Army awards $205.7M contract for Apache helicopter airframes and spares to McDonnell Douglas Helicopter Company

Contract Overview

Contract Amount: $205,675,129 ($205.7M)

Contractor: Mcdonnell Douglas Helicopter Company

Awarding Agency: Department of Defense

Start Date: 2000-06-02

End Date: 2009-10-31

Contract Duration: 3,438 days

Daily Burn Rate: $59.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200009!2100!001176!AH23 !USA AVIATION AND MISSILE COMMAND!DAAH2300C0124 !A!*!* !20000602!20051230!047800297!006265946!009256819!N!8V613!MCDONNELL DOUGLAS HELICOPTER C!5000 E. MCDOWELL ROAD !MESA !AZ!85215!46000!013!04!MESA !MARICOPA !ARIZONA !0001!+000002320499!Y!N!000000000000!1520!AIRCRAFT ROTARY WING !A1A!AIRFRAMES AND SPARES !1AIC!APACHE (AH-64) ADV ATTACK !3728!3!*!*!*!B!N!Z!B !N!J!1!001!N!4A!Z!N!D!* !* !N!C!*!A!A!A!A!A!A!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: MESA, MARICOPA County, ARIZONA, 85215

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $205.7 million to MCDONNELL DOUGLAS HELICOPTER COMPANY for work described as: 200009!2100!001176!AH23 !USA AVIATION AND MISSILE COMMAND!DAAH2300C0124 !A!*!* !20000602!20051230!047800297!006265946!009256819!N!8V613!MCDONNELL DOUGLAS HELICOPTER C!5000 E. MCDOWELL ROAD !MESA !AZ!85215!46000!013!04!MESA !MAR… Key points: 1. Contract awarded for critical components of the AH-64 Apache attack helicopter. 2. Long-term contract spanning over 9 years, indicating sustained demand for Apache support. 3. Sole-source award raises questions about competition and potential cost efficiencies. 4. Significant portion of the contract value allocated to airframes and spares. 5. Geographic concentration of the contractor in Mesa, Arizona.

Value Assessment

Rating: fair

The contract value of $205.7 million over nine years suggests a substantial investment in the Apache helicopter fleet. While specific performance metrics are not detailed, the duration implies a consistent need for these components. Benchmarking this against similar sole-source contracts for major aircraft components would be necessary for a more precise value assessment. The absence of competition inherently limits the ability to ascertain optimal pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source, meaning it was not competed. This typically occurs when a single contractor possesses unique capabilities or intellectual property essential for the product. The lack of competition means that pricing and terms were negotiated directly with McDonnell Douglas Helicopter Company, potentially leading to higher costs than if multiple bidders had vied for the contract.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without alternative offers, there is less pressure on the contractor to offer the lowest possible price.

Public Impact

The primary beneficiaries are the U.S. Army aviation units operating the AH-64 Apache attack helicopter, ensuring continued operational readiness. The contract delivers essential airframes and spare parts, crucial for maintaining the fleet's airworthiness and combat capability. The contract's impact is primarily concentrated within the defense industrial base, supporting specialized manufacturing and supply chains. Workforce implications are likely within McDonnell Douglas Helicopter Company's facilities in Mesa, Arizona, supporting skilled manufacturing jobs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Long contract duration without clear performance incentives could reduce contractor urgency for cost savings.
Lack of transparency in the sole-source justification requires careful review to ensure necessity.

Positive Signals

Ensures continued availability of critical components for a key military asset (AH-64 Apache).
Supports a long-standing relationship with a known supplier for specialized helicopter parts.
Contract duration provides stability for the contractor and the supply chain.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on rotary-wing aircraft components. The AH-64 Apache is a cornerstone of U.S. Army attack aviation. Spending on such specialized components is typical for maintaining advanced military platforms, with significant government investment directed towards ensuring the operational readiness of these high-value assets. Comparable spending would involve other major airframe or critical system procurements for military aircraft.

Small Business Impact

Information regarding small business subcontracting goals or achievements is not explicitly detailed in the provided data. As a sole-source award to a large prime contractor, the direct impact on small business set-asides is minimal. However, the prime contractor may engage small businesses in its supply chain for component manufacturing or specialized services, but this is not specified.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. The Defense Contract Management Agency (DCMA) would likely provide contract administration. Transparency is limited due to the sole-source nature, but audits and reviews by the Government Accountability Office (GAO) and the Department of Defense Inspector General (DoDIG) are possible avenues for oversight.

Related Government Programs

AH-64 Apache Helicopter Production
Aviation Component Procurement
Department of Defense Aircraft Maintenance
Rotary Wing Aircraft Spares

Risk Flags

Sole-source award
Lack of detailed performance metrics
Absence of competitive bidding data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $205.7 million to MCDONNELL DOUGLAS HELICOPTER COMPANY. 200009!2100!001176!AH23 !USA AVIATION AND MISSILE COMMAND!DAAH2300C0124 !A!*!* !20000602!20051230!047800297!006265946!009256819!N!8V613!MCDONNELL DOUGLAS HELICOPTER C!5000 E. MCDOWELL ROAD !MESA !AZ!85215!46000!013!04!MESA !MARICOPA !ARIZONA !0001!+000002320499!Y!N!000000000000!1520!AIRCRAFT ROTARY WING !A1A!AIRFRAMES AND SPARES !1AIC!APACHE (AH-64) ADV ATTACK !3728!3!*!*!*!B!N!Z!B !N!J!

Who is the contractor on this award?

The obligated recipient is MCDONNELL DOUGLAS HELICOPTER 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 $205.7 million.

What is the period of performance?

Start: 2000-06-02. End: 2009-10-31.

What is the historical spending trend for Apache helicopter airframes and spares with McDonnell Douglas Helicopter Company or its successors?

Analyzing historical spending requires access to detailed contract databases beyond the provided snippet. However, the current contract's duration (2000-2009) and value ($205.7M) suggest a significant, long-term commitment. If this represents a continuation or renewal of previous support, it indicates a consistent need and established relationship. Without prior data, it's difficult to ascertain if spending has increased, decreased, or remained stable over time. Further investigation into prior contracts for the AH-64 program would be necessary to establish a comprehensive spending trend.

How does the per-unit cost of these airframes and spares compare to industry benchmarks or other government contracts?

The provided data does not include per-unit cost information, making direct benchmarking impossible. The total contract value is $205.7 million over approximately 9 years. To assess per-unit costs, one would need the quantity of airframes and specific spare parts procured, along with their individual prices. As this was a sole-source award, there is no competitive data to establish a market-driven price point. Comparing it to other sole-source contracts for similar high-value, specialized military components would be the most feasible, albeit still limited, approach to gauge reasonableness.

What are the specific risks associated with a sole-source contract for critical helicopter components?

The primary risk of a sole-source contract is the lack of competition, which can lead to inflated prices and reduced incentive for the contractor to innovate or improve efficiency. There's also a risk of vendor lock-in, where the government becomes overly reliant on a single supplier, potentially facing supply disruptions if the contractor experiences financial difficulties or production issues. Furthermore, without competitive pressure, the quality of goods or services might not be as rigorously tested against alternatives. Transparency in pricing and justification becomes paramount to mitigate these risks.

What is the track record of McDonnell Douglas Helicopter Company (or its successor) in delivering on similar large-scale defense contracts?

McDonnell Douglas Helicopter Company, later acquired by The Boeing Company, has a long and established history in defense contracting, particularly with the AH-64 Apache program. They were the original manufacturer of the AH-64. Their track record generally includes successful production and support of complex military aircraft. However, like any large defense contractor, they would have faced program challenges, cost overruns, and schedule delays on various contracts over the years. Specific performance on this particular contract (DAAH2300C0124) would require detailed contract performance reports, which are not provided here.

What is the strategic importance of the AH-64 Apache program to the U.S. Army, and how does this contract support that mission?

The AH-64 Apache is a critical attack helicopter platform for the U.S. Army, providing essential close air support, armed reconnaissance, and anti-tank capabilities. Its role is vital in both conventional and asymmetric warfare scenarios. This contract, by ensuring the supply of airframes and spare parts, directly supports the operational readiness and sustainment of the Apache fleet. Without a steady supply of these fundamental components, the Army's ability to deploy and maintain its Apache helicopters would be significantly compromised, impacting its overall combat effectiveness and mission accomplishment.

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: THE Boeing Company (UEI: 009256819)

Address: 5000 E MCDOWELL RD, MESA, AZ, 04

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline