DoD Awards $397M for CH-47F Aircraft to Boeing, Raising Concerns Over Competition
Contract Overview
Contract Amount: $396,755,001 ($396.8M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2023-06-30
End Date: 2027-04-30
Contract Duration: 1,400 days
Daily Burn Rate: $283.4K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: CH-47F AIRCRAFT PROCUREMENT
Place of Performance
Location: RIDLEY PARK, DELAWARE County, PENNSYLVANIA, 19078
Plain-Language Summary
Department of Defense obligated $396.8 million to THE BOEING COMPANY for work described as: CH-47F AIRCRAFT PROCUREMENT Key points: 1. Significant contract value of $396.8 million awarded to a single vendor. 2. Sole-source award to Boeing for CH-47F aircraft limits competitive pricing. 3. Potential risk associated with lack of competition impacting taxpayer value. 4. Defense sector spending on aircraft manufacturing is substantial.
Value Assessment
Rating: questionable
The contract value of $396.8 million for CH-47F aircraft is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential market alternatives or previous similar procurements.
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 approach bypasses the competitive process, potentially leading to higher prices and reduced price discovery.
Taxpayer Impact: The lack of competition in this sole-source award raises concerns about whether taxpayers are receiving the best possible value for this significant defense expenditure.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. The sole-source nature of the award could stifle innovation from other potential suppliers. Dependence on a single supplier for critical aircraft components poses a long-term risk.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for overpayment
- Limited price discovery
Positive Signals
- Essential aircraft procurement
- Established vendor relationship
Sector Analysis
This contract falls within the Defense sector, specifically aircraft manufacturing. Spending in this area is critical for national security but requires careful oversight to ensure cost-effectiveness, especially in sole-source situations.
Small Business Impact
The data provided does not indicate any specific involvement or benefit for small businesses in this sole-source contract award to a large prime contractor.
Oversight & Accountability
The sole-source nature of this award warrants close scrutiny from oversight bodies to ensure the price is fair and reasonable and that the government's interests are protected.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award lacks competitive pricing.
- Potential for taxpayer overpayment.
- Limited transparency in price negotiation.
- Dependency on a single supplier.
Tags
aircraft-manufacturing, department-of-defense, pa, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $396.8 million to THE BOEING COMPANY. CH-47F AIRCRAFT PROCUREMENT
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 $396.8 million.
What is the period of performance?
Start: 2023-06-30. End: 2027-04-30.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair pricing?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Agencies must document these reasons thoroughly and conduct price analyses, such as cost realism and comparison to historical data or independent government estimates, to ensure fair and reasonable pricing despite the absence of competition.
What are the long-term risks associated with relying on a sole-source provider for critical aircraft components like the CH-47F?
Long-term risks include potential price escalation as the sole provider faces no competitive pressure. It can also lead to vendor lock-in, reduced innovation, and supply chain vulnerabilities if the sole provider experiences production issues or decides to discontinue the product line. This dependence can also limit future upgrade or modification options.
How does this sole-source procurement impact the overall effectiveness and cost-efficiency of the Department of Defense's aircraft modernization efforts?
Sole-source procurements can reduce overall effectiveness and cost-efficiency if they lead to inflated prices or prevent the adoption of potentially superior, more cost-effective technologies from other manufacturers. While ensuring the availability of specific platforms, it may divert funds that could be used for broader modernization or acquiring more units at a better price point through competition.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft 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: $793,510,002
Exercised Options: $793,510,002
Current Obligation: $396,755,001
Subaward Activity
Number of Subawards: 261
Total Subaward Amount: $191,172,904
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W58RGZ18D0082
IDV Type: IDC
Timeline
Start Date: 2023-06-30
Current End Date: 2027-04-30
Potential End Date: 2027-04-30 00:00:00
Last Modified: 2026-03-25
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