DoD Awards Boeing $85.5M for B-52 Software Upgrades, Raising Concerns Over Competition
Contract Overview
Contract Amount: $85,472,918 ($85.5M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2018-06-01
End Date: 2020-06-30
Contract Duration: 760 days
Daily Burn Rate: $112.5K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: B-52 SOFTWARE BLOCK 06_07_08
Place of Performance
Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135
State: Oklahoma Government Spending
Plain-Language Summary
Department of Defense obligated $85.5 million to THE BOEING COMPANY for work described as: B-52 SOFTWARE BLOCK 06_07_08 Key points: 1. Significant contract value for aircraft software modernization. 2. Sole-source award to Boeing limits competitive pricing. 3. Potential for cost overruns with Cost Plus Fixed Fee contract type. 4. Focus on critical aircraft sustainment within the Defense sector.
Value Assessment
Rating: questionable
The $85.5 million award for B-52 software upgrades is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential market alternatives for similar complex software development.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis to The Boeing Company. This lack of competition likely resulted in higher prices and reduced opportunities for innovative solutions from other vendors.
Taxpayer Impact: The sole-source nature of this award means taxpayers may have paid a premium for these software upgrades, as competitive pressures that typically drive down costs were absent.
Public Impact
Modernization of a key strategic bomber fleet ensures continued operational readiness. Potential for extended service life of the B-52 aircraft through software enhancements. Impacts the technological capabilities of the U.S. Air Force's strategic deterrent.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- Cost Plus Fixed Fee contract type can lead to cost overruns.
- Lack of clear performance metrics in provided data.
Positive Signals
- Essential upgrade for a critical strategic asset.
- Award to incumbent contractor ensures continuity.
- Addresses necessary modernization for aging aircraft.
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, specifically focusing on software development for a major defense platform. Spending benchmarks for such specialized software upgrades are highly variable, but significant investments are common for maintaining aging military hardware.
Small Business Impact
The contract was awarded directly to The Boeing Company, a large aerospace manufacturer. There is no indication of subcontracting opportunities for small businesses in the provided data, suggesting limited direct impact on the small business sector for this specific award.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny from oversight bodies to ensure the price paid was fair and reasonable. Further review of the contract's performance and cost tracking would be beneficial for accountability.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Lack of competition
- Potential for cost overruns
- Limited transparency on price justification
Tags
aircraft-manufacturing, department-of-defense, ok, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $85.5 million to THE BOEING COMPANY. B-52 SOFTWARE BLOCK 06_07_08
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 $85.5 million.
What is the period of performance?
Start: 2018-06-01. End: 2020-06-30.
What was the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure a fair and reasonable price?
The justification for a sole-source award typically involves unique capabilities or proprietary technology held by the incumbent contractor. To ensure a fair and reasonable price, the government usually conducts a price analysis based on historical data, cost estimates, or comparisons to similar, albeit not identical, contracts. However, without competitive proposals, the inherent price discovery mechanism is absent, making robust justification and analysis critical.
What are the potential risks associated with a Cost Plus Fixed Fee (CPFF) contract for complex software development, and how are they mitigated?
CPFF contracts carry risks of cost overruns as the contractor is reimbursed for allowable costs plus a fixed fee. This can incentivize higher spending if not closely monitored. Mitigation strategies include stringent cost controls, detailed performance metrics, regular audits, and clear definition of work scope to prevent scope creep. The government must actively manage the contract to ensure efficiency and prevent contractor inefficiencies from inflating costs.
How does this software upgrade contribute to the overall effectiveness and longevity of the B-52 bomber fleet?
This software upgrade is crucial for maintaining the operational effectiveness and extending the service life of the B-52 fleet, which is a cornerstone of the U.S. strategic deterrent. Modern software can enhance navigation, targeting, communication, and electronic warfare capabilities, ensuring the aircraft can operate within evolving threat environments and integrate with newer systems. Without such upgrades, the platform's utility would diminish over time.
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: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 6001 S AIR DEPOT BLVD, OKLAHOMA CITY, OK, 73135
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $85,472,918
Exercised Options: $85,472,918
Current Obligation: $85,472,918
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $165,825
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA810709D0001
IDV Type: IDC
Timeline
Start Date: 2018-06-01
Current End Date: 2020-06-30
Potential End Date: 2020-06-30 00:00:00
Last Modified: 2020-04-03
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