DoD Awards $350M to Boeing for AH-64D/E Apache Parts, Lacking Competition

Contract Overview

Contract Amount: $349,891,900 ($349.9M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2014-11-01

End Date: 2022-01-17

Contract Duration: 2,634 days

Daily Burn Rate: $132.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::OT::IGF APACHE D UNIQUE, D COMMON PARTS WITH ADDITIONAL REQUIREMENT FOR E UNIQUE AND E COMMON PARTS TO SUPPORT THE AH-64D/E WEAPON

Place of Performance

Location: MESA, MARICOPA County, ARIZONA, 85215

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $349.9 million to THE BOEING COMPANY for work described as: IGF::OT::IGF APACHE D UNIQUE, D COMMON PARTS WITH ADDITIONAL REQUIREMENT FOR E UNIQUE AND E COMMON PARTS TO SUPPORT THE AH-64D/E WEAPON Key points: 1. Significant award to a single, large defense contractor. 2. Focus on critical aircraft sustainment suggests ongoing need. 3. Lack of competition raises concerns about price discovery. 4. Engineering services for complex weapon systems are high-value.

Value Assessment

Rating: questionable

The contract value of $350M over 8 years is substantial. Without competitive bidding, it's difficult to assess if this price represents fair value compared to potential alternatives or market rates for similar engineering services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there is no market pressure to offer the best price.

Taxpayer Impact: The lack of competition likely results in a higher cost to the taxpayer than if the contract had been competitively bid.

Public Impact

Ensures continued operational readiness of the Apache helicopter fleet. Supports high-skilled engineering jobs within the defense sector. Potential for cost overruns due to non-competitive nature. Impacts the supply chain for critical defense components.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Positive Signals

Sector Analysis

This contract falls under engineering services for defense, a sector often characterized by long-term, high-value contracts with specialized requirements. Benchmarks are difficult without competitive data, but large sole-source awards are common for unique defense systems.

Small Business Impact

This contract does not appear to involve small business participation, as it is a direct award to a large prime contractor for specialized engineering services.

Oversight & Accountability

Oversight would focus on the justification for the sole-source award and the contractor's performance against contract requirements to mitigate risks associated with non-competitive procurement.

Related Government Programs

Risk Flags

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 $349.9 million to THE BOEING COMPANY. IGF::OT::IGF APACHE D UNIQUE, D COMMON PARTS WITH ADDITIONAL REQUIREMENT FOR E UNIQUE AND E COMMON PARTS TO SUPPORT THE AH-64D/E WEAPON

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 $349.9 million.

What is the period of performance?

Start: 2014-11-01. End: 2022-01-17.

What is the justification for awarding this contract sole-source?

The justification for a sole-source award typically centers on unique capabilities, proprietary technology, or urgent needs where only one contractor can fulfill the requirement. For complex systems like the Apache, this often relates to specific design knowledge, existing infrastructure, or critical parts availability held exclusively by the original manufacturer or a designated supplier.

What are the primary risks associated with this sole-source contract?

The primary risks include potential cost overruns due to the absence of competitive pressure, reduced innovation, and a lack of incentive for the contractor to improve efficiency. There's also a risk of vendor lock-in, making it difficult and costly to switch providers in the future, and potential quality issues if oversight is insufficient.

How does this contract contribute to the overall effectiveness of the AH-64D/E weapon system?

This contract is crucial for maintaining the operational effectiveness of the AH-64D/E Apache fleet by ensuring the availability of unique and common parts, along with necessary engineering support. This sustains the platform's readiness, lethality, and overall mission capability, directly impacting the warfighter's ability to execute assigned tasks.

Industry Classification

NAICS: Professional, Scientific, and Technical ServicesArchitectural, Engineering, and Related ServicesEngineering 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 EAST MCDOWELL ROAD, MESA, AZ, 85215

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: $349,902,459

Exercised Options: $349,891,900

Current Obligation: $349,891,900

Subaward Activity

Number of Subawards: 288

Total Subaward Amount: $39,010,957

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline

Start Date: 2014-11-01

Current End Date: 2022-01-17

Potential End Date: 2022-01-17 00:00:00

Last Modified: 2024-09-25

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