DoD's $417M McDonnell Douglas Contract for Airframe Components Awarded to Boeing Amidst Full and Open Competition

Contract Overview

Contract Amount: $417,135,198 ($417.1M)

Contractor: THE Boeing Company (0674)

Awarding Agency: Department of Defense

Start Date: 1997-02-11

End Date: 2006-12-31

Contract Duration: 3,610 days

Daily Burn Rate: $115.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 199705!5700!0015!GU47 !ASC/YTK !F3365795C0057 !A!*!P00007 !19970211!19991019!006265946!006265946!009256819!N!0PXV4!MCDONNELL DOUGLAS CORPORATION !LAMBERT ST LOUIS AIRPORT !SAINT LOUIS !MO!63103!65000!510!29!ST. LOUIS !ST. LOUIS (CITY) !MISSOURI !0001!+000000048000!N!N!000000000000!1560!AIRFRAME STRUCTURAL COMPONENTS !A1A!AIRFRAMES AND SPARES !3ATB!T-38 TALON !3721!3!*!S!C!B!A!*!A !N!R!2!008!B!* !A!N!Z!* !* !N!C!*!C!C!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: SAINT LOUIS, ST. LOUIS County, MISSOURI, 63134

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $417.1 million to THE BOEING COMPANY (0674) for work described as: 199705!5700!0015!GU47 !ASC/YTK !F3365795C0057 !A!*!P00007 !19970211!19991019!006265946!006265946!009256819!N!0PXV4!MCDONNELL DOUGLAS CORPORATION !LAMBERT ST LOUIS AIRPORT !SAINT LOUIS !MO!63103!65000!510!29!ST. LOUIS !ST. LO… Key points: 1. The contract, valued at $417.1 million, was awarded to McDonnell Douglas Corporation (later acquired by Boeing) for airframe structural components. 2. Awarded under full and open competition, the contract aimed to secure critical aircraft parts for the T-38 Talon program. 3. The duration of the contract was substantial, spanning from February 1997 to December 2006, indicating a long-term need. 4. The sector is dominated by large defense contractors, with Boeing being a major player in aircraft manufacturing.

Value Assessment

Rating: fair

The contract's value of $417.1 million for airframe structural components is significant. Benchmarking against similar contracts for specialized aircraft parts is challenging without more granular data on specific components and quantities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, suggesting a competitive bidding process. This method is generally expected to yield fair pricing, though the specific price discovery mechanisms are not detailed.

Taxpayer Impact: The use of full and open competition aims to ensure taxpayer funds are used efficiently by fostering a competitive environment for contract awards.

Public Impact

This contract supported the T-38 Talon aircraft, a vital training platform for military pilots, ensuring continued operational readiness. The award to McDonnell Douglas (later Boeing) reflects the consolidation within the aerospace and defense industry. Long-term contracts like this can provide stability for contractors but also warrant scrutiny for cost control over extended periods. The procurement of airframe structural components highlights the complex supply chains involved in maintaining military aviation assets.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (1997-2006) may present risks of cost overruns or outdated technology if not managed effectively.
Lack of specific per-unit cost data makes it difficult to assess true value for money.
Potential for contractor lock-in due to specialized nature of airframe components.

Positive Signals

Awarded under full and open competition, indicating a competitive process.
Contract supports a critical military training aircraft (T-38 Talon).
The contractor, Boeing, is a major established player in the defense industry.

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, specifically for airframe structural components. Spending in this area is driven by defense procurement needs and the lifecycle management of military aircraft. Benchmarks are typically high due to the specialized nature and stringent quality requirements.

Small Business Impact

The data indicates the primary awardee was McDonnell Douglas Corporation (later Boeing), a large prime contractor. There is no explicit information provided regarding the involvement or subcontracting opportunities for small businesses within this specific contract.

Oversight & Accountability

The contract was managed by the Defense Contract Management Agency (DCMA), responsible for oversight. The 'Cost Plus Award Fee' (CPAF) contract type suggests performance incentives, implying a degree of oversight focused on achieving specific program goals.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Long contract duration increases risk of cost escalation and technological obsolescence.
Lack of detailed cost breakdown hinders granular value assessment.
Potential for contractor consolidation impacting future competition.
Complexity of airframe manufacturing requires robust quality assurance.
CPAF structure requires careful monitoring of award fee criteria.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $417.1 million to THE BOEING COMPANY (0674). 199705!5700!0015!GU47 !ASC/YTK !F3365795C0057 !A!*!P00007 !19970211!19991019!006265946!006265946!009256819!N!0PXV4!MCDONNELL DOUGLAS CORPORATION !LAMBERT ST LOUIS AIRPORT !SAINT LOUIS !MO!63103!65000!510!29!ST. LOUIS !ST. LOUIS (CITY) !MISSOURI !0001!+000000048000!N!N!000000000000!1560!AIRFRAME STRUCTURAL COMPONENTS !A1A!AIRFRAMES AND SPARES !3ATB!T-38 TALON !3721!3!*!S!C!B!A!*!A !N!R!2!0

Who is the contractor on this award?

The obligated recipient is THE BOEING COMPANY (0674).

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $417.1 million.

What is the period of performance?

Start: 1997-02-11. End: 2006-12-31.

What was the specific rationale for choosing a Cost Plus Award Fee (CPAF) contract type for airframe structural components, and how did it incentivize performance and cost control?

The CPAF structure was likely chosen to incentivize contractor performance on complex, long-term projects where precise cost and schedule outcomes are difficult to predict upfront. It allows for a base fee plus an award fee tied to achieving specific performance metrics, encouraging efficiency and quality while providing flexibility for unforeseen challenges. This structure aims to balance contractor motivation with government oversight.

How did the acquisition of McDonnell Douglas by Boeing in 1997 potentially impact the execution and oversight of this contract?

The acquisition could have led to integration challenges, changes in management, or shifts in strategic priorities. Oversight would need to ensure continuity of supply, maintain contract terms, and manage any potential disruptions. The government would monitor how the combined entity managed the contract's remaining duration and deliverables.

Given the long duration (nearly 10 years), what measures were in place to ensure the airframe components remained technologically relevant and met evolving military requirements?

Long-term contracts often include provisions for technical refresh, change management processes, and periodic reviews to ensure continued relevance. The government likely had mechanisms to incorporate design updates or material improvements as needed, potentially through contract modifications or separate agreements, to keep the T-38 Talon components aligned with operational demands.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 8

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Boeing Company (UEI: 009256819)

Address: LAMBERT ST LOUIS AIRPORT, SAINT LOUIS, MO, 90

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

Contract Characteristics

Cost or Pricing Data: NO

Timeline