DoD's $89.8M aircraft parts contract to Boeing shows long-term commitment with potential for cost efficiencies

Contract Overview

Contract Amount: $89,767,122 ($89.8M)

Contractor: THE Boeing Company (0674)

Awarding Agency: Department of Defense

Start Date: 2003-09-18

End Date: 2013-03-31

Contract Duration: 3,482 days

Daily Burn Rate: $25.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

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 $89.8 million to THE BOEING COMPANY (0674) for work described as: Key points: 1. Contract awarded to a major defense contractor suggests a focus on established capabilities and supply chains. 2. The firm-fixed-price structure aims to provide cost certainty for the government. 3. A long performance period (3482 days) indicates a sustained need for these aircraft parts. 4. The contract's value, while substantial, needs to be benchmarked against similar long-term supply agreements. 5. The absence of small business set-asides warrants further investigation into subcontracting opportunities. 6. The 'Other Aircraft Parts' category suggests a broad range of components, potentially impacting diverse aircraft platforms.

Value Assessment

Rating: fair

The total award amount of $89.8 million over a decade suggests a significant investment. Benchmarking this against the average cost of similar long-term supply contracts for aircraft parts is crucial. Without specific unit cost data or comparisons to other sole-source or competitively awarded contracts for comparable parts, assessing value for money is challenging. The firm-fixed-price type offers predictability but may not always reflect the lowest possible cost if competition was limited.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of 3 bidders suggests a reasonable level of competition for this requirement. However, the specific details of the bidding process and the nature of the competition (e.g., were there significant barriers to entry for potential bidders?) would provide a clearer picture of its effectiveness in driving down prices.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to better pricing and innovation. The fact that three bids were received suggests that the government likely received a range of offers, potentially resulting in a more favorable price than a sole-source award.

Public Impact

The primary beneficiaries are likely the U.S. Air Force and potentially other Department of Defense branches relying on the specified aircraft parts. This contract ensures the continued availability of critical components for maintaining and operating various aircraft fleets. The geographic impact is primarily centered around the contractor's facilities and the operational bases of the supported aircraft. Workforce implications include sustained employment at Boeing and its supply chain partners involved in manufacturing and delivering these parts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to price escalation if not managed proactively.
Lack of specific small business set-aside information raises concerns about downstream subcontracting opportunities.
Dependence on a single large contractor for a decade might limit flexibility in sourcing alternative parts or suppliers.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process.
Firm-fixed-price contract provides cost certainty for the government.
Long-term nature of the contract indicates a stable and predictable supply of essential parts.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The market for aircraft components is characterized by high technical requirements, stringent quality control, and often long production cycles. Spending in this area is critical for maintaining military readiness. Comparable spending benchmarks would involve analyzing other long-term supply agreements for similar aircraft parts across different branches of the military or even commercial aviation.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the primary award went to a large business. Further analysis would be needed to determine if there are subcontracting plans or opportunities for small businesses to participate in fulfilling parts of this contract. Without explicit set-aside provisions, the direct impact on the small business ecosystem is likely limited unless subcontracting goals are actively pursued and met.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program management office within the Department of the Air Force. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified parts meeting quality standards. Transparency is generally maintained through contract databases like FPDS, though detailed performance metrics and oversight reports may not always be publicly accessible.

Related Government Programs

Aircraft Maintenance and Repair
Aerospace Manufacturing
Defense Logistics Support
Air Force Procurement

Risk Flags

Long-term contract duration
Potential for supply chain vulnerabilities
Lack of explicit small business subcontracting details

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $89.8 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 (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $89.8 million.

What is the period of performance?

Start: 2003-09-18. End: 2013-03-31.

What is the historical spending trend for this specific contract vehicle or similar aircraft parts procurements by the Department of the Air Force?

Analyzing historical spending for this specific contract vehicle (NAICS 336413) by the Department of the Air Force reveals a pattern of significant, long-term investments in aircraft parts. This particular award, spanning from 2003 to 2013 for approximately $89.8 million, represents a substantial commitment. While this specific contract is concluded, similar long-term supply agreements for critical components are common within the DoD. Trends often show consistent annual spending within the billions for aircraft parts across all branches, driven by fleet size, modernization programs, and operational tempo. Fluctuations can occur based on major acquisition programs, depot maintenance schedules, and geopolitical events requiring increased operational readiness. Understanding these broader trends helps contextualize the value and necessity of individual large-scale contracts like this one.

How does the awarded price per unit, if determinable, compare to market rates for similar aircraft components?

Determining a precise 'price per unit' for this contract is challenging without access to the detailed line-item data within the award documentation. The contract covers a broad category of 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' implying a wide variety of components with differing costs. Furthermore, the total award amount of $89.8 million was spread over a decade (3482 days), making a simple division by the number of years or the total duration misleading. To compare effectively with market rates, one would need to identify specific part numbers, quantities procured, and their corresponding unit prices. Benchmarking would then involve researching commercial off-the-shelf (COTS) prices, prices from other government contracts (especially those awarded competitively), and manufacturer price lists. Given the specialized nature of military aircraft parts, direct comparisons can be difficult, and government pricing is often subject to negotiation and specific quality/testing requirements that can influence cost.

What are the key performance indicators (KPIs) used to measure the success and effectiveness of this contract?

While specific KPIs for this concluded contract are not publicly detailed, typical performance indicators for long-term supply contracts of aircraft parts include: On-Time Delivery Rate (ensuring parts arrive when needed to support maintenance schedules), Quality Acceptance Rate (percentage of delivered parts meeting all specifications and free from defects), Contract Compliance (adherence to terms, including reporting and documentation), and Cost Performance (managing costs within the agreed-upon fixed price, or identifying potential cost savings). For a contract of this magnitude and duration, the Air Force would likely monitor these metrics closely through program management reviews and contractor performance assessments. Success would be defined by the consistent availability of high-quality parts, minimizing aircraft downtime and supporting operational readiness without significant cost overruns or quality issues.

What is The Boeing Company's track record with similar large-scale aircraft parts supply contracts for the Department of Defense?

The Boeing Company has an extensive and long-standing track record of supplying aircraft, components, and related services to the Department of Defense (DoD). They are a primary contractor for numerous major aircraft platforms, including fighters, bombers, transport, and training aircraft. Consequently, they routinely manage large-scale contracts for spare parts, sustainment, and upgrades. Their history includes both highly successful, long-term partnerships and instances of contract challenges or cost overruns, particularly on complex development programs. For sustainment and parts supply contracts like the one detailed, Boeing's experience is deep, leveraging established manufacturing processes and supply chains. Their performance on such contracts is generally evaluated based on delivery timeliness, quality, and adherence to contractual terms, with a history of fulfilling significant portions of the DoD's aircraft parts requirements.

Were there any identified risks or challenges associated with this contract during its performance period, and how were they mitigated?

Specific risks and mitigation strategies for this concluded contract are not detailed in the provided summary data. However, common risks associated with long-term, high-value aircraft parts contracts include supply chain disruptions (e.g., raw material shortages, supplier failures), manufacturing defects, changes in technical requirements, obsolescence of components, and cost increases beyond the fixed-price agreement. Mitigation strategies typically employed by the DoD and contractors like Boeing involve robust supply chain management, rigorous quality assurance processes, proactive obsolescence management, contingency planning, and regular contract performance reviews. For a firm-fixed-price contract, the risk of cost increases often falls more heavily on the contractor, incentivizing them to manage these risks effectively. Any significant issues would likely have been addressed through formal contract modifications, performance improvement plans, or dispute resolution processes.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Boeing Company (UEI: 009256819)

Address: J S MCDONNELL BLVD, SAINT LOUIS, MO, 90

Business Categories: Category Business, Not Designated a Small Business

Parent Contract

Parent Award PIID: F3365701D2074

IDV Type: IDC

Timeline