DoD's $210M Boeing Contract for Aircraft Parts: A Cost Plus Fixed Fee Award with Limited Competition

Contract Overview

Contract Amount: $209,782,542 ($209.8M)

Contractor: THE Boeing Company (0674)

Awarding Agency: Department of Defense

Start Date: 1999-10-08

End Date: 2003-12-31

Contract Duration: 1,545 days

Daily Burn Rate: $135.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $209.8 million to THE BOEING COMPANY (0674) for work described as: Key points: 1. The contract awarded to The Boeing Company for $209.8 million represents a significant expenditure in aircraft parts. 2. The 'NOT COMPETED' status indicates a lack of open competition, potentially impacting price discovery. 3. The Cost Plus Fixed Fee (CPFF) contract type can incentivize cost overruns if not managed carefully. 4. This award falls within the Defense sector, specifically for aircraft components.

Value Assessment

Rating: questionable

The Cost Plus Fixed Fee structure, while allowing flexibility, can lead to higher costs compared to fixed-price contracts if cost controls are weak. Without competitive bidding, it's difficult to benchmark pricing against market rates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, suggesting a sole-source or limited competition award. This limits the government's ability to leverage market forces to achieve the best possible price and value.

Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for these aircraft parts, as the government did not benefit from a competitive bidding process.

Public Impact

Taxpayers may be overpaying for essential aircraft parts due to the absence of competitive bidding. The long duration of the contract (1999-2003) raises questions about the initial justification for a sole-source award. The reliance on a single contractor for critical components could pose a supply chain risk.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost-plus contract type
Potential for cost overruns
Long contract duration

Positive Signals

Awarded to a major defense contractor
Contract supports critical defense needs

Sector Analysis

This contract falls under the aerospace and defense sector, specifically for the procurement of aircraft parts. Spending in this area is crucial for maintaining military readiness, but competitive procurement is vital to ensure cost-effectiveness.

Small Business Impact

The awardee is The Boeing Company, a large prime contractor. There is no indication that small businesses were involved as subcontractors or partners in this specific award, suggesting limited small business participation.

Oversight & Accountability

The 'NOT COMPETED' status warrants scrutiny to ensure the justification for avoiding full and open competition was sound and properly documented. Robust oversight is needed to manage the CPFF contract effectively and control costs.

Related Government Programs

Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competitive bidding
Potential for cost overruns with CPFF
Limited transparency on justification for sole-source
Long contract duration without clear competitive re-evaluation
No indication of small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $209.8 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 $209.8 million.

What is the period of performance?

Start: 1999-10-08. End: 2003-12-31.

What was the specific justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?

The provided data indicates the contract was 'NOT COMPETED'. A thorough review would be needed to ascertain the specific justification, such as unique technical requirements, urgency, or lack of viable alternatives. Without this information, it's difficult to assess if competitive options were adequately explored or if the sole-source decision was truly the most advantageous for the government.

How effectively was the Cost Plus Fixed Fee structure managed to control costs and ensure value for money, given the absence of competition?

The Cost Plus Fixed Fee (CPFF) structure inherently carries a risk of cost escalation if not rigorously managed. The government's oversight team would need to actively monitor Boeing's incurred costs, ensure efficiency, and verify that the fixed fee remained appropriate. The lack of competition makes it harder to establish a baseline for 'value for money' and increases the importance of stringent cost control measures.

What was the total cost growth or variance from the initial estimate for this contract, and how did it compare to similar sole-source awards?

The provided data does not include information on cost growth or variance from initial estimates. To assess the effectiveness of this contract, a detailed analysis of the final cost compared to the initial target cost and fee would be necessary. Benchmarking this against similar sole-source CPFF contracts for aircraft parts would provide further insight into whether the government achieved a reasonable price.

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

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: YES

Timeline