Department of the Navy awards $14.3M contract for aircraft engine retrofit kits to Boeing, a sole-source procurement
Contract Overview
Contract Amount: $14,318,247 ($14.3M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2026-03-31
End Date: 2027-12-31
Contract Duration: 640 days
Daily Burn Rate: $22.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: RETROFIT KITS F NON-RSD MODEL
Place of Performance
Location: SAN ANTONIO, BEXAR County, TEXAS, 78226
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $14.3 million to THE BOEING COMPANY for work described as: RETROFIT KITS F NON-RSD MODEL Key points: 1. The contract value of $14.3 million for aircraft engine retrofit kits represents a significant investment in fleet readiness. 2. As a sole-source award to The Boeing Company, the absence of competition may impact price competitiveness. 3. The contract duration extends over two years, suggesting a sustained need for these specific retrofit capabilities. 4. The procurement is categorized under Aircraft Engine and Engine Parts Manufacturing, highlighting its specialized nature. 5. Performance is expected in Texas, indicating a specific geographic focus for this contract's execution.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging due to its sole-source nature. Without competitive bids, it's difficult to definitively assess if the $14.3 million price represents optimal value for money. However, the contract is for specialized retrofit kits, which may command higher prices if unique technical expertise or intellectual property is involved. Further analysis would require understanding the specific components and labor involved in the retrofit process and comparing them to industry standards for similar, albeit potentially less specialized, modifications.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis to The Boeing Company. This means that the Department of the Navy did not solicit bids from other potential suppliers. Sole-source procurements are typically justified when only one responsible source is available or capable of meeting the agency's needs. The lack of competition means that price discovery through market forces was not utilized, potentially leading to a higher price than if multiple vendors had competed.
Taxpayer Impact: Taxpayers may not benefit from the cost savings that typically arise from a competitive bidding process. The absence of competition limits the government's ability to negotiate the lowest possible price for these essential retrofit kits.
Public Impact
The primary beneficiaries are likely the U.S. Navy's aviation units, ensuring their aircraft engines are updated and maintained to operational standards. The services delivered involve the provision and potential installation of retrofit kits for specific non-RSD model aircraft engines. The contract has a geographic impact focused on Texas, where the work is expected to be performed. This contract supports specialized manufacturing jobs within the aerospace sector, specifically related to engine components and modifications.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pressure on pricing.
- Lack of transparency in the justification for sole-source procurement.
- Potential for cost overruns if not closely monitored due to lack of competition.
Positive Signals
- Award to a major defense contractor with a known track record.
- Focus on maintaining and upgrading critical aircraft engine components.
- Clear delivery and performance periods outlined in the contract.
Sector Analysis
This contract falls within the broader aerospace and defense manufacturing sector, specifically focusing on aircraft engine components. The market for specialized aircraft engine parts and modification kits is often dominated by original equipment manufacturers (OEMs) like Boeing, due to proprietary designs and technical expertise. Spending in this sub-sector is driven by military readiness requirements and the need to maintain aging fleets with updated technologies. Comparable spending benchmarks would typically involve other sole-source or limited-competition awards for similar OEM-specific upgrade kits.
Small Business Impact
This contract does not appear to include a small business set-aside. As a sole-source award to a large prime contractor, there is a reduced likelihood of direct subcontracting opportunities for small businesses unless explicitly mandated or pursued by the prime. The impact on the small business ecosystem is minimal in terms of direct award, but it highlights the reliance on large prime contractors for specialized defense equipment.
Oversight & Accountability
Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures would be tied to the delivery order's performance requirements and schedule. Transparency may be limited due to the sole-source nature, with justifications for the procurement method being the primary public disclosure. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Aircraft Engine Maintenance and Repair
- Aerospace Component Manufacturing
- Defense Logistics and Sustainment
- Military Aircraft Upgrades
Risk Flags
- Sole-source award without clear justification.
