Air Force awards $37M Boeing contract for full-scale fatigue testing of aircraft

Contract Overview

Contract Amount: $36,956,606 ($37.0M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2019-08-01

End Date: 2020-06-30

Contract Duration: 334 days

Daily Burn Rate: $110.6K/day

Competition Type: NOT COMPETED

Pricing Type: TIME AND MATERIALS

Sector: Defense

Official Description: B-1 FULL SCALE FATIGUE TEST (FSFT)

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $37.0 million to THE BOEING COMPANY for work described as: B-1 FULL SCALE FATIGUE