DoD awards $2.2B R&D contract for A160T aircraft to Boeing, spanning over 4 years
Contract Overview
Contract Amount: $22,195,170 ($22.2M)
Contractor: Boeing Company, the
Awarding Agency: Department of Defense
Start Date: 2007-09-28
End Date: 2012-03-31
Contract Duration: 1,646 days
Daily Burn Rate: $13.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: A160T AIRCRAFT
Place of Performance
Location: MESA, MARICOPA County, ARIZONA, 85215
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $22.2 million to BOEING COMPANY, THE for work described as: A160T AIRCRAFT Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, indicating potential for cost overruns. 2. Sole-source award limits competitive pressure, potentially impacting price efficiency. 3. Long contract duration (over 4 years) increases exposure to market and technological shifts. 4. Focus on Research and Development suggests high technical risk and uncertainty. 5. Contractor's extensive experience in aerospace likely a key factor in selection. 6. Geographic location in Arizona for contract performance noted.
Value Assessment
Rating: questionable
The contract's cost-plus-fixed-fee structure, while common for R&D, carries inherent risks of cost escalation. Without detailed cost breakdowns or comparisons to similar R&D efforts for advanced aircraft, it's difficult to definitively benchmark value. The lack of competition further complicates a precise value assessment, as market forces are absent. The total award value of $2.2 billion for a 4-year R&D effort on a specific aircraft platform warrants scrutiny for efficiency.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically justified when only one vendor possesses the necessary unique capabilities, technology, or intellectual property. However, the absence of competition means that the government did not benefit from the price discovery and potential cost savings that a competitive bidding process could have provided.
Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's ability to secure the best possible value for public funds.
Public Impact
The primary beneficiary is the Department of Defense, which will receive advanced aircraft technology. Services delivered include research and development for the A160T aircraft. Contract performance is located in Arizona, potentially impacting the local economy and workforce. The contract supports specialized R&D roles within the aerospace sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee structure may incentivize higher spending.
- Sole-source award limits transparency and competitive pricing.
- Long contract duration increases risk exposure.
- R&D focus implies inherent technical and schedule uncertainties.
Positive Signals
- Award to a major defense contractor (Boeing) suggests established capabilities.
- Contract addresses a specific, potentially critical, defense need.
- Defined contract period, though long, provides a framework for development.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on research and development for aircraft. The market for advanced military aircraft R&D is highly specialized, often dominated by a few large prime contractors. The total value of $2.2 billion for this specific R&D effort is substantial, reflecting the complexity and strategic importance of developing new aviation technologies for defense purposes.
Small Business Impact
This contract does not appear to involve small business set-asides, as it was awarded sole-source to a large prime contractor, The Boeing Company. There is no explicit information regarding subcontracting plans for small businesses within this award. Consequently, the direct impact on the small business ecosystem is likely minimal, with potential indirect benefits if Boeing engages small businesses as suppliers.
Oversight & Accountability
Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. The cost-plus-fixed-fee nature necessitates rigorous financial oversight to monitor expenditures and ensure adherence to the fixed fee. Transparency is limited due to the sole-source nature, but contract modifications and performance reports would be subject to internal DoD review.
Related Government Programs
- Advanced Aircraft Development Programs
- Department of Defense Research and Development
- Aviation Technology Procurement
- Sole-Source Defense Contracts
Risk Flags
- Sole-source award limits competitive pricing.
- Cost-plus-fixed-fee structure carries cost overrun risk.
- Long contract duration increases exposure to changing requirements and technology.
- R&D contracts inherently involve high technical and schedule uncertainty.
Tags
defense, department-of-defense, boeing-company, aircraft, research-and-development, sole-source, cost-plus-fixed-fee, arizona, large-contract, rotorcraft, unmanned-aircraft
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $22.2 million to BOEING COMPANY, THE. A160T AIRCRAFT
Who is the contractor on this award?
The obligated recipient is BOEING COMPANY, THE.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $22.2 million.
What is the period of performance?
Start: 2007-09-28. End: 2012-03-31.
What is the historical spending pattern for the A160T aircraft program prior to this award?
Information regarding prior spending specifically on the A160T program before this $2.2 billion award is not detailed in the provided data. This contract, initiated in September 2007 and ending in March 2012, appears to represent a significant phase of development or sustainment funding. Without access to historical contract databases or program budget documents, it's challenging to establish a precise spending trajectory. However, the nature of R&D contracts often involves phased funding tied to milestones, suggesting that prior expenditures would have been directed towards earlier research, design, and prototyping stages, potentially with different contract vehicles or agencies.
How does the cost-plus-fixed-fee structure compare to other R&D contracts for similar aircraft?
The cost-plus-fixed-fee (CPFF) structure is indeed common for research and development contracts, particularly when the scope of work involves significant uncertainty and evolving requirements, as is typical in advanced aircraft development. This structure allows the contractor to recover allowable costs plus a predetermined fixed fee representing profit. Compared to fixed-price contracts, CPFF offers flexibility but can lead to higher costs if not managed diligently. Benchmarking against similar R&D efforts requires detailed analysis of contract scope, technical complexity, and duration. However, CPFF generally carries a higher cost risk for the government than fixed-price incentive or firm-fixed-price contracts, especially if cost controls are not robust.
What are the specific technical risks associated with the A160T aircraft development under this contract?
The A160T program, being an R&D effort, inherently involves technical risks. While specific details are not provided, typical risks in advanced aircraft development include challenges in propulsion systems, aerodynamics, materials science, avionics integration, and control systems. The A160T, a large, unmanned rotorcraft designed for long endurance, likely faced unique challenges related to its rotor design, power plant efficiency, autonomous flight control, and payload integration. The CPFF contract structure suggests that the government anticipated these risks and provided a mechanism to cover associated costs, while the fixed fee aimed to provide the contractor with a defined profit margin irrespective of minor cost fluctuations.
What is Boeing's track record with large sole-source R&D contracts for the Department of Defense?
The Boeing Company has a long and extensive history of performing large-scale contracts, including sole-source R&D efforts, for the Department of Defense. As one of the largest aerospace and defense contractors globally, Boeing possesses significant expertise and infrastructure necessary for complex development programs. While sole-source awards are less common than competed contracts, they are often utilized for programs requiring specialized knowledge, proprietary technology, or follow-on development where Boeing is the incumbent or sole provider. Analyzing Boeing's overall performance on such contracts would involve reviewing numerous individual awards, focusing on cost performance, schedule adherence, and technical success metrics across its diverse portfolio.
What are the implications of this contract's sole-source nature on future competition for related technologies?
A sole-source award, by definition, bypasses the competitive process. This can have implications for future competition, particularly if the R&D conducted under this contract leads to proprietary technologies or unique capabilities that Boeing develops and controls. If the A160T program results in significant intellectual property or specialized manufacturing processes, it could create barriers to entry for potential competitors in subsequent phases or for related systems. Conversely, if the R&D is foundational and the government actively manages intellectual property rights, it could potentially foster future competition by enabling other firms to build upon the developed technologies, though this is less likely without explicit provisions.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences
Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: THE Boeing Company (UEI: 009256819)
Address: 5000 E MCDOWELL ROAD, MESA, AZ, 85215
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $22,195,170
Exercised Options: $22,195,170
Current Obligation: $22,195,170
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2007-09-28
Current End Date: 2012-03-31
Potential End Date: 2012-03-31 00:00:00
Last Modified: 2018-01-29
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