DoD awards Boeing $3.66B for Engineering Services, spanning over a decade
Contract Overview
Contract Amount: $3,658,089,907 ($3.7B)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 1999-10-26
End Date: 2011-04-08
Contract Duration: 4,182 days
Daily Burn Rate: $874.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Place of Performance
Location: TUKWILA, KING County, WASHINGTON, 98108
Plain-Language Summary
Department of Defense obligated $3.66 billion to THE BOEING COMPANY for work described as: Key points: 1. Significant contract value awarded to a single, large defense contractor. 2. Long duration suggests a sustained need for these engineering services. 3. Potential for cost overruns given the 'Cost Plus Award Fee' structure. 4. Limited visibility into specific engineering tasks and their necessity.
Value Assessment
Rating: questionable
The contract's Cost Plus Award Fee structure allows for significant profit potential beyond base costs, making direct pricing comparisons difficult. The long duration and lack of specific deliverables in the provided data raise concerns about value for money.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
While the contract was awarded under full and open competition, the long duration and the nature of engineering services may lead to contractor lock-in. The 'Cost Plus Award Fee' structure incentivizes cost incurrence, potentially impacting price discovery.
Taxpayer Impact: The substantial value and long term of this contract represent a significant allocation of taxpayer funds towards engineering services, with potential for inefficiency due to the fee structure.
Public Impact
Taxpayers are funding extensive engineering services for the Department of Defense over many years. The 'Cost Plus Award Fee' structure means contractor performance influences final payment, but also incentivizes spending. The long contract duration raises questions about the adaptability of services to evolving defense needs. The lack of small business participation is noted, with the contract awarded to a large prime contractor.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Award Fee structure
- Long contract duration
- Lack of specific performance metrics provided
- No small business participation
Positive Signals
- Awarded under full and open competition
- Contractor is a major defense provider
Sector Analysis
This contract falls within the Engineering Services sector, which is crucial for defense readiness and technological advancement. Benchmark spending in this area varies widely based on project scope and duration, but $3.66 billion over 12 years is substantial.
Small Business Impact
This contract does not appear to have involved small business participation, as it was awarded directly to a large prime contractor, The Boeing Company. Further analysis would be needed to determine if subcontracting opportunities were made available.
Oversight & Accountability
The 'Cost Plus Award Fee' structure requires robust oversight from the Defense Contract Management Agency to ensure performance targets are met and costs are reasonable. The long duration necessitates continuous monitoring of evolving requirements and contractor performance.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Potential for cost overruns due to CPAF structure.
- Long contract duration may not align with evolving needs.
- Lack of detailed performance metrics in summary data.
- No apparent small business participation.
- Limited insight into specific engineering tasks.
Tags
engineering-services, department-of-defense, wa, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $3.66 billion to THE BOEING COMPANY. See the official description on USAspending.
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 $3.66 billion.
What is the period of performance?
Start: 1999-10-26. End: 2011-04-08.
What specific engineering services were procured under this contract, and how do they align with current and future defense needs?
The provided data indicates 'Engineering Services' under NAICS code 541330. However, the specific nature of these services, such as design, analysis, testing, or research, is not detailed. Understanding the precise deliverables and their relevance to evolving defense technologies and strategic objectives is crucial for assessing the contract's true value and effectiveness over its long lifespan.
How effectively did the 'Cost Plus Award Fee' structure incentivize performance and control costs for this extensive engineering services contract?
The 'Cost Plus Award Fee' (CPAF) structure aims to reward contractors for meeting or exceeding performance goals while covering costs. However, CPAF can also incentivize cost incurrence, as the fee is often a percentage of costs. Without detailed performance reports and fee determination documentation, it's difficult to assess if this structure truly optimized value for the government or led to inflated costs over the contract's 12-year duration.
What was the competitive landscape for these engineering services, and did the full and open competition result in the best possible pricing and innovation?
While the contract was awarded under 'Full and Open Competition,' the long duration and the specialized nature of defense engineering services might limit the number of truly competitive bidders. The effectiveness of this competition in securing optimal pricing and fostering innovation depends on the specific requirements definition, the evaluation criteria used, and the overall market dynamics for these specialized services at the time of award.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 2
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 20403 68TH AVE S, KENT, WA, 98032
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $-3,609,342
Exercised Options: $-3,609,342
Current Obligation: $3,658,089,907
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 1999-10-26
Current End Date: 2011-04-08
Potential End Date: 2011-04-08 00:00:00
Last Modified: 2016-09-26
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