DoD Awards $394M Apache PBL Contract to Boeing for Airframe Component Services
Contract Overview
Contract Amount: $393,748,003 ($393.7M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2024-04-01
End Date: 2026-06-30
Contract Duration: 820 days
Daily Burn Rate: $480.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: APACHE PERFORMANCE BASED LOGISTICS (PBL) V SERVICES OF AIRFRAME COMPONENTS FOR THE UNITED STATES GOVERNMENT'S AH-64 APACHE FLEET.
Place of Performance
Location: MESA, MARICOPA County, ARIZONA, 85215
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $393.7 million to THE BOEING COMPANY for work described as: APACHE PERFORMANCE BASED LOGISTICS (PBL) V SERVICES OF AIRFRAME COMPONENTS FOR THE UNITED STATES GOVERNMENT'S AH-64 APACHE FLEET. Key points: 1. Boeing, the sole provider, secures a significant contract for critical Apache fleet sustainment. 2. The contract's firm-fixed-price structure aims to control costs for airframe component services. 3. Lack of competition raises concerns about potential overpricing and limited innovation. 4. This spending falls within the broader Defense sector's substantial aircraft manufacturing and maintenance expenditures.
Value Assessment
Rating: questionable
The contract value of $394 million for 820 days of service is substantial. Without competitive benchmarks, it's difficult to definitively assess value, but the lack of competition suggests potential for higher-than-market pricing.
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 price discovery and potentially leads to less favorable terms for the government compared to a competitive process.
Taxpayer Impact: The absence of competition means taxpayers may be paying a premium for these essential Apache fleet services, as there was no market pressure to drive down costs.
Public Impact
Ensures continued operational readiness of the U.S. Army's AH-64 Apache helicopter fleet. Supports critical maintenance and sustainment of vital airframe components. Potential for increased costs to taxpayers due to sole-source nature of the award.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for cost overruns
- Limited transparency in pricing
Positive Signals
- Ensures critical fleet readiness
- Performance-based logistics approach
- Firm fixed-price contract type
Sector Analysis
This contract falls under the Defense sector, specifically aircraft manufacturing and maintenance. Spending on sustainment and logistics for major weapon systems like the Apache is a significant portion of the DoD budget, often involving specialized providers.
Small Business Impact
The contract was awarded to The Boeing Company, a large prime contractor. There is no indication of subcontracting opportunities for small businesses within the provided data, suggesting limited direct small business participation.
Oversight & Accountability
The sole-source nature of this contract warrants close oversight to ensure fair pricing and prevent potential waste. The Department of the Army should actively monitor performance and costs against any available benchmarks.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award limits competition
- Potential for inflated pricing
- Lack of transparency in cost build-up
- Dependency on a single supplier
- Risk of performance issues if oversight is weak
Tags
aircraft-manufacturing, department-of-defense, az, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $393.7 million to THE BOEING COMPANY. APACHE PERFORMANCE BASED LOGISTICS (PBL) V SERVICES OF AIRFRAME COMPONENTS FOR THE UNITED STATES GOVERNMENT'S AH-64 APACHE FLEET.
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 $393.7 million.
What is the period of performance?
Start: 2024-04-01. End: 2026-06-30.
What is the historical cost performance for similar Apache component sustainment contracts, and how does this award compare?
Historical data on similar sole-source Apache component sustainment contracts is crucial for a robust value assessment. Without this, comparing the $394 million award to past expenditures or industry benchmarks is challenging. The government should leverage internal cost-estimating capabilities and historical pricing data to validate the reasonableness of Boeing's proposed prices.
What steps are being taken to mitigate the risks associated with a sole-source award and ensure fair pricing?
Given the sole-source nature, the Department of the Army should implement rigorous cost analysis and negotiation strategies. This includes detailed review of Boeing's cost proposals, benchmarking against independent cost estimates, and potentially negotiating specific performance metrics tied to cost efficiency to mitigate risks and ensure fair pricing.
How will the effectiveness of this Performance-Based Logistics (PBL) contract be measured to ensure optimal fleet readiness and cost efficiency?
Effectiveness will be measured through defined performance metrics within the PBL contract, focusing on availability rates, turnaround times for component repairs, and overall fleet readiness. Regular reviews and data analysis by the Army will track adherence to these metrics, ensuring both operational effectiveness and cost efficiency are achieved.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W58RGZ23R0004
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
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: $520,215,116
Exercised Options: $393,748,003
Current Obligation: $393,748,003
Actual Outlays: $57,632,673
Subaward Activity
Number of Subawards: 57
Total Subaward Amount: $35,872,995
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2024-04-01
Current End Date: 2026-06-30
Potential End Date: 2026-06-30 12:06:00
Last Modified: 2025-12-18
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