCA TASK ORDER FOR OIL COOLED GENERATORS

Place of Performance

Location: MESA, MARICOPA County, ARIZONA, 85215

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $30.0 million to THE BOEING COMPANY for work described as: UCA TASK ORDER FOR OIL COOLED GENERATORS Key points: 1. Significant award to a single large contractor, Boeing. 2. No competition was identified for this engineering services contract. 3. Potential risk associated with sole-source procurement and long duration. 4. The sector is Defense, specifically engineering services for generators.

Value Assessment

Rating: questionable

The contract value of $30M over 10 years is substantial. Without competitive bidding, it's difficult to assess if this price represents fair value compared to market rates for similar generator systems and 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 may lead to higher costs for taxpayers as there was no market pressure to offer the best price.

Taxpayer Impact: The lack of competition for a $30M contract raises concerns about potential overspending and inefficient use of taxpayer funds.

Public Impact

Taxpayers may be paying a premium due to the absence of competitive bidding. The long contract duration (over 10 years) could lock in potentially suboptimal pricing. Reliance on a single contractor for critical infrastructure components warrants scrutiny.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source procurement
Long contract duration
Lack of transparency in pricing

Positive Signals

Award to a known, large defense contractor

Sector Analysis

This contract falls under Engineering Services (NAICS 541330) within the Defense sector. Spending in this area is critical for military readiness, but competitive bidding is standard practice to ensure value.

Small Business Impact

The awardee, The Boeing Company, is a large business. There is no indication that small businesses were involved in this specific procurement, either as prime contractors or subcontractors.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure the government is receiving fair value and that the justification for not competing is robust and documented.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award
Lack of competition
Long contract duration
Potential for inflated pricing
Limited market research evident

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.0 million to THE BOEING COMPANY. UCA TASK ORDER FOR OIL COOLED GENERATORS

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 $30.0 million.

What is the period of performance?

Start: 2023-09-28. End: 2032-03-30.

What is the justification for awarding this $30M contract on a sole-source basis?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of available sources. Without further details, it's impossible to determine if this specific procurement meets those criteria. A thorough review of the contract file and justification documentation is necessary to assess the validity of the sole-source determination and its impact on pricing.

What are the risks associated with a 10-year sole-source contract for critical equipment?

A long-term sole-source contract for critical equipment like generators presents several risks. It can lead to complacency from the contractor, potentially resulting in reduced quality or service. Furthermore, the government is locked into a single supplier, unable to benefit from potential price reductions or technological advancements from competitors over the contract's life. This also limits opportunities for other capable firms to compete for the business.

How does the lack of competition impact the overall value for taxpayer money?

The absence of competition significantly undermines the potential for achieving the best value for taxpayer money. Competitive bidding forces contractors to offer their most competitive prices and innovative solutions to win the contract. When a contract is sole-sourced, the government lacks this leverage, increasing the likelihood of paying a higher price than would be achieved in a competitive environment. This can result in inefficient allocation of public funds.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 5000 E MCDOWELL RD, 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: $154,271,334

Exercised Options: $30,032,391

Current Obligation: $30,032,391

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W58RGZ21D0077

IDV Type: IDC

Timeline