DoD's $87.8M Boeing contract for aircraft modification awarded in 1992, expiring in 2011

Contract Overview

Contract Amount: $87,846,420 ($87.8M)

Contractor: THE Boeing Company (0674)

Awarding Agency: Department of Defense

Start Date: 1992-06-15

End Date: 2011-05-04

Contract Duration: 6,897 days

Daily Burn Rate: $12.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $87.8 million to THE BOEING COMPANY (0674) for work described as: Key points: 1. Contract awarded for aircraft modification services, indicating a need for ongoing fleet support. 2. Long contract duration of nearly 19 years suggests a sustained requirement and potential for contractor lock-in. 3. Awarded as 'Not Competed', raising questions about the justification for bypassing competitive bidding. 4. Firm Fixed Price contract type aims to control costs, but long duration may obscure true value. 5. The contract's significant value points to a major program within the Department of Defense. 6. Boeing's established role as a major defense contractor is highlighted by this award.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its age and the specific nature of aircraft modification. The firm fixed-price structure suggests an attempt to control costs, but the nearly 19-year duration means the initial pricing may not reflect current market conditions or technological advancements. Without details on the scope of work and comparison to similar modifications performed on comparable aircraft, assessing value-for-money is difficult. The lack of competition further complicates a robust value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a 'Not Competed' procedure, indicating that a competitive bidding process was not utilized. This typically occurs when only one source is capable of meeting the requirement, or in situations where urgency or specific circumstances preclude competition. The lack of multiple bidders means there was no opportunity for price discovery through a competitive market, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to drive down prices. The justification for not competing the award needs to be thoroughly scrutinized to ensure it was in the government's best interest.

Public Impact

The primary beneficiaries are the Department of Defense and its operational readiness, through the maintenance and enhancement of its aircraft fleet. Services delivered include modifications to aircraft, likely aimed at improving performance, safety, or extending service life. The geographic impact is likely concentrated around military bases where these aircraft are stationed or maintained. Workforce implications include skilled labor for aircraft mechanics, engineers, and technicians involved in the modification process.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced innovation.
Long contract duration may lead to cost inefficiencies if not actively managed and re-evaluated.
Awarded in 1992, the pricing and scope may be outdated relative to current market standards.

Positive Signals

Firm Fixed Price contract type provides cost certainty if scope is well-defined.
Boeing's long-standing relationship and expertise in aircraft modification suggest a high likelihood of successful technical execution.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft sustainment and upgrade services. The market for defense aircraft modification is dominated by a few large prime contractors like Boeing, due to the specialized knowledge, security clearances, and infrastructure required. Spending in this area is critical for maintaining military readiness and technological superiority, with significant government investment annually in fleet modernization and support.

Small Business Impact

There is no indication that this contract involved small business set-asides or subcontracting goals. As a sole-source award to a large prime contractor, the direct impact on small businesses is likely minimal unless Boeing actively engaged them as subcontractors. The absence of set-asides suggests that opportunities for small businesses to compete for this specific work were not pursued.

Oversight & Accountability

Oversight for this contract would have been managed by the Defense Contract Management Agency (DCMA). Accountability measures would include contract performance reviews, quality assurance checks, and financial audits. Transparency is limited due to the sole-source nature of the award; however, contract modifications and payment milestones would typically be recorded. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Aircraft Procurement
Aircraft Maintenance and Repair
Defense Logistics Support
Aerospace Engineering Services

Risk Flags

Lack of Competition
Long Contract Duration
Potential for Outdated Pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $87.8 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: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $87.8 million.

What is the period of performance?

Start: 1992-06-15. End: 2011-05-04.

What specific aircraft type and modifications were covered under this contract?

The provided data does not specify the exact aircraft type or the nature of the modifications. However, given the contractor (Boeing) and the agency (Department of Defense), it is highly probable that the contract pertained to modifications for military aircraft such as fighters, bombers, transport planes, or reconnaissance aircraft. Modifications could range from avionics upgrades, structural enhancements, weapons system integration, or life extension programs. Without further documentation, the precise scope remains unknown.

What was the justification for awarding this contract on a sole-source basis?

The data indicates the contract was 'NOT COMPETED'. Common justifications for sole-source awards in defense contracting include: unique technical capabilities possessed by only one contractor, urgent and compelling needs where competition is impractical, or when the requirement is a follow-on to a previously competed contract where only the original contractor can provide the necessary integration or compatibility. For a contract awarded in 1992, the justification likely relates to Boeing's proprietary knowledge of its aircraft systems or a specific, specialized modification requirement that no other firm could fulfill at the time.

How did the firm fixed-price (FFP) structure perform over the contract's nearly 19-year duration?

A Firm Fixed Price (FFP) contract aims to provide cost certainty by fixing the price regardless of the contractor's actual costs. Over a long duration like this (1992-2011), the effectiveness of FFP depends heavily on the initial price realism and the management of scope changes. If the initial estimate was accurate and the scope remained stable, FFP would have been beneficial. However, if significant unforeseen issues arose or the scope evolved substantially, the contractor might have been disadvantaged, potentially leading to requests for equitable adjustments or contract modifications. Conversely, if the initial price was too high, the government would have overpaid. Without detailed performance data and modification history, it's difficult to definitively assess the FFP's performance over its lifespan.

What was the total spending trend for this specific contract over its lifespan?

The provided data shows a total award amount of $87,846,420.34. However, this figure represents the total value obligated at the time of award or over the contract's life, not necessarily the annual spending trend. To understand the spending trend, one would need access to contract line item (CLIN) data and de-obligations over the period from June 15, 1992, to May 4, 2011. This would reveal how the funds were disbursed over time, whether spending was consistent, or if there were periods of high or low expenditure, potentially correlating with specific modification phases or program milestones.

Are there comparable contracts for similar aircraft modifications awarded competitively during the same period?

Identifying directly comparable contracts is challenging without knowing the specific aircraft and modification type. However, during the 1990s and early 2000s, the Department of Defense frequently awarded contracts for aircraft upgrades and sustainment. Competitively awarded contracts for similar services often involved multiple bids from major aerospace manufacturers and their MRO (Maintenance, Repair, and Overhaul) divisions. Benchmarking this $87.8 million sole-source award against the pricing and terms of similar, competed modifications for comparable aircraft (e.g., F-16 upgrades, C-130 enhancements) would be necessary to assess if the government received fair market value.

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: THE Boeing Company (UEI: 009256819)

Address: LAMBERT BLDG, SAINT LOUIS

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline