Boeing awarded $256M contract for B-52 sustainment, engineering services by Air Force

Contract Overview

Contract Amount: $25,586,579 ($25.6M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2018-09-24

End Date: 2025-05-12

Contract Duration: 2,422 days

Daily Burn Rate: $10.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: B-52 FLEXIBLE ACQUISITION SUSTAINMENT, ENGINEERING SERVICES

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $25.6 million to THE BOEING COMPANY for work described as: B-52 FLEXIBLE ACQUISITION SUSTAINMENT, ENGINEERING SERVICES Key points: 1. Contract awarded to a single, large defense contractor, raising questions about competition. 2. Long-term contract duration suggests a need for sustained support for the B-52 fleet. 3. Firm Fixed Price contract type aims to control costs, but requires careful scope management. 4. Focus on sustainment and engineering indicates critical support for aging aircraft. 5. No small business set-aside noted, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: fair

The contract value of $255.9 million over approximately 6.7 years (2422 days) for B-52 sustainment and engineering services appears substantial. Benchmarking this against similar long-term sustainment contracts for aging aircraft fleets is challenging without more specific service details. However, the firm fixed-price nature suggests an attempt to cap costs. The lack of competition, however, makes a direct value-for-money assessment difficult, as there's no market-driven price discovery.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities or when urgency dictates. The lack of competition means that the Air Force did not benefit from a bidding process that could have driven down prices through market forces. The justification for this sole-source award would be critical to understanding its necessity.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to ensure the lowest possible price. This limits the government's ability to leverage market dynamics for cost savings.

Public Impact

The primary beneficiaries are the U.S. Air Force and its B-52 bomber fleet, ensuring operational readiness. Services delivered include sustainment and engineering support, crucial for maintaining aging aircraft. Geographic impact is likely concentrated around B-52 operating bases and Boeing's support facilities. Workforce implications include continued employment for engineers and technicians at Boeing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Long contract duration without clear performance metrics could lead to cost overruns if not managed tightly.
Reliance on a single contractor for critical sustainment may pose supply chain or innovation risks.
Lack of small business involvement may limit broader economic participation and diverse solutions.

Positive Signals

Firm Fixed Price contract type provides cost certainty if scope is well-defined.
Boeing's established role as the original manufacturer likely ensures deep technical knowledge.
Sustained engineering support is vital for the continued operational capability of a strategic asset like the B-52.

Sector Analysis

The aerospace and defense sector is characterized by long-term, high-value contracts, often involving complex engineering and sustainment services for specialized platforms. The B-52 bomber is a strategic asset with a long service life, necessitating ongoing support. Spending in this area is critical for national security and maintaining fleet readiness. Comparable spending benchmarks would typically involve other major aircraft sustainment programs, which are often sole-sourced due to the specialized nature of the aircraft and the original equipment manufacturer's role.

Small Business Impact

This contract does not appear to include a small business set-aside. As a sole-source award to a large prime contractor, it limits direct opportunities for small businesses to participate as prime contractors. Subcontracting opportunities may exist, but their extent and nature are not detailed in the provided data. The impact on the small business ecosystem is likely minimal in terms of direct prime contract awards for this specific vehicle.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures would be defined within the contract's terms and conditions, including performance standards and payment schedules. Transparency may be limited due to the sole-source nature, but contract awards are generally reported. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse.

Related Government Programs

B-52 Bomber Modernization Programs
Air Force Aircraft Sustainment Contracts
Defense Logistics Agency Support Services
Aerospace Engineering Services Contracts

Risk Flags

Sole-source award
Long-term contract duration
Potential for cost escalation without competition
Reliance on a single contractor for critical asset sustainment

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.6 million to THE BOEING COMPANY. B-52 FLEXIBLE ACQUISITION SUSTAINMENT, ENGINEERING SERVICES

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 $25.6 million.

What is the period of performance?

Start: 2018-09-24. End: 2025-05-12.

What is Boeing's track record with B-52 sustainment and similar long-term defense contracts?

Boeing, as the original manufacturer of the B-52, has a long-standing relationship with the aircraft and its sustainment. Their track record with the B-52 likely includes numerous previous sustainment and upgrade contracts. Generally, large defense contractors like Boeing have extensive experience managing complex, long-term programs. However, performance can vary, and specific contract histories, including any past issues with cost overruns, schedule delays, or quality problems on similar programs, would require a deeper dive into contract performance reports and historical data. Their overall reputation in the defense sector is that of a major, capable provider, but like any large entity, they have faced scrutiny on specific projects.

How does the $255.9 million contract value compare to historical spending on B-52 sustainment?

Directly comparing the $255.9 million figure to historical spending requires access to detailed historical contract data for the B-52 program. This contract covers a period of approximately 6.7 years. To assess if this represents an increase or decrease in annual spending, one would need to know the average annual expenditure for B-52 sustainment and engineering services in previous years. Factors such as inflation, the scope of services required (e.g., major overhauls vs. routine maintenance), and fleet size changes would influence historical spending patterns. Without this comparative data, it's difficult to definitively state whether this contract represents value for money relative to the past.

What are the primary risks associated with a sole-source contract for critical aircraft sustainment?

The primary risks associated with a sole-source contract for critical aircraft sustainment include a lack of competitive pricing, potentially leading to higher costs for the government and taxpayers. There is also a reduced incentive for the contractor to innovate or improve efficiency, as there is no direct competition. Furthermore, the government becomes highly dependent on a single supplier, which can create vulnerabilities in the supply chain, increase risks during geopolitical instability, and limit flexibility if the contractor's performance declines or their business strategy changes. The absence of market-driven price discovery makes it harder to ensure optimal value for money.

How effective is the Firm Fixed Price (FFP) contract type in managing costs for long-term sustainment services?

The Firm Fixed Price (FFP) contract type is generally considered effective for managing costs in long-term sustainment services, provided the scope of work is well-defined and stable. It shifts the risk of cost overruns to the contractor, offering price certainty to the government. However, for complex sustainment requiring extensive engineering and potential unforeseen issues, an FFP contract can incentivize the contractor to cut corners on quality or scope to protect their profit margin if costs escalate. Conversely, if the scope is underestimated by the government, the contractor may seek change orders, increasing costs. Effective management and clear SOW are crucial for FFP success in sustainment.

What are the potential performance implications of awarding this contract to The Boeing Company without competition?

Awarding this contract to The Boeing Company without competition means the Air Force is relying on Boeing's established capabilities and historical performance with the B-52. The potential performance implications are mixed. On the positive side, Boeing possesses deep institutional knowledge of the B-52 platform, potentially leading to efficient and effective sustainment. However, the lack of competition removes the external pressure that typically drives contractors to optimize performance and service delivery to maintain market share. This could lead to complacency or less aggressive efforts to improve processes or reduce turnaround times compared to a competitive scenario. The government's oversight and performance management become even more critical.

Are there specific performance metrics or Key Performance Indicators (KPIs) associated with this contract to ensure accountability?

The provided data does not specify the performance metrics or Key Performance Indicators (KPIs) associated with this contract. Typically, long-term sustainment contracts include detailed performance standards related to aircraft availability, response times for engineering support, quality of repairs, and adherence to schedules. These KPIs are crucial for the government to monitor contractor performance and hold them accountable. Without knowing these specific metrics, it is difficult to assess the robustness of the accountability framework. The contract's terms and conditions, along with associated performance work statements, would contain this information.

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: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $25,599,479

Exercised Options: $25,599,479

Current Obligation: $25,586,579

Subaward Activity

Number of Subawards: 16

Total Subaward Amount: $1,874,533

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA862810D1000

IDV Type: IDC

Timeline