Air Force awards $35.4M for KC-135 programmed depot maintenance to Boeing

Contract Overview

Contract Amount: $35,383,148 ($35.4M)

Contractor: Boeing Aerospace Operations, Inc.

Awarding Agency: Department of Defense

Start Date: 2013-04-10

End Date: 2016-09-30

Contract Duration: 1,269 days

Daily Burn Rate: $27.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::CL,CT::IGF KC-135 PROGRAMMED DEPOT MAINTENANCE

Place of Performance

Location: SAN ANTONIO, BEXAR County, TEXAS, 78226, UNITED STATES OF AMERICA

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $35.4 million to BOEING AEROSPACE OPERATIONS, INC. for work described as: IGF::CL,CT::IGF KC-135 PROGRAMMED DEPOT MAINTENANCE Key points: 1. Contract value represents a significant investment in maintaining the aging KC-135 fleet. 2. Sole awardee suggests potential for limited competition or specialized capabilities required. 3. Firm Fixed Price contract type shifts cost risk to the contractor. 4. Contract duration of over three years indicates a substantial maintenance requirement. 5. Geographic location in Texas may offer logistical advantages for depot operations. 6. This award is part of ongoing efforts to sustain critical Air Force assets.

Value Assessment

Rating: fair

The contract value of $35.4 million for programmed depot maintenance on KC-135 aircraft appears reasonable given the scope of work. However, without specific details on the number of aircraft serviced or the extent of maintenance performed, a precise value-for-money assessment is challenging. Benchmarking against similar depot maintenance contracts for large aircraft fleets would provide a clearer picture of cost-effectiveness. The firm-fixed-price structure aims to control costs, but the ultimate value depends on the contractor's efficiency and the actual maintenance needs identified.

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 were likely solicited. The presence of 3 bidders suggests a moderate level of competition for this specialized service. While not a sole-source award, the limited number of bidders could imply that only a few companies possess the necessary technical expertise and facilities for KC-135 programmed depot maintenance. This level of competition may have influenced pricing, but further analysis of the proposals would be needed to confirm.

Taxpayer Impact: A competitive bidding process, even with a few bidders, generally benefits taxpayers by encouraging more favorable pricing and service terms compared to a sole-source situation.

Public Impact

The primary beneficiaries are the U.S. Air Force and its operational readiness, ensuring the KC-135 fleet remains airworthy. Services delivered include essential programmed depot maintenance, crucial for extending the lifespan of aging aircraft. The geographic impact is centered around the contractor's facility in Texas, potentially creating or sustaining local jobs. Workforce implications include skilled technicians and support staff required for complex aircraft maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen maintenance issues arise beyond the scope of the fixed-price contract.
Dependence on a single contractor for critical maintenance could lead to supply chain vulnerabilities.
Aging KC-135 fleet may present unique maintenance challenges not fully captured in initial cost estimates.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor, promoting cost control.
Full and open competition, even with limited bidders, suggests an effort to secure competitive pricing.
Award to a known aerospace entity like Boeing implies established capabilities and experience.

Sector Analysis

The aerospace and defense industry is characterized by high barriers to entry, specialized technical requirements, and significant government investment. Programmed depot maintenance for strategic aircraft like the KC-135 is a niche but critical segment. Spending in this area is driven by the need to sustain aging fleets, often involving complex overhauls and upgrades. Comparable spending benchmarks would typically involve other large-scale aircraft maintenance contracts, which can range from tens to hundreds of millions of dollars depending on the aircraft type and scope of work.

Small Business Impact

This contract was awarded under full and open competition and does not appear to have a specific small business set-aside. While Boeing is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors, particularly in specialized areas of maintenance or parts supply. The extent of small business subcontracting would depend on Boeing's procurement strategy and the availability of qualified small business vendors.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. The firm-fixed-price nature of the contract implies that performance standards and deliverables are clearly defined. Accountability measures would include adherence to maintenance schedules, quality control processes, and compliance with technical specifications. Transparency is generally maintained through contract award announcements and reporting requirements, though detailed performance metrics may not always be publicly disclosed.

Related Government Programs

KC-135 Stratotanker Sustainment Programs
Air Mobility Command Aircraft Maintenance
Department of Defense Depot Maintenance Contracts
Aerospace Manufacturing and Maintenance Services

Risk Flags

Potential for cost growth if unforeseen maintenance issues arise.
Dependence on contractor's ability to manage complex supply chains for parts.
Risk of schedule delays impacting fleet readiness.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.4 million to BOEING AEROSPACE OPERATIONS, INC.. IGF::CL,CT::IGF KC-135 PROGRAMMED DEPOT MAINTENANCE

Who is the contractor on this award?

