DoD awards Boeing $820M for Engineering Services, a sole-source contract spanning 15 years
Contract Overview
Contract Amount: $820,333,931 ($820.3M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2004-06-30
End Date: 2019-10-31
Contract Duration: 5,601 days
Daily Burn Rate: $146.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Place of Performance
Location: MESA, MARICOPA County, ARIZONA, 85215
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $820.3 million to THE BOEING COMPANY for work described as: Key points: 1. Significant contract value of over $820 million awarded to a single large business. 2. Sole-source award raises questions about competition and potential price overruns. 3. Long contract duration (15 years) may limit flexibility and opportunities for competitive re-evaluation. 4. The engineering services sector is critical for defense, but this award lacks transparency.
Value Assessment
Rating: questionable
The contract value is substantial, but without competitive bidding, it's difficult to assess if the pricing is optimal or reflects fair market value compared to similar engineering services contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs for taxpayers as there was no competitive pressure to drive down prices.
Taxpayer Impact: The lack of competition in this large award means taxpayers may be paying a premium for engineering services, as the government did not explore potentially more cost-effective options.
Public Impact
Taxpayers may be overpaying for essential engineering services due to the absence of competition. The long-term nature of the contract could lock the government into a potentially suboptimal pricing structure. Lack of transparency in the procurement process hinders public trust and accountability.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Long contract duration
- Lack of small business participation
- High contract value
Positive Signals
- Essential engineering services for defense
- Firm fixed price contract type
Sector Analysis
This contract falls within the Engineering Services sector (NAICS 541330), which is vital for the Department of Defense's operational capabilities. Spending in this sector is typically high, but competitive awards are crucial for cost efficiency.
Small Business Impact
The data indicates that small businesses were not involved in this contract (ss: false, sb: false). This represents a missed opportunity to support small business growth and leverage their specialized capabilities within the defense sector.
Oversight & Accountability
The sole-source nature of this large, long-term contract warrants close oversight to ensure the government is receiving fair value and that the contractor is meeting all performance requirements effectively.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award lacks competition
- Long contract duration (15 years)
- No small business participation
- High total contract value ($820M+)
- Potential for cost overruns due to lack of price discovery
Tags
engineering-services, department-of-defense, az, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $820.3 million to THE BOEING COMPANY. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is THE BOEING COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $820.3 million.
What is the period of performance?
Start: 2004-06-30. End: 2019-10-31.
What justification was provided for the sole-source award, and was a full and open competition truly not feasible?
The justification for a sole-source award is critical for understanding why competitive market forces were bypassed. Agencies must provide detailed documentation demonstrating that only one source could meet the requirement, or that exceptional circumstances prevented competition. Without this, it's difficult to assess if the government adequately explored all avenues for achieving best value and cost savings through a competitive process.
How does the pricing structure of this $820M contract compare to industry benchmarks for similar long-term engineering services, especially given the lack of competition?
Benchmarking the pricing of this sole-source contract against similar long-term engineering services is challenging without competitive data. However, a comparison to industry standards and historical pricing for comparable services, adjusted for scope and duration, would be essential. A significant deviation upwards could indicate a lack of price discipline due to the non-competitive nature of the award, potentially leading to taxpayer overspending.
What mechanisms are in place to ensure performance and cost control over the 15-year duration of this contract, given its sole-source status?
With a 15-year sole-source contract, robust performance monitoring and cost control mechanisms are paramount. This includes clearly defined performance metrics, regular progress reviews, and potential for contract modifications or re-negotiations if market conditions or requirements change significantly. The absence of competition means the government must proactively manage the contract to ensure continued value and prevent cost creep over its extended term.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
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: 5000 E MCDOWELL RD, MESA, AZ, 85215
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $192,028
Exercised Options: $192,028
Current Obligation: $820,333,931
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2004-06-30
Current End Date: 2019-10-31
Potential End Date: 2019-10-31 00:00:00
Last Modified: 2021-04-21
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