Boeing awarded $26.5M task order for engineering services to support Korea FMS PPSS IDIQ
Contract Overview
Contract Amount: $26,540,480 ($26.5M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2023-10-30
End Date: 2027-07-31
Contract Duration: 1,370 days
Daily Burn Rate: $19.4K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: AWARD OF KOREA TASK ORDER UNDER FMS PPSS IDIQ.
Place of Performance
Location: MESA, MARICOPA County, ARIZONA, 85212
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $26.5 million to THE BOEING COMPANY for work described as: AWARD OF KOREA TASK ORDER UNDER FMS PPSS IDIQ. Key points: 1. Contract awarded to a single, established provider, raising questions about competitive pricing. 2. The fixed-price contract type offers some cost certainty, but the lack of competition limits upside for taxpayers. 3. Performance period extends over three years, indicating a significant, long-term need for these services. 4. The contract is for engineering services, a critical component for defense systems modernization. 5. Awarded under an existing IDIQ, suggesting a pre-vetted contractor and streamlined process. 6. No small business set-aside, indicating potential missed opportunities for smaller firms in this segment.
Value Assessment
Rating: fair
The award amount of $26.5 million for engineering services appears substantial. Without a competitive bidding process, it is difficult to benchmark the value for money. The fixed-price nature of the contract provides some cost control, but the absence of multiple bids means potential savings from competition were not realized. Further analysis would require comparing the scope of services and deliverables to similar engineering contracts awarded by the Department of Defense or other agencies.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded under a sole-source basis, meaning it was not competed. The data indicates it was a 'NOT AVAILABLE FOR COMPETITION' award. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. While sole-source awards can be justified for specific reasons, such as unique capabilities or urgent needs, they generally lead to less price discovery and potentially higher costs for the government.
Taxpayer Impact: The lack of competition means taxpayers may not have received the best possible price for these engineering services. Without competing bids, there is less pressure on the contractor to offer the most cost-effective solution.
Public Impact
The primary beneficiary is the Department of the Army, receiving critical engineering support. Services delivered will likely involve technical expertise for defense systems related to Foreign Military Sales (FMS) in Korea. The geographic impact is primarily focused on supporting operations and systems related to Korea. The contract supports specialized engineering roles, potentially impacting a skilled technical workforce.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may lead to inflated pricing.
- Sole-source award limits transparency and potential for cost savings.
- Long performance period could lock in potentially suboptimal pricing if market conditions change.
Positive Signals
- Awarded under an existing IDIQ, suggesting contractor pre-qualification.
- Fixed-price contract type provides some cost predictability.
- Engineering services are crucial for maintaining and modernizing defense capabilities.
Sector Analysis
This contract falls within the Engineering Services sector, specifically supporting defense-related activities. The market for defense engineering services is substantial, driven by the need for advanced technological solutions and system sustainment. Comparable spending benchmarks would involve analyzing other large engineering contracts awarded by the Department of Defense for similar support functions, particularly those related to international programs or specific weapon systems.
Small Business Impact
The contract data indicates that this award was not set aside for small businesses (ss: false, sb: false). This suggests that the primary contractor, The Boeing Company, is a large business. Consequently, there are no direct subcontracting implications for small businesses stemming from a small business set-aside requirement. However, it is possible that Boeing may engage small businesses as subcontractors, but this is not mandated by the contract terms.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the fixed-price contract structure, requiring delivery of specified services. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Foreign Military Sales (FMS) Programs
- Program, Project, and Portfolio Management Services (PPSS)
- Indefinite Delivery/Indefinite Quantity (IDIQ) Contracts
- Defense Engineering Services Contracts
Risk Flags
- Sole-source award
- Lack of competition
- Potential for cost overruns without competitive pressure
Tags
defense, department-of-defense, department-of-the-army, engineering-services, firm-fixed-price, sole-source, foreign-military-sales, korea, large-business, aerospace-and-defense, task-order
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $26.5 million to THE BOEING COMPANY. AWARD OF KOREA TASK ORDER UNDER FMS PPSS IDIQ.
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 $26.5 million.
What is the period of performance?
Start: 2023-10-30. End: 2027-07-31.
What is the historical spending pattern for engineering services related to Korea FMS PPSS IDIQ with The Boeing Company?
