Boeing awarded $36.8M for E-4B aircraft integrated support, a sole-source contract

Contract Overview

Contract Amount: $36,765,817 ($36.8M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2015-06-01

End Date: 2019-09-30

Contract Duration: 1,582 days

Daily Burn Rate: $23.2K/day

Competition Type: NOT COMPETED

Pricing Type: COST NO FEE

Sector: Defense

Official Description: IGF::CT::IGF PRODUCT SERVICE INTEGRATED SUPPORT FOR THE E-4B AIRCRAFT PLATFORM

Place of Performance

Location: FORT LAUDERDALE, BROWARD County, FLORIDA, 33315

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $36.8 million to THE BOEING COMPANY for work described as: IGF::CT::IGF PRODUCT SERVICE INTEGRATED SUPPORT FOR THE E-4B AIRCRAFT PLATFORM Key points: 1. Contract awarded to a single, established provider, raising questions about price competitiveness. 2. Limited competition suggests potential for higher costs compared to a more open bidding process. 3. Long-term support for a critical aircraft platform indicates strategic importance. 4. Performance period spans over four years, requiring sustained oversight. 5. Contract falls within the defense sector, specifically supporting specialized aircraft. 6. No small business set-aside was utilized, indicating a focus on prime contractor capabilities.

Value Assessment

Rating: fair

The contract value of $36.8 million for integrated support of the E-4B aircraft platform appears to be within a reasonable range for specialized defense systems. However, without direct comparable contracts for similar integrated support services on comparable platforms, a precise value-for-money assessment is challenging. The 'Cost No Fee' (Cost Plus Fixed Fee) contract type suggests that the government bears the cost of performance, with the contractor receiving a fixed fee, which can sometimes lead to less incentive for cost control compared to fixed-price contracts. Benchmarking against industry standards for aircraft sustainment would be necessary for a more definitive evaluation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, The Boeing Company, was solicited. This approach is typically used when a specific vendor possesses unique capabilities, proprietary technology, or is the sole manufacturer of the required system. While it ensures access to specialized expertise for the E-4B, it bypasses the competitive bidding process, which could potentially lead to higher prices and less innovation compared to a fully competed contract. The lack of competition limits the government's ability to leverage market forces for cost savings.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the price reductions that can arise from competitive bidding. This can result in higher overall expenditure for the required services.

Public Impact

The primary beneficiaries are the U.S. Air Force and Department of Defense, ensuring the operational readiness of the E-4B aircraft. Services delivered include integrated support, likely encompassing maintenance, repair, logistics, and technical assistance for the E-4B platform. The geographic impact is national, as the E-4B is a strategic asset with potential deployment across various locations. Workforce implications include the employment of skilled technicians, engineers, and support staff at Boeing and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially impacting cost-effectiveness.
Cost-plus contract type may reduce contractor incentive for stringent cost control.
Reliance on a single contractor for critical aircraft support poses a long-term dependency risk.

Positive Signals

Award to The Boeing Company, a known and experienced defense contractor, suggests a high likelihood of technical competence.
Integrated support contract ensures comprehensive sustainment for a complex and vital aircraft platform.
Long-term contract duration (over 4 years) provides stability for critical defense operations.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex technological requirements, and significant government investment. Contracts for specialized aircraft support, like that for the E-4B, are often awarded to original equipment manufacturers or highly specialized firms due to the unique nature of the systems. The market for such integrated support services is relatively concentrated, with a few large prime contractors dominating. Spending in this area is driven by national security needs and the lifecycle management of aging but critical defense assets.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor, The Boeing Company, is a large aerospace firm. While Boeing may utilize small businesses as subcontractors, the primary award is not directed towards small business participation. This suggests that the specific nature of the integrated support required for the E-4B platform necessitates the capabilities of a large, established prime contractor, potentially limiting direct opportunities for small businesses in this specific contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management structures, likely involving the Defense Contract Management Agency (DCMA) given the 'sa' field. Accountability measures would be defined by the contract terms, including performance metrics, reporting requirements, and potential penalties for non-compliance. Transparency is generally limited for sole-source defense contracts, though contract awards are publicly reported. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

E-4B National Airborne Operations Center Program
Aircraft Maintenance and Repair Services
Defense Logistics Support Contracts
Specialized Aircraft Systems Support

Risk Flags

Sole-source award
Cost-plus contract type
Critical infrastructure support

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.8 million to THE BOEING COMPANY. IGF::CT::IGF PRODUCT SERVICE INTEGRATED SUPPORT FOR THE E-4B AIRCRAFT PLATFORM

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 $36.8 million.

What is the period of performance?

Start: 2015-06-01. End: 2019-09-30.

