Boeing awarded $38.5M for aircraft parts, with limited competition and a 3-year duration
Contract Overview
Contract Amount: $38,484,274 ($38.5M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2018-05-11
End Date: 2021-10-31
Contract Duration: 1,269 days
Daily Burn Rate: $30.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: BLADES
Place of Performance
Location: MESA, MARICOPA County, ARIZONA, 85215
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $38.5 million to THE BOEING COMPANY for work described as: BLADES Key points: 1. The contract value of $38.5 million represents a significant investment in aircraft parts. 2. Limited competition for this contract may impact overall cost-effectiveness. 3. The duration of 1269 days suggests a long-term need for these specific parts. 4. The fixed-price contract type aims to control costs, but the absence of robust competition raises questions. 5. The Defense Logistics Agency's reliance on Boeing for these parts indicates a specialized supplier relationship. 6. The contract's focus on 'Other Aircraft Parts' suggests a broad category of essential components.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging without specific part details. However, the $38.5 million award over three years suggests a substantial per-year expenditure. Given the limited competition, it's difficult to definitively assess if this represents optimal value for money. Comparisons to similar sole-source or limited-competition awards for specialized aircraft components would be necessary for a more precise valuation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
This contract was not fully competed, indicating a limited procurement approach. The specific reasons for limited competition, such as proprietary technology or existing infrastructure, are not detailed. The absence of broad market engagement means fewer vendors had the opportunity to bid, potentially leading to less aggressive pricing than under a full and open competition.
Taxpayer Impact: Taxpayers may have paid a premium due to the restricted number of bidders. Without a competitive bidding process, the government has less leverage to negotiate the lowest possible price.
Public Impact
The Department of Defense benefits from the continued supply of essential aircraft parts, ensuring operational readiness. The services delivered are the manufacturing and supply of 'Other Aircraft Parts,' crucial for maintaining various aircraft fleets. The geographic impact is primarily within Arizona, where the contractor is located, but the ultimate beneficiaries are military personnel nationwide. Workforce implications include continued employment at The Boeing Company and its suppliers, particularly in specialized manufacturing roles.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for higher costs due to limited competition.
- Lack of transparency regarding the specific justification for limited competition.
- Dependence on a single contractor for critical aircraft components.
Positive Signals
- The Boeing Company is a well-established aerospace manufacturer with a proven track record.
- The firm fixed-price contract type provides cost certainty for the government.
- The contract duration indicates a stable, long-term supply chain for these parts.
Sector Analysis
The aerospace and defense sector is characterized by high barriers to entry, complex supply chains, and significant government investment. This contract falls within the 'Other Aircraft Parts' manufacturing sub-sector, which is critical for maintaining the operational readiness of military aviation assets. Spending in this area is substantial, driven by the need for specialized components that often require unique manufacturing capabilities and certifications. Comparable spending benchmarks would typically involve analyzing other contracts for similar aircraft parts awarded under various competition levels.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit mention of subcontracting goals for small businesses. This suggests that the primary awardee, The Boeing Company, will likely fulfill the contract requirements directly or through its larger supply chain partners, potentially limiting direct opportunities for small businesses on this specific award.
Oversight & Accountability
Oversight for this contract would typically fall under the purview of the Defense Contract Management Agency (DCMA) and the Department of Defense's Inspector General. Accountability measures are inherent in the contract terms, including delivery schedules and quality specifications. Transparency is facilitated through contract databases like FPDS, though detailed justifications for limited competition may not always be publicly accessible.
Related Government Programs
- Aircraft Parts Manufacturing
- Defense Logistics Agency Contracts
- Boeing Defense Contracts
- Fixed-Price Contracts
- Other Aircraft Parts
Risk Flags
- Limited Competition
- Potential for Cost Overruns
- Supply Chain Risk
Tags
defense, department-of-defense, defense-logistics-agency, the-boeing-company, aircraft-parts, limited-competition, firm-fixed-price, arizona, delivery-order, non-small-business, other-aircraft-parts-and-auxiliary-equipment-manufacturing
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $38.5 million to THE BOEING COMPANY. BLADES
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 Logistics Agency).
What is the total obligated amount?
The obligated amount is $38.5 million.
