NASA's $444M Boeing Contract: Long Duration, Cost-Plus, and Limited Competition Concerns
Contract Overview
Contract Amount: $44,430,448 ($44.4M)
Contractor: THE Boeing Company (0674)
Awarding Agency: National Aeronautics and Space Administration
Start Date: 1999-10-15
End Date: 2012-03-09
Contract Duration: 4,529 days
Daily Burn Rate: $9.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE
Sector: Defense
Place of Performance
Location: SAINT LOUIS, ST. LOUIS (CITY) County, MISSOURI, 63166
State: Missouri Government Spending
Plain-Language Summary
National Aeronautics and Space Administration obligated $44.4 million to THE BOEING COMPANY (0674) for work described as: Key points: 1. Significant contract value of $444.3 million awarded to a single large business. 2. Lack of competition (NOT COMPETED) raises questions about price discovery and value for money. 3. Cost Plus Incentive fee structure can incentivize cost overruns, posing a risk to taxpayers. 4. Long contract duration (4529 days) may indicate a lack of flexibility and potential for outdated technology.
Value Assessment
Rating: questionable
The contract's cost-plus incentive fee structure, combined with a lack of competition, makes a direct pricing assessment difficult. Without competitive benchmarks, it's hard to determine if the $444.3 million represents fair value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source or limited competition award. This significantly reduces the potential for price discovery and may lead to higher costs for the government.
Taxpayer Impact: The lack of competition and cost-plus structure could result in taxpayers bearing higher costs than if the contract had been competitively bid.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. Long contract duration could lead to the use of potentially outdated technology. Reliance on a single contractor for an extended period can create dependency and limit future innovation.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of Competition
- Cost-Plus Fee Structure
- Long Contract Duration
- Sole Source Award
Positive Signals
- Awarded to a known, established contractor (Boeing)
Sector Analysis
This contract falls within the aerospace and defense sector, characterized by high R&D costs and complex technological requirements. Spending benchmarks in this sector vary widely based on project scope, but long-duration, non-competed contracts often warrant closer scrutiny.
Small Business Impact
The contract was awarded to The Boeing Company, a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award, suggesting missed opportunities for small business participation.
Oversight & Accountability
The 'NOT COMPETED' status suggests potential issues with the justification for not seeking competitive bids. Further oversight is needed to ensure the necessity of this approach and to verify that the government received the best possible value.
Related Government Programs
- National Aeronautics and Space Administration Contracting
- National Aeronautics and Space Administration Programs
Risk Flags
- Lack of competition may lead to inflated prices.
- Cost-plus contracts can incentivize higher spending.
- Long contract duration increases risk of obsolescence and cost overruns.
- Potential for contractor lock-in and reduced innovation.
- Limited transparency in pricing due to sole-source nature.
Tags
national-aeronautics-and-space-administr, mo, po, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $44.4 million to THE BOEING COMPANY (0674). See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is THE BOEING COMPANY (0674).
Which agency awarded this contract?
Awarding agency: National Aeronautics and Space Administration (National Aeronautics and Space Administration).
What is the total obligated amount?
The obligated amount is $44.4 million.
What is the period of performance?
Start: 1999-10-15. End: 2012-03-09.
What was the specific justification for not competing this significant contract, and how was the initial price determined without competitive offers?
The justification for not competing this contract is crucial for understanding the government's rationale. Without competitive bids, the initial price determination likely relied on historical data, cost estimates, or sole-source negotiation strategies. A thorough review of the contract file would be necessary to ascertain the specific justification and the methodology used for price setting, ensuring it aligns with federal procurement regulations and aims for fair and reasonable pricing.
Given the cost-plus incentive fee structure and long duration, what mechanisms were in place to control costs and ensure performance targets were met?
Cost-plus incentive fee (CPIF) contracts aim to align contractor and government interests by sharing cost savings or overruns. For this contract, oversight mechanisms would ideally include detailed performance metrics, regular progress reviews, and clear incentive fee targets tied to specific milestones. The government's contracting officers would need to actively manage the contract, monitor expenditures, and ensure that the incentive structure effectively drove performance and cost control throughout the extended period.
How does the long duration and sole-source nature of this contract impact NASA's ability to adopt newer technologies or adapt to evolving mission requirements?
A long-duration, sole-source contract can indeed limit flexibility. NASA might face challenges in incorporating technological advancements that emerge during the contract's lifespan unless specific provisions for upgrades or modifications are included. Furthermore, reliance on a single contractor may hinder the exploration of alternative solutions or innovative approaches that could arise from a competitive environment, potentially impacting long-term mission effectiveness and cost efficiency.
Competition & Pricing
Extent Competed: NOT COMPETED
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE (V)
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
Financial Breakdown
Contract Ceiling: $55,849,448
Exercised Options: $55,849,448
Current Obligation: $44,430,448
Timeline
Start Date: 1999-10-15
Current End Date: 2012-03-09
Potential End Date: 2012-03-09 00:00:00
Last Modified: 2012-04-30
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