USAF awards $1.6B to Boeing for 10+ Unmanned Combat Aircraft, raising concerns over sole-source procurement
Contract Overview
Contract Amount: $1,615,878,425 ($1.6B)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2006-12-18
End Date: 2009-08-30
Contract Duration: 986 days
Daily Burn Rate: $1.6M/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: +10 USAF UCA
Place of Performance
Location: LONG BEACH, LOS ANGELES County, CALIFORNIA, 90807
Plain-Language Summary
Department of Defense obligated $1.62 billion to THE BOEING COMPANY for work described as: +10 USAF UCA Key points: 1. Significant contract value of $1.6 billion for advanced aircraft. 2. Sole-source award to Boeing limits competitive pricing and innovation. 3. Long contract duration (986 days) may indicate complex development or production. 4. Focus on unmanned combat aircraft highlights evolving defense technology needs.
Value Assessment
Rating: questionable
Benchmarking the value of this specific contract is difficult without detailed specifications and comparable sole-source awards. However, the substantial value suggests a high degree of complexity and specialized technology, which often commands premium pricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This method bypasses competitive bidding, potentially leading to higher prices and reduced pressure on the contractor to optimize costs or innovate.
Taxpayer Impact: The lack of competition means taxpayers may not be receiving the best possible price for these advanced aircraft, as there was no market pressure to drive down costs.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. The acquisition of advanced unmanned combat aircraft raises questions about strategic military priorities and potential escalation. Reliance on a single supplier for critical defense technology could pose long-term supply chain risks.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source procurement
- Lack of competition
- High contract value
- Long contract duration
Positive Signals
- Award to established defense contractor
- Firm Fixed Price contract type
Sector Analysis
The defense sector, particularly aircraft manufacturing, often involves complex, high-value contracts. Spending benchmarks for unmanned combat aircraft are difficult to establish due to the specialized and evolving nature of the technology and the prevalence of sole-source awards.
Small Business Impact
This contract was awarded to a large prime contractor, The Boeing Company. There is no indication of subcontracting opportunities for small businesses within the provided data, suggesting limited direct impact on the small business sector for this specific award.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and adherence to contract terms. Robust accountability mechanisms are needed to justify the lack of competition and validate the expenditure.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award
- Lack of competitive bidding
- High contract value
- Potential for cost overruns
- Limited transparency in pricing
Tags
aircraft-manufacturing, department-of-defense, ca, delivery-order, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.62 billion to THE BOEING COMPANY. +10 USAF UCA
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 $1.62 billion.
What is the period of performance?
Start: 2006-12-18. End: 2009-08-30.
What specific factors justified the sole-source procurement of these 10+ USAF Unmanned Combat Aircraft from Boeing, and how was the price determined without competition?
Sole-source justifications typically cite unique capabilities, proprietary technology, or urgent needs that only a specific contractor can meet. The price is often determined through negotiation, historical pricing, or cost-plus-incentive-fee structures, though without competition, validating its fairness is challenging and requires rigorous cost analysis by the agency.
What are the primary risks associated with awarding a contract of this magnitude ($1.6B) on a sole-source basis for advanced unmanned combat aircraft?
The primary risks include potential overpayment due to the absence of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and the strategic risk of relying on a single supplier for critical defense assets. This can also set a precedent for future sole-source awards, limiting broader market engagement.
How does the acquisition of these unmanned combat aircraft align with current USAF strategic objectives, and what is the expected effectiveness of this platform?
The acquisition likely aligns with the USAF's modernization efforts and the increasing emphasis on autonomous and unmanned systems for intelligence, surveillance, reconnaissance, and strike missions. The expected effectiveness hinges on the platform's technological capabilities, reliability, integration into existing air operations, and its ability to achieve mission objectives in contested environments.
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: 2401 E WARDLOW RD, LONG BEACH, CA, 90807
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $1,618,940,496
Exercised Options: $1,618,932,110
Current Obligation: $1,615,878,425
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA861406D2006
IDV Type: IDC
Timeline
Start Date: 2006-12-18
Current End Date: 2009-08-30
Potential End Date: 2009-08-30 00:00:00
Last Modified: 2018-10-17
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