What is the period of performance?
Start: 2018-05-11. End: 2021-10-31.
What is The Boeing Company's track record with the Department of Defense for similar aircraft parts contracts?
The Boeing Company has a long and extensive history of contracting with the Department of Defense, supplying a wide array of aircraft, components, and related services. For 'Other Aircraft Parts,' Boeing's track record is generally strong, given its position as a major aerospace manufacturer. However, specific performance metrics for this particular contract, such as on-time delivery rates, quality compliance, and any past disputes or contract modifications, would require a deeper dive into historical contract data and performance reports. Generally, large defense contractors like Boeing are expected to meet stringent performance standards, and deviations can lead to penalties or future limitations on bidding.
How does the $38.5 million value compare to similar limited-competition contracts for aircraft parts?
Comparing the $38.5 million value requires context on the specific types of 'Other Aircraft Parts' being procured and the duration of the contract (1269 days). If these parts are highly specialized, proprietary, or critical for specific platforms where Boeing is the sole or primary manufacturer, the price might be within a reasonable range for limited competition. However, without detailed specifications, it's difficult to benchmark. Generally, limited competition tends to result in higher prices than full and open competition. A thorough analysis would involve identifying comparable contracts for similar part categories awarded under limited or sole-source conditions to establish a more accurate value-for-money assessment.
What are the primary risks associated with this limited-competition contract?
The primary risks associated with this limited-competition contract include potential cost overruns or inflated pricing due to the lack of robust market competition. There's also a risk of reduced innovation if alternative solutions are not explored. Furthermore, a heavy reliance on a single contractor for critical components can create supply chain vulnerabilities. If Boeing faces production issues or financial difficulties, it could significantly disrupt the supply of these essential parts. The government's leverage in negotiating terms and future modifications is also diminished in a limited-competition scenario.
How effective is the firm fixed-price contract type in managing costs for this specific award?
The firm fixed-price (FFP) contract type is designed to provide cost certainty to the government by shifting the risk of cost overruns to the contractor. For this $38.5 million award, FFP means The Boeing Company is obligated to deliver the specified aircraft parts at the agreed-upon price, regardless of its actual costs. This is generally effective in controlling the government's expenditure, assuming the initial price was negotiated reasonably. However, the effectiveness is somewhat undermined by the limited competition, as the initial price might have been higher than it would have been in a more competitive environment. The contractor still bears the risk of cost increases, incentivizing efficient production.
What are the historical spending patterns for 'Other Aircraft Parts' by the Defense Logistics Agency?
Historical spending patterns for 'Other Aircraft Parts' by the Defense Logistics Agency (DLA) are typically substantial, reflecting the continuous need to maintain a vast and diverse fleet of military aircraft. The DLA manages a complex global supply chain, procuring millions of items annually. Spending on aircraft parts, in general, is a significant portion of the DLA's budget. Analyzing historical data would likely show consistent, high-volume procurement of various components, with fluctuations driven by fleet modernization programs, operational tempo, and geopolitical events. Contracts for 'Other Aircraft Parts' often involve numerous vendors and varying competition levels, depending on the specificity and availability of the parts.
What is the significance of the contract being awarded to The Boeing Company in Arizona?
The significance of this contract being awarded to The Boeing Company in Arizona relates to the company's established manufacturing presence and capabilities in the state. Arizona hosts significant aerospace and defense industry infrastructure, and Boeing's operations there contribute to the regional economy through job creation and technological development. For the DLA, awarding the contract to a contractor with a strong regional footprint can sometimes streamline logistics and oversight, although the ultimate delivery of parts may be to various military installations globally. It also highlights the concentration of defense manufacturing capabilities within specific geographic areas.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 6200 JS MCDONNELL BLVD, SAINT LOUIS, MO, 63134
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: $38,484,274
Exercised Options: $38,484,274
Current Obligation: $38,484,274
Subaward Activity
Number of Subawards: 17
Total Subaward Amount: $2,797,286
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Parent Contract
Parent Award PIID: SPE4A114G0007
IDV Type: BOA
Timeline
Start Date: 2018-05-11
Current End Date: 2021-10-31
Potential End Date: 2021-10-31 12:10:00
Last Modified: 2019-07-11
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