The obligated recipient is BOEING AEROSPACE OPERATIONS, INC..

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 $35.4 million.

What is the period of performance?

Start: 2013-04-10. End: 2016-09-30.

What is the historical spending trend for KC-135 programmed depot maintenance?

Analyzing historical spending for KC-135 programmed depot maintenance requires accessing detailed contract databases and budget reports over several fiscal years. Typically, such maintenance is awarded periodically, reflecting the lifecycle of the aircraft and the need for major overhauls. Spending can fluctuate based on the number of aircraft undergoing maintenance in a given period, the specific maintenance tasks required (e.g., routine checks versus major structural repairs), and the competitive landscape for these services. For instance, if the Air Force has been extending the service life of the KC-135 fleet, spending on depot maintenance might show a consistent or even increasing trend over time as aircraft age and require more intensive upkeep. Conversely, if new aircraft are being introduced or older ones retired, spending could decrease. Without specific historical data for this contract vehicle or similar ones, it's difficult to provide precise figures, but it's reasonable to assume multi-million dollar annual expenditures for a fleet of this size and age.

How does the awarded price compare to industry benchmarks for similar aircraft depot maintenance?

Benchmarking this $35.4 million contract against industry standards for similar aircraft depot maintenance is challenging without more granular data on the scope of work. Factors such as the specific aircraft model (KC-135 variants), the number of aircraft serviced, the depth of maintenance (e.g., scheduled inspections, component replacements, structural repairs, modifications), and the labor and material costs in the contractor's region significantly influence pricing. Generally, programmed depot maintenance for large, complex military aircraft can range from several million to tens of millions of dollars per aircraft, depending on the extent of work. A contract covering multiple aircraft over several years, like this one, would naturally be substantial. To perform a robust comparison, one would need data on the average cost per aircraft for KC-135 PDM, or comparable maintenance costs for other tanker or strategic airlift aircraft, adjusted for inflation and specific service requirements.

What are the key performance indicators (KPIs) used to evaluate contractor performance on this contract?

Key Performance Indicators (KPIs) for a contract like this typically focus on ensuring the aircraft are returned to service on time, within budget (as defined by the firm-fixed-price), and to the required airworthiness standards. Specific KPIs might include: On-Time Delivery Rate (percentage of aircraft completed by the scheduled date), Quality Acceptance Rate (percentage of maintenance tasks meeting quality standards without rework), Adherence to Technical Orders (compliance with all specified maintenance procedures), Cost Performance (managing costs within the fixed price, though less critical for the government in FFP), and Safety Performance (tracking and minimizing safety incidents during maintenance operations). The Air Force would monitor these KPIs through regular progress meetings, inspections of work performed, and review of contractor-submitted reports. Failure to meet critical KPIs could result in contractually defined remedies or impact future contract awards.

What is Boeing's track record with KC-135 maintenance and similar large aircraft sustainment contracts?

Boeing has a long and extensive history with the KC-135 Stratotanker, having been the original manufacturer. This deep institutional knowledge provides a significant advantage in performing programmed depot maintenance. Boeing has consistently been awarded contracts for sustainment, modification, and maintenance of various KC-135 configurations throughout the aircraft's operational life. Their track record includes managing complex maintenance programs for other large military aircraft platforms, such as the B-52, C-17, and various fighter and bomber aircraft. While specific performance details on individual contracts are often proprietary, Boeing's continued selection for critical sustainment work by the Department of Defense suggests a generally positive track record in terms of technical capability, program management, and meeting delivery schedules for large, complex aerospace programs.

Are there any identified risks associated with the contractor or the nature of the work?

Risks associated with this contract can be categorized. From the contractor's perspective (Boeing), the primary risk is underestimating the labor and material costs required for the programmed depot maintenance within the firm-fixed-price structure. Unexpected findings during maintenance, such as hidden structural damage or obsolescence of parts, could lead to cost overruns for Boeing. For the government, risks include potential delays in aircraft return-to-service if the contractor encounters significant issues, and the possibility that the maintenance performed may not fully address long-term fleet readiness if unforeseen technological or operational requirements emerge. The aging nature of the KC-135 fleet itself presents inherent risks, as older aircraft are generally more prone to maintenance challenges and require specialized expertise, which could strain even experienced contractors.

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: 375 AIRLIFT DR SECOND FL C43, SAN ANTONIO, TX, 78226

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $35,383,148

Exercised Options: $35,383,148

Current Obligation: $35,383,148

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA810507D0002

IDV Type: IDC

Timeline