What is the historical spending trend for integrated support of the E-4B aircraft platform?

Analyzing historical spending for the E-4B aircraft platform's integrated support is crucial for understanding cost trends and identifying potential anomalies. While the provided data point represents a single contract award of approximately $36.8 million from June 2015 to September 2019, it is part of a larger sustainment effort. Comprehensive historical data would involve examining previous contracts for E-4B support, including sustainment, maintenance, and upgrade services, over several years or even decades. This would reveal whether spending has been consistent, increasing, or decreasing, and whether the current contract value aligns with past expenditures. Without access to a broader dataset of prior E-4B support contracts, it is difficult to establish a definitive spending trend or benchmark the current award against historical norms. Factors such as inflation, evolving operational requirements, and technological obsolescence can all influence year-over-year spending.

How does the 'Cost No Fee' (Cost Plus Fixed Fee) contract type impact contractor incentives for cost efficiency on this E-4B support contract?

The 'Cost No Fee' (Cost Plus Fixed Fee - CPFF) contract type, as indicated for this E-4B support contract, has specific implications for contractor incentives regarding cost efficiency. In a CPFF arrangement, the contractor is reimbursed for all allowable costs incurred during performance, plus a predetermined fixed fee representing profit. The 'No Fee' aspect in this context likely refers to the fee structure itself being fixed, rather than a complete absence of profit. This structure shifts the primary financial risk from the contractor to the government. While the contractor is motivated to complete the work to earn their fixed fee, they have less direct financial incentive to minimize costs compared to a fixed-price contract, where savings directly increase their profit margin. The government bears the brunt of cost overruns. Effective oversight and robust cost-tracking mechanisms are therefore critical to ensure that costs remain reasonable and that the contractor operates efficiently within the scope of the contract.

What are the specific risks associated with relying on a sole-source provider for critical aircraft platform support like the E-4B?

Relying on a sole-source provider for critical aircraft platform support, such as The Boeing Company for the E-4B, introduces several significant risks. Firstly, there is a lack of competitive pressure, which can lead to inflated prices and reduced incentives for innovation or efficiency. The government has limited leverage to negotiate better terms or pricing. Secondly, there is a risk of vendor lock-in; the specialized knowledge and proprietary data held by the sole provider can make it extremely difficult and costly to switch to another vendor in the future, even if performance or pricing becomes unsatisfactory. Thirdly, the sole provider's financial health or strategic priorities could impact the continuity of support. If the provider faces financial difficulties or decides to exit the market segment, the government could face severe disruptions in maintaining the critical E-4B platform. Finally, sole-source awards can sometimes be perceived as less transparent, potentially raising concerns about fairness and value for taxpayer money.

What is the track record of The Boeing Company in providing integrated support for complex military aircraft platforms?

The Boeing Company has an extensive and well-established track record in providing integrated support services for a wide array of complex military aircraft platforms. As a major defense contractor and the original manufacturer of many aircraft, Boeing possesses deep institutional knowledge, engineering expertise, and logistical capabilities required for sustainment. Their experience spans numerous programs, including fighters, bombers, transport aircraft, and specialized platforms similar in complexity to the E-4B. This includes providing services such as maintenance, repair and overhaul (MRO), supply chain management, technical publications, training, and system upgrades. While specific performance metrics for individual contracts are often proprietary, Boeing's continued success in securing and executing large, long-term support contracts with various military branches globally indicates a generally strong performance history and a high level of trust from its government customers regarding their ability to maintain operational readiness for critical assets.

How does the contract's duration and value compare to typical sustainment contracts for similar strategic aircraft?

The contract duration of approximately 4 years (June 2015 - September 2019) and a value of $36.8 million for integrated support of the E-4B aircraft platform provides a basis for comparison, though direct parallels are challenging due to the E-4B's unique role and limited fleet size. Sustainment contracts for strategic aircraft can vary widely in duration, often ranging from 1 to 5 years for specific service blocks, or longer if encompassing comprehensive lifecycle support. Values can range from tens of millions to billions of dollars, depending on the aircraft type, fleet size, scope of services (e.g., depot maintenance, component repair, logistics, engineering support), and contract type. For a specialized, high-value platform like the E-4B, which serves a critical command and control function, a contract of this magnitude and duration appears consistent with the ongoing need for expert maintenance and operational readiness. However, without knowing the specific services included and comparing it to contracts for other similarly critical but perhaps more numerous platforms (e.g., strategic bombers or tankers), a precise benchmarking is difficult.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Address: 6001 S AIR DEPOT BLVD, OKLAHOMA CITY, OK, 73135

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $36,765,817

Exercised Options: $36,765,817

Current Obligation: $36,765,817

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA810606D0001

IDV Type: IDC

Timeline