Boeing awarded $80.6M for AC-130U Gunship sustainment, highlighting aircraft manufacturing sector spending

Contract Overview

Contract Amount: $80,605,899 ($80.6M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2008-12-31

End Date: 2012-12-31

Contract Duration: 1,461 days

Daily Burn Rate: $55.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Defense

Official Description: AC-130U GUNSHIP SUSTAINMENT SUPPORT

Place of Performance

Location: FORT WALTON BEACH, OKALOOSA County, FLORIDA, 32548

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $80.6 million to THE BOEING COMPANY for work described as: AC-130U GUNSHIP SUSTAINMENT SUPPORT Key points: 1. Contract focuses on sustainment, crucial for maintaining operational readiness of specialized aircraft. 2. Boeing, a major defense contractor, holds significant experience in aircraft manufacturing and support. 3. The contract duration of approximately 4 years suggests a need for ongoing, long-term support. 4. Spending is concentrated in Florida, indicating a specific geographic focus for sustainment activities. 5. The 'Cost No Fee' contract type implies the government bears the cost risk, with the contractor receiving a fixed fee. 6. This award falls within the broader category of aircraft manufacturing and maintenance services.

Value Assessment

Rating: fair

Benchmarking the value of this specific sustainment contract is challenging without detailed cost breakdowns and comparisons to similar AC-130U support efforts. The 'Cost No Fee' (CNF) contract type, while common for certain types of support where cost estimation is difficult, shifts cost risk to the government. This can sometimes lead to less price discipline compared to fixed-price contracts. However, the award amount of $80.6 million over roughly four years suggests a significant investment in maintaining these specialized aircraft.

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. This competitive process is generally expected to yield better pricing and value for the government. The fact that it was competed suggests that the Air Force sought to leverage market forces to obtain the best available support for the AC-130U gunship.

Taxpayer Impact: Full and open competition is favorable for taxpayers as it typically drives down costs through market forces and encourages a wider range of potential suppliers, leading to more competitive pricing.

Public Impact

The U.S. Air Force benefits from the sustained operational readiness of its AC-130U gunship fleet. Services delivered include sustainment support, ensuring the aircraft remain functional and effective. The geographic impact is concentrated in Florida, where the sustainment activities are likely performed. This contract supports specialized roles within the Air Force, contributing to national defense capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Cost No Fee' (CNF) contract type places cost risk on the government, potentially leading to higher overall expenditures if not managed closely.
Sustainment contracts can be complex, and ensuring efficient resource allocation and cost control over the contract's duration is a continuous challenge.
Reliance on a single contractor for specialized sustainment could create vendor lock-in and limit future competitive opportunities if not carefully managed.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process that should have yielded competitive pricing.
The contract duration indicates a commitment to long-term support, providing stability for the AC-130U fleet's operational readiness.
The focus on sustainment directly supports the operational effectiveness of a critical Air Force asset.

Sector Analysis

The AC-130U Gunship Sustainment Support contract falls within the broader aerospace and defense sector, specifically the aircraft manufacturing and maintenance sub-sector. This sector is characterized by high technological complexity, significant government investment, and a limited number of large prime contractors. Spending in this area is critical for maintaining the operational readiness of military aviation assets. Comparable spending benchmarks would involve analyzing other sustainment contracts for similar specialized aircraft platforms within the Department of Defense.

Small Business Impact

While this contract was awarded to The Boeing Company, a large prime contractor, the specifics regarding small business subcontracting are not detailed in the provided data. Large defense contracts often include provisions for small business participation, and it would be important to assess whether Boeing is meeting its subcontracting goals. The impact on the small business ecosystem would depend on the extent to which Boeing engages smaller, specialized firms for support services.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. The 'Cost No Fee' (CNF) nature of the contract necessitates close monitoring of costs incurred by the contractor to ensure that the government is not overpaying. Transparency would be enhanced through regular reporting requirements and potential audits by the Defense Contract Audit Agency (DCAA) or the Inspector General.

Related Government Programs

AC-130 Gunship Program
Air Force Sustainment Contracts
Aircraft Maintenance Services
Defense Logistics Support
Aerospace Manufacturing Support

Risk Flags

Cost Risk due to CNF Contract Type
Potential for Component Obsolescence
Complexity of Specialized Systems Maintenance

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $80.6 million to THE BOEING COMPANY. AC-130U GUNSHIP SUSTAINMENT SUPPORT

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 Air Force).

