Boeing awarded $64.7M for AC-130U Gunship sustainment, supporting critical aircraft manufacturing in Florida

Contract Overview

Contract Amount: $64,704,936 ($64.7M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2013-01-01

End Date: 2015-12-31

Contract Duration: 1,094 days

Daily Burn Rate: $59.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED 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 $64.7 million to THE BOEING COMPANY for work described as: AC-130U GUNSHIP SUSTAINMENT SUPPORT Key points: 1. Contract focuses on sustainment, indicating a need for ongoing support for existing platforms. 2. The award to a single, large contractor suggests a mature market for this specialized support. 3. Long-term sustainment contracts can present risks if not managed for cost efficiency. 4. This contract falls within the broader defense sector's spending on aircraft maintenance and upgrades. 5. The fixed-fee structure aims to control costs while ensuring necessary services are rendered. 6. Sustainment spending is crucial for maintaining operational readiness of legacy aircraft.

Value Assessment

Rating: good

The contract value of $64.7 million for a two-year period appears reasonable for specialized aircraft sustainment. Benchmarking against similar sustainment contracts for large military aircraft is difficult without more specific service details. However, the fixed-fee structure suggests an effort to manage costs effectively. The award to a prime contractor with extensive experience in this aircraft type likely contributes to value by leveraging existing expertise and infrastructure.

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 compete. The specific number of bidders is not provided, but full and open competition generally fosters a competitive environment that can lead to better pricing and terms for the government. This approach allows the government to seek the best value from the widest possible range of qualified sources.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it drives down costs through market forces and ensures the government is not locked into a single provider, potentially leading to more efficient use of public funds.

Public Impact

The primary beneficiaries are the U.S. Air Force units operating the AC-130U Gunship, ensuring their aircraft remain mission-capable. Services delivered include sustainment support, likely encompassing maintenance, repair, and technical assistance for the aircraft. The geographic impact is primarily in Florida, where the contractor is located and potentially where the aircraft are based or serviced. Workforce implications include employment for skilled technicians, engineers, and support staff at The Boeing Company and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if sustainment needs are underestimated or unforeseen issues arise.
Dependence on a single large contractor could limit flexibility in future support arrangements.
Ensuring continued technological relevance of sustainment practices for an aging airframe.

Positive Signals

Awarded through full and open competition, suggesting competitive pricing.
Contractor has established expertise with the AC-130U platform.
Fixed-fee structure provides a degree of cost certainty for the government.
Sustainment focus ensures continued operational readiness of a critical asset.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft sustainment. The market for specialized military aircraft support is often dominated by a few large, experienced prime contractors. Spending on sustainment is a significant portion of the defense budget, essential for maintaining the readiness of aging fleets. Comparable spending benchmarks would typically involve analyzing other sustainment contracts for similar large, complex military aircraft.

Small Business Impact

The contract does not indicate any specific small business set-aside provisions. As a large prime contract awarded to The Boeing Company, it is likely that any small business participation would occur through subcontracting opportunities. The extent of small business involvement would depend on Boeing's subcontracting plan and the availability of small businesses capable of providing specialized parts or services.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Defense's contract management agencies, such as the Defense Contract Management Agency (DCMA). Accountability measures are embedded in the contract's performance requirements and payment terms. Transparency is generally maintained through contract award databases and reporting requirements, though specific operational details may be sensitive.

Related Government Programs

AC-130 Gunship Program
Air Force Materiel Command
Aircraft Maintenance and Repair Services
Defense Logistics Agency

Risk Flags

Potential for cost creep in sustainment contracts.
Aging aircraft require ongoing, potentially increasing, maintenance.
Dependence on a single prime contractor for specialized support.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $64.7 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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $64.7 million.

What is the period of performance?

Start: 2013-01-01. End: 2015-12-31.

What is the historical spending trend for AC-130U Gunship sustainment support by the Department of Defense?

