Army Awards $506M for 24 Apache Helicopters and Thales Radios to Boeing
Contract Overview
Contract Amount: $505,761,602 ($505.8M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2016-06-07
End Date: 2024-04-30
Contract Duration: 2,884 days
Daily Burn Rate: $175.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: QATAR PRODUCTION FOR 24 AH-64E APACHE HELICOPTERS WITH THALES RADIO
Place of Performance
Location: MESA, MARICOPA County, ARIZONA, 85215
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $505.8 million to THE BOEING COMPANY for work described as: QATAR PRODUCTION FOR 24 AH-64E APACHE HELICOPTERS WITH THALES RADIO Key points: 1. Significant investment in advanced military aviation capabilities. 2. Sole-source award to Boeing raises questions about competition and price. 3. Long contract duration (2016-2024) suggests complex program requirements. 4. Focus on aircraft manufacturing, a key defense sector.
Value Assessment
Rating: questionable
The contract value of $506 million for 24 AH-64E Apache helicopters and Thales radios is substantial. Without comparable sole-source procurements or detailed cost breakdowns, assessing its value against similar contracts is difficult. The lack of competition inherently limits price discovery.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, indicating that only one vendor, The Boeing Company, was considered capable of fulfilling the requirement. This significantly limits price competition and may lead to higher costs for taxpayers.
Taxpayer Impact: The sole-source nature of this award means taxpayers may not be receiving the best possible price due to the absence of competitive bidding.
Public Impact
Enhances US military's attack helicopter fleet capabilities. Supports advanced avionics and communication systems for critical missions. Potential for long-term sustainment and upgrade contracts. Impacts the aerospace and defense manufacturing sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition.
- Long contract duration may indicate cost overruns.
- Lack of transparency in pricing due to sole-source nature.
Positive Signals
- Acquisition of advanced military hardware.
- Supports a key US defense contractor.
- Addresses critical national security needs.
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, a critical component of the defense industrial base. Spending benchmarks for similar sole-source procurements of advanced military aircraft are often high due to specialized technology and R&D costs.
Small Business Impact
The contract data does not indicate any specific provisions or subcontracting goals for small businesses. As a sole-source award to a large prime contractor, direct small business participation may be limited unless Boeing actively engages them.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny from oversight bodies to ensure the government obtained fair value. Transparency regarding the justification for sole-source procurement and cost negotiations is crucial for accountability.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Lack of competition may result in inflated prices.
- Long contract duration increases risk of cost overruns.
- Sole-source awards reduce transparency in pricing.
- Potential for vendor lock-in with specialized equipment.
Tags
aircraft-manufacturing, department-of-defense, az, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $505.8 million to THE BOEING COMPANY. QATAR PRODUCTION FOR 24 AH-64E APACHE HELICOPTERS WITH THALES RADIO
Who is the contractor on this award?
The obligated recipient is THE BOEING COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $505.8 million.
What is the period of performance?
Start: 2016-06-07. End: 2024-04-30.
What was the specific justification for awarding this contract on a sole-source basis, and were alternative solutions or vendors considered?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one source can meet the requirement. For the AH-64E Apache, Boeing is the sole manufacturer. The Army would need to document why no other platform or modification could meet the requirement, especially given the long lead time and potential for competition on certain components.
How does the per-unit cost of these Apache helicopters compare to previous procurements or similar international sales, considering the sole-source nature?
Comparing the per-unit cost is challenging without access to detailed pricing data and cost breakdowns, especially for a sole-source award. Previous procurements might offer a baseline, but inflation, technological upgrades, and specific configurations (like the Thales radio) can significantly alter costs. International sales often involve different configurations and support packages, making direct comparisons difficult.
What are the long-term cost implications and sustainment strategies associated with this significant investment in Apache helicopters?
This large procurement likely entails substantial long-term sustainment costs, including maintenance, spare parts, upgrades, and training. The government needs a clear strategy to manage these lifecycle costs effectively. Without competitive sustainment contracts or robust organic support capabilities, costs could escalate over the operational life of these aircraft.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W58RGZ15R0157
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Address: 5000 E MCDOWELL RD, 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: $1,017,326,677
Exercised Options: $505,761,602
Current Obligation: $505,761,602
Subaward Activity
Number of Subawards: 143
Total Subaward Amount: $43,466,589
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2016-06-07
Current End Date: 2024-04-30
Potential End Date: 2024-04-30 12:04:00
Last Modified: 2024-04-30
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