What is the total obligated amount?

The obligated amount is $80.6 million.

What is the period of performance?

Start: 2008-12-31. End: 2012-12-31.

What is the historical spending trend for AC-130U Gunship sustainment support over the past decade?

Analyzing historical spending for AC-130U Gunship sustainment requires access to detailed contract databases beyond the single award provided. However, general trends in defense sustainment spending indicate a consistent need for maintaining aging fleets. Factors such as operational tempo, modernization efforts, and the overall defense budget significantly influence year-over-year expenditures. For the AC-130U, which is a specialized platform, sustainment costs are likely driven by the complexity of its systems and the need for highly skilled maintenance personnel. Without specific historical data for this contract vehicle or similar ones, it's difficult to provide precise figures, but sustainment is a perennial and significant cost driver for military aviation.

How does the 'Cost No Fee' (CNF) contract type compare to other contract types in terms of value for money for sustainment services?

The 'Cost No Fee' (CNF) contract type is generally used when the scope of work is uncertain or difficult to define precisely, making cost estimation challenging. In this structure, the government reimburses the contractor for all allowable costs incurred, plus a predetermined fixed fee. While it allows for flexibility, it shifts significant cost risk to the government. Compared to fixed-price contracts, CNF can potentially lead to higher overall costs if not rigorously managed, as there is less incentive for the contractor to control expenses beyond what is necessary to earn their fee. For sustainment services, where unforeseen issues can arise, CNF can be appropriate, but it demands robust government oversight to ensure cost efficiency and prevent overruns. Value for money is thus heavily dependent on the government's ability to monitor and control costs effectively.

What is The Boeing Company's track record in providing sustainment support for similar military aircraft platforms?

The Boeing Company has an extensive and well-established track record in providing sustainment and support services for a wide array of military aircraft platforms, including those operated by the U.S. Air Force and international allies. Their experience spans decades and covers complex platforms such as the C-17 Globemaster III, KC-46 Pegasus tanker, and various fighter and bomber aircraft. Boeing's capabilities typically include logistics, maintenance, repair, overhaul (MRO), engineering support, and supply chain management. Their long history in defense manufacturing provides them with deep institutional knowledge of aircraft systems and operational requirements. This extensive experience suggests a strong capability to fulfill the sustainment requirements for the AC-130U gunship, although the specific performance on this particular contract would require further review of performance metrics and delivery orders.

What are the key performance indicators (KPIs) typically used to assess the effectiveness of aircraft sustainment contracts?

Key Performance Indicators (KPIs) for aircraft sustainment contracts typically focus on ensuring the operational readiness and availability of the assets. Common KPIs include aircraft mission capable rates (percentage of time aircraft are available for missions), mean time between failures (MTBF), mean time to repair (MTTR), on-time delivery of parts and services, and adherence to maintenance schedules. For sustainment contracts, metrics related to cost performance, such as cost variance against budget and cost efficiency, are also crucial. Additionally, contractor performance metrics like responsiveness to issues, quality of work, and compliance with safety and technical standards are evaluated. Effective sustainment ensures that the aircraft meet their intended operational requirements reliably and cost-effectively.

Are there any known risks associated with the AC-130U Gunship platform itself that could impact sustainment costs or performance?

The AC-130U 'Spooky' Gunship is a highly specialized variant of the C-130 Hercules, designed for close air support and interdiction missions. As an aging platform, inherent risks associated with its sustainment include the potential for increased component obsolescence, requiring costly redesigns or the sourcing of rare parts. The complexity of its unique weapon systems (e.g., 105mm cannon, 40mm cannon, 25mm Gatling gun) and associated fire control systems can also lead to higher maintenance demands and specialized training requirements for technicians. Furthermore, the operational tempo and mission profile of such platforms can lead to higher wear and tear, potentially increasing the frequency and cost of repairs. Managing these risks requires proactive obsolescence management, robust engineering support, and efficient supply chain strategies.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Address: 626 ANCHORS ST NW, FORT WALTON BEACH, FL, 32548

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $91,101,431

Exercised Options: $91,101,431

Current Obligation: $80,605,899

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA853008D0004

IDV Type: IDC

Timeline