Analyzing historical spending on AC-130U Gunship sustainment requires accessing detailed contract databases over multiple fiscal years. While this specific $64.7 million award covers a defined period (2013-2015), the overall trend for sustainment of this platform likely reflects a consistent need for maintenance, parts, and technical support as the aircraft age. Historically, sustainment costs for complex military platforms tend to increase over time due to wear and tear, obsolescence of components, and the need for specialized labor. The Department of Defense often awards multiple contracts for sustainment, including sustainment, repair, and upgrade services, to various contractors or divisions of larger companies. Without access to a comprehensive historical database for this specific aircraft variant, it's challenging to provide precise year-over-year spending figures. However, it's reasonable to infer that sustainment spending has been a significant and ongoing expenditure to maintain the operational readiness of the AC-130U fleet.

How does the cost per operational hour for the AC-130U compare to other gunship variants or similar support aircraft?

Determining the precise cost per operational hour for the AC-130U requires detailed data on total operating costs (including fuel, maintenance, personnel, and sustainment) divided by total flight hours. This information is often considered sensitive and not readily available in public contract award data. However, AC-130 variants, particularly older ones like the U model, are known to be expensive to operate and maintain due to their specialized nature, complex systems, and aging airframes. Compared to more modern, multi-mission aircraft, the cost per hour for dedicated gunships like the AC-130U is generally higher. Benchmarking against other AC-130 variants (e.g., AC-130J Ghostrider) would also be complex, as newer models may have different sustainment needs and potentially higher initial acquisition costs but possibly lower per-hour operating costs due to improved efficiency or technology. Publicly available data often focuses on contract awards rather than granular operational cost metrics.

What are the key performance indicators (KPIs) used to evaluate The Boeing Company's performance under this sustainment contract?

While the specific KPIs for this contract are not detailed in the award notice, typical performance indicators for aircraft sustainment contracts include metrics related to aircraft availability, mission capable rates, turnaround time for repairs, quality of maintenance performed, and adherence to delivery schedules for parts and services. For a fixed-fee contract, meeting these performance standards is crucial for the contractor to receive full payment. The government (likely through DCMA) would monitor these KPIs closely. Failure to meet critical performance thresholds could result in penalties, reduced payments, or corrective action plans. The objective is to ensure the AC-130U fleet remains operationally ready and that maintenance activities are conducted efficiently and effectively, minimizing downtime and maximizing mission capability.

What is the risk associated with relying on The Boeing Company for long-term sustainment of the AC-130U fleet?

The primary risk associated with relying on a single contractor like The Boeing Company for long-term sustainment of a specialized platform like the AC-130U is potential vendor lock-in and reduced negotiating leverage for future contracts. If Boeing is the sole provider of critical parts, technical expertise, or specialized maintenance, the government may face higher costs over time. Another risk involves potential complacency or reduced innovation if competition is limited in subsequent contract phases. However, Boeing's long-standing relationship with the U.S. military and its deep knowledge of the AC-130 platform also represent a significant positive, ensuring continuity and expertise. Mitigating these risks often involves robust contract management, periodic re-competition of sustainment services, and encouraging competitive sourcing for parts and repairs where feasible.

How does this contract contribute to the overall readiness and operational capability of the U.S. Air Force's AC-130U fleet?

This sustainment support contract is critical for maintaining the operational readiness and capability of the AC-130U Gunship fleet. The AC-130U is a specialized close air support and interdiction aircraft, and its effectiveness relies heavily on its airworthiness and system functionality. Sustainment activities, which likely include scheduled maintenance, unscheduled repairs, component replacements, and technical support, directly address the wear and tear on the aircraft. By ensuring that the AC-130Us are properly maintained and repaired, this contract enables the Air Force to deploy these aircraft effectively for their intended missions, providing vital fire support and battlefield interdiction capabilities. Without such dedicated sustainment, the operational availability and reliability of the fleet would significantly degrade, impacting the Air Force's ability to project power and support ground forces.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

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: $100,070,854

Exercised Options: $100,070,854

Current Obligation: $64,704,936

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA853008D0004

IDV Type: IDC

Timeline