Analyzing historical spending for this specific task order requires access to detailed contract databases and award histories. However, given that this is a task order under an existing IDIQ, it implies that The Boeing Company was previously vetted and potentially awarded other task orders under the same IDIQ. To understand the historical spending pattern, one would need to examine all awarded task orders under the PPSS IDIQ, filter for those awarded to Boeing and related to Korea, and sum their values over time. Without this specific data, it's challenging to provide precise historical figures. Generally, large defense contractors like Boeing have long-standing relationships with the DoD, and spending can be substantial and consistent for critical support services over many years, often in the tens or hundreds of millions of dollars annually for major programs.
How does the awarded amount compare to similar engineering services contracts for international defense support?
Comparing this $26.5 million award requires identifying comparable contracts. Key factors for comparison include the scope of engineering services (e.g., design, testing, sustainment), the specific defense systems involved, the geographic region of support, and the contract type (e.g., fixed-price, cost-plus). Contracts for similar international defense support, especially those involving major platforms or complex systems, can range from tens of millions to billions of dollars over their lifecycle. A $26.5 million task order for a defined period (approx. 3 years) suggests a significant but not exceptionally large engagement. However, without detailed service descriptions and market rates for specialized engineering expertise, a precise value-for-money assessment relative to peers is difficult. The sole-source nature further complicates direct benchmarking.
What are the primary risks associated with a sole-source award for engineering services?
The primary risks associated with a sole-source award for engineering services include: 1. **Higher Costs:** Without competition, the government may pay a premium as the contractor faces less pressure to offer the most competitive price. 2. **Reduced Innovation:** A lack of competitive pressure can disincentivize the contractor from exploring more innovative or cost-effective solutions. 3. **Limited Oversight Effectiveness:** While oversight mechanisms exist, the absence of competing proposals means there's no benchmark against which to measure the contractor's performance or pricing. 4. **Potential for Scope Creep:** In sole-source situations, there can be a greater risk of scope creep if not managed diligently, leading to increased costs. 5. **Dependency:** The government becomes reliant on a single provider, which can be problematic if that provider experiences performance issues or financial instability.
What is The Boeing Company's track record in providing engineering services under FMS programs?
The Boeing Company has an extensive and long-standing track record in providing a wide array of defense systems, platforms, and associated services, including engineering support, under Foreign Military Sales (FMS) programs. Boeing is a major global aerospace and defense contractor, consistently ranked among the top suppliers to the U.S. Department of Defense and numerous international partners. Their experience spans decades and includes complex aircraft, rotorcraft, satellite, and missile defense systems. For FMS, Boeing typically provides lifecycle support, including engineering services for sustainment, upgrades, training, and integration of systems sold to allied nations. Their track record generally indicates a high level of technical capability and program execution, though like any large contractor, specific program performance can vary.
How does the duration of this contract (3 years) impact the overall value proposition?
The contract duration of approximately three years (from Oct 2023 to Jul 2027) provides a stable period for the delivery of essential engineering services. For the government, this duration allows for consistent support without the administrative overhead of frequent re-competition. It enables the contractor, The Boeing Company, to plan resources and personnel effectively. From a value perspective, a longer duration can sometimes lead to better unit pricing if negotiated upfront, especially under fixed-price agreements, as the contractor can amortize setup costs over a longer period. However, it also carries the risk of locking the government into potentially non-competitive pricing if market rates decrease or if the scope of work evolves significantly and isn't renegotiated.
What specific engineering disciplines are likely covered under this task order?
Given the context of defense systems and FMS programs, the engineering disciplines covered under this task order are likely to be broad and specialized. This could include systems engineering, aerospace engineering, mechanical engineering, electrical engineering, software engineering, and potentially specialized fields such as avionics, radar systems, communications, cybersecurity, and materials science. The specific focus would depend on the defense platforms or systems being supported in Korea. Engineering services often encompass design, analysis, integration, testing, validation, verification, sustainment engineering, and technical documentation, all crucial for maintaining the operational readiness and effectiveness of complex military equipment.
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 AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
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: $26,540,480
Exercised Options: $26,540,480
Current Obligation: $26,540,480
Subaward Activity
Number of Subawards: 8
Total Subaward Amount: $1,447,139
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W58RGZ20D0005
IDV Type: IDC
Timeline
Start Date: 2023-10-30
Current End Date: 2027-07-31
Potential End Date: 2027-07-31 12:07:00
Last Modified: 2025-07-31
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