- Potential for inflated pricing due to lack of competition.
- Dependence on a single supplier for critical components.
Tags
defense, department-of-the-navy, aircraft-engine-parts-manufacturing, sole-source, firm-fixed-price, delivery-order, texas, large-business, non-competed
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $14.3 million to THE BOEING COMPANY. RETROFIT KITS F NON-RSD MODEL
Who is the contractor on this award?
The obligated recipient is THE BOEING COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $14.3 million.
What is the period of performance?
Start: 2026-03-31. End: 2027-12-31.
What is the specific justification for awarding this contract on a sole-source basis to The Boeing Company?
The provided data does not include the specific justification for the sole-source award. Typically, sole-source procurements are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source is available or capable of meeting the agency's needs, or in cases of urgent and compelling need. For this contract, the justification would likely stem from Boeing's unique position as the manufacturer of the specific aircraft engines requiring these retrofit kits, potentially involving proprietary technology, design data, or specialized tooling that only Boeing possesses. A detailed review of the contract's justification documentation would be necessary to confirm the precise reasons.
How does the $14.3 million contract value compare to historical spending on similar retrofit kits?
Direct comparison of the $14.3 million contract value to historical spending on similar retrofit kits is difficult without more specific data on the nature of the 'RETROFIT KITS F NON-RSD MODEL' and the scope of work. As this is a sole-source award, it bypasses the competitive process that would typically provide a market-based benchmark. To assess value, one would need to compare the per-unit cost of these kits, factoring in labor and materials, against industry averages for comparable engine modifications. Historical data from previous, potentially competitive, procurements for similar upgrades, if available, would be the most relevant benchmark, but such information is not provided here.
What are the primary risks associated with a sole-source procurement for critical aircraft components?
The primary risks associated with a sole-source procurement for critical aircraft components include a lack of price competition, which can lead to higher costs for the government and taxpayers. There is also a potential for reduced innovation and service quality, as the sole provider may face less pressure to improve their offerings. Furthermore, reliance on a single supplier can create supply chain vulnerabilities; if the sole provider experiences production issues or goes out of business, the government may face significant disruptions. Finally, the justification process for sole-source awards can sometimes be opaque, raising concerns about fairness and potential favoritism.
What is The Boeing Company's track record with the Department of the Navy for similar aircraft engine contracts?
The Boeing Company has an extensive and long-standing track record of contracting with the Department of the Navy, encompassing a wide range of aircraft, systems, and support services. While this specific contract is for retrofit kits, Boeing is a major manufacturer of naval aircraft and their associated components, including engines or engine systems. Their history with the Navy includes numerous large-scale contracts for aircraft production, maintenance, upgrades, and spare parts. Given their position as a primary defense contractor, it is highly probable that they have fulfilled similar requirements for engine-related modifications and parts in the past, though the specifics of this 'non-RSD model' retrofit would determine the direct comparability.
What are the potential performance implications of this contract for the Navy's fleet readiness?
This contract is intended to enhance fleet readiness by providing retrofit kits for non-RSD model aircraft engines. By updating these engines, the Navy aims to improve their reliability, performance, and potentially extend their operational lifespan. This can lead to reduced unscheduled maintenance, fewer mission aborts, and increased availability of aircraft for operational duties. The successful and timely delivery of these kits, as stipulated by the contract's delivery order schedule, is crucial for realizing these performance benefits and ensuring that the affected aircraft remain combat-capable and mission-ready.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Engine and Engine Parts Manufacturing
Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 6200 JAMES S MCDONNELL BLVD, SAINT LOUIS, MO, 63134
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: $36,507,494
Exercised Options: $14,318,247
Current Obligation: $14,318,247
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0001921G0006
IDV Type: BOA
Timeline
Start Date: 2026-03-31
Current End Date: 2027-12-31
Potential End Date: 2030-12-31 00:00:00
Last Modified: 2025-09-18
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