DoD Spends $606M on Apache Helicopter Parts, Awarded Sole-Source to McDonnell Douglas

Contract Overview

Contract Amount: $605,979,816 ($606.0M)

Contractor: Mcdonnell Douglas Helicopter Company

Awarding Agency: Department of Defense

Start Date: 1997-01-10

End Date: 2006-08-24

Contract Duration: 3,513 days

Daily Burn Rate: $172.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 199712!2100!0465!AJ09 !USA AVIATION AND TROOP COMMAND !DAAJ0995CA001 !A!*!P00019 !19970110!19990930!047800297!006265946!009256819!N!8V613!MCDONNELL DOUGLAS HELICOPTER C!5000 E MC DOWELL RD !MESA !AZ!85215!46000!013!04!MESA !MARICOPA !ARIZONA !0001!+000030600000!N!N!000000000000!1520!AIRCRAFT ROTARY WING !A1A!AIRFRAMES AND SPARES !1AIC!APACHE (AH-64) ADV ATTACK !3728!3!*!*!C!B!B!*!D !N!J!1!001!N!1A!A!Y!Z!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!B!N!*!*!*!*!*!

Place of Performance

Location: MESA, MARICOPA County, ARIZONA, 85215

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $606.0 million to MCDONNELL DOUGLAS HELICOPTER COMPANY for work described as: 199712!2100!0465!AJ09 !USA AVIATION AND TROOP COMMAND !DAAJ0995CA001 !A!*!P00019 !19970110!19990930!047800297!006265946!009256819!N!8V613!MCDONNELL DOUGLAS HELICOPTER C!5000 E MC DOWELL RD !MESA !AZ!85215!46000!013!04!MESA !MARICO… Key points: 1. Significant spending on critical aircraft components highlights reliance on specific platforms. 2. Sole-source award raises questions about competition and potential for inflated pricing. 3. Long contract duration (over 9 years) suggests a sustained need for these parts. 4. The award to McDonnell Douglas, a major defense contractor, indicates a concentrated market for these specialized parts.

Value Assessment

Rating: questionable

The contract value of $605,979,816 for aircraft parts is substantial. Without specific unit cost data or benchmarks for similar contracts, it's difficult to definitively assess value for money. However, the sole-source nature of the award warrants scrutiny regarding pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning competition was not sought. This significantly limits price discovery and potentially leads to higher costs for taxpayers compared to a competitively bid contract.

Taxpayer Impact: The lack of competition in this large contract could result in taxpayers paying more than necessary for essential aircraft parts.

Public Impact

Taxpayers funded a large sum for helicopter parts, impacting the defense budget. The sole-source award may limit innovation and cost-saving opportunities for the government. This spending supports the operational readiness of Apache helicopters, crucial for military operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition
Lack of transparency in pricing due to no competition
Potential for cost overruns without competitive pressure

Positive Signals

Ensures supply of critical aircraft parts
Supports readiness of Apache helicopter fleet

Sector Analysis

This contract falls within the Defense sector, specifically for aircraft parts. Spending on aviation components is a significant portion of the DoD budget, with benchmarks often driven by complex manufacturing and specialized requirements.

Small Business Impact

The award went to a large prime contractor, McDonnell Douglas. There is no indication in the data provided whether small businesses were involved as subcontractors, which is a common practice in large defense contracts.

Oversight & Accountability

The sole-source nature of this award suggests that oversight may have focused on justification for not competing rather than on achieving the best possible price through competition. Further review of the justification for sole-source procurement is warranted.

Related Government Programs

Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Long contract duration without clear competitive milestones
Limited transparency on pricing justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $606.0 million to MCDONNELL DOUGLAS HELICOPTER COMPANY. 199712!2100!0465!AJ09 !USA AVIATION AND TROOP COMMAND !DAAJ0995CA001 !A!*!P00019 !19970110!19990930!047800297!006265946!009256819!N!8V613!MCDONNELL DOUGLAS HELICOPTER C!5000 E MC DOWELL RD !MESA !AZ!85215!46000!013!04!MESA !MARICOPA !ARIZONA !0001!+000030600000!N!N!000000000000!1520!AIRCRAFT ROTARY WING !A1A!AIRFRAMES AND SPARES !1AIC!APACHE (AH-64) ADV ATTACK !3728!3!*!*!C!B!B!*!D !N!J!1!0

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 $606.0 million.

What is the period of performance?

Start: 1997-01-10. End: 2006-08-24.

What was the justification for awarding this contract on a sole-source basis, and was it adequately documented?

The provided data indicates the contract was 'NOT COMPETED'. A thorough review would require accessing the contract file to examine the specific justification (e.g., unique capabilities, urgent need, lack of sources). Adequate documentation is crucial to ensure the government received fair value and followed procurement regulations, especially when competition is bypassed.

How does the per-unit cost of these Apache helicopter parts compare to similar components purchased competitively?

Without access to specific unit cost data and comparable contract information, a direct comparison is not possible. However, sole-source contracts inherently carry a higher risk of inflated pricing due to the absence of competitive pressure. Benchmarking against similar parts procured competitively would be essential for a value assessment.

What is the long-term strategy for procuring these parts to ensure future cost-effectiveness and availability?

The contract's long duration (over 9 years) suggests a need for a sustained supply. Future strategies should explore opportunities for competition, potentially through multi-year contracts with options, or by encouraging new entrants into the market to foster innovation and reduce long-term costs for these critical Apache helicopter components.

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: THE Boeing Company (UEI: 009256819)

Address: 5000 E MC DOWELL RD, MESA, AZ, 04

Business Categories: Category Business, Not Designated a Small Business

Timeline