DoD awards $30.8M to Boeing for B-52 engine risk reduction, facing limited competition
Contract Overview
Contract Amount: $30,762,299 ($30.8M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2018-12-19
End Date: 2021-07-15
Contract Duration: 939 days
Daily Burn Rate: $32.8K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: B-52 COMMERCIAL ENGINE REPLACEMENT PROGRAM RISK REDUCTION STUDIES
Place of Performance
Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135
State: Oklahoma Government Spending
Plain-Language Summary
Department of Defense obligated $30.8 million to THE BOEING COMPANY for work described as: B-52 COMMERCIAL ENGINE REPLACEMENT PROGRAM RISK REDUCTION STUDIES Key points: 1. Contract awarded to a single, established prime contractor for a critical defense program. 2. Focus on risk reduction suggests early-stage development and potential for future, larger awards. 3. Cost-plus-fixed-fee structure may incentivize cost overruns if not closely managed. 4. Limited competition raises concerns about optimal pricing and potential for contractor lock-in. 5. Program supports the sustainment and modernization of a key strategic bomber fleet. 6. Contract duration of nearly three years indicates a substantial, ongoing effort.
Value Assessment
Rating: fair
The contract's value of $30.8 million for risk reduction studies appears reasonable given the complexity of modernizing a strategic bomber engine. However, without comparable risk reduction contracts for similar platforms, a precise value-for-money assessment is challenging. The cost-plus-fixed-fee (CPFF) pricing structure, while common for R&D, carries inherent risks of cost escalation if not rigorously overseen. Benchmarking against industry standards for engine development studies would be beneficial.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
This contract was not competed, indicating a sole-source or limited competition award. This approach is often justified for highly specialized work where only a few entities possess the necessary expertise or existing infrastructure. However, the lack of broad competition limits the government's ability to leverage market forces to secure the best possible pricing and terms. The rationale for this limited competition should be clearly documented and justified.
Taxpayer Impact: The absence of robust competition means taxpayers may not be benefiting from the most cost-effective solutions available. This can lead to higher overall program costs over the long term.
Public Impact
The U.S. Air Force benefits from studies aimed at ensuring the long-term viability of its B-52 bomber fleet. Services delivered include critical research and development activities for engine modernization. Geographic impact is primarily within the defense industrial base, supporting specialized engineering and manufacturing. Workforce implications include employment for highly skilled engineers, technicians, and program managers within the aerospace sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition may result in higher costs for taxpayers.
- Cost-plus-fixed-fee contract type can lead to cost overruns without strict oversight.
- Reliance on a single contractor could create future dependencies and reduce leverage.
Positive Signals
- Addresses a critical need for modernizing aging strategic assets.
- Award to a prime contractor with extensive experience in aircraft manufacturing.
- Focus on risk reduction is a prudent step in a complex modernization program.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on aircraft manufacturing and sustainment. The market for strategic bomber modernization is highly concentrated, with a few major defense contractors dominating. Spending in this area is driven by the need to maintain technological superiority and operational readiness of aging fleets. Comparable spending benchmarks would involve other major platform modernization programs, such as fighter jet upgrades or new bomber development.
Small Business Impact
The contract data indicates that small business participation was not a primary focus, as the award was made directly to The Boeing Company. There is no explicit mention of small business set-asides or subcontracting plans within the provided details. This suggests that the prime contractor is expected to manage the entirety of this risk reduction effort, potentially limiting opportunities for small businesses in this specific contract.
Oversight & Accountability
Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA) and the relevant Air Force program office. Accountability measures would be tied to the achievement of milestones outlined in the Cost Plus Fixed Fee contract. Transparency is generally maintained through contract reporting requirements, though specific details of risk reduction studies may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- B-52 Bomber Sustainment Program
- Air Force Materiel Command Research and Development
- Aerospace Engine Manufacturing
- Defense Industrial Base Modernization
Risk Flags
- Limited competition award
- Cost-plus-fixed-fee contract type
- Potential for cost overruns
- Technological risk in engine modernization
Tags
defense, department-of-defense, the-boeing-company, aircraft-manufacturing, cost-plus-fixed-fee, limited-competition, risk-reduction, b-52, strategic-bomber, oklahoma, defense-contract-management-agency
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $30.8 million to THE BOEING COMPANY. B-52 COMMERCIAL ENGINE REPLACEMENT PROGRAM RISK REDUCTION STUDIES
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 $30.8 million.
What is the period of performance?
Start: 2018-12-19. End: 2021-07-15.
What is the track record of The Boeing Company in managing complex engine development and risk reduction programs for the U.S. Air Force?
The Boeing Company has a long and extensive track record in managing complex aerospace programs for the U.S. Air Force, including the development and sustainment of numerous aircraft platforms. They have been involved in various engine integration and modernization efforts throughout their history. While specific details on past risk reduction studies for engines are proprietary, Boeing's experience with large-scale defense contracts suggests a capacity to handle such technically demanding projects. However, like any major defense contractor, they have faced scrutiny and challenges on specific programs, necessitating robust government oversight to ensure successful outcomes and adherence to cost and schedule.
How does the $30.8 million award compare to typical spending on similar engine risk reduction studies for strategic aircraft?
Directly comparing the $30.8 million award for B-52 engine risk reduction studies to 'typical' spending is challenging due to the unique nature of strategic bomber modernization and the proprietary aspects of such research. However, for major defense platforms, early-stage risk reduction and technology maturation efforts can range from tens to hundreds of millions of dollars, depending on the complexity, number of technologies investigated, and the scope of analysis. Given the B-52's age and the significant technological leap required for new engines, this figure appears to be within a plausible range for initial risk assessment and foundational research, especially when considering the specialized expertise and facilities required.
What are the primary risks associated with this specific contract, beyond general CPFF concerns?
Beyond the general risks associated with Cost Plus Fixed Fee (CPFF) contracts, such as potential cost overruns and the need for stringent oversight, this specific contract carries risks related to the technological feasibility of proposed engine solutions for the B-52. There's a risk that the identified risk reduction pathways may prove insufficient or that unforeseen technical challenges emerge during the study phase, potentially impacting future development phases. Furthermore, the limited competition award structure introduces a risk of suboptimal pricing and reduced incentive for aggressive innovation if not managed proactively by the government.
What is the expected effectiveness of these risk reduction studies in ensuring the long-term viability of the B-52 fleet?
The effectiveness of these risk reduction studies is crucial for the long-term viability of the B-52 fleet, which is expected to remain operational for decades. By identifying and mitigating potential technical and programmatic risks early in the engine replacement process, these studies aim to lay a solid foundation for a successful and cost-effective full-scale development and production effort. If the studies are thorough and accurately identify key challenges, they can prevent costly redesigns, delays, and performance issues in later stages, thereby significantly enhancing the probability that the B-52 will continue to serve effectively.
What have been historical spending patterns for B-52 modernization or sustainment programs?
Historical spending on B-52 modernization and sustainment has been substantial, reflecting the platform's longevity and strategic importance. Over the years, the Air Force has invested billions in upgrades to avionics, structural components, and weapons systems to keep the B-52 relevant. Specific engine sustainment and upgrade programs have also incurred significant costs. The current engine replacement program represents a major, multi-billion dollar undertaking, and this initial $30.8 million risk reduction contract is a relatively small, albeit critical, early investment within that larger lifecycle cost.
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, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $31,350,857
Exercised Options: $31,350,857
Current Obligation: $30,762,299
Actual Outlays: $1,001,325
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
Start Date: 2018-12-19
Current End Date: 2021-07-15
Potential End Date: 2021-07-15 00:00:00
Last Modified: 2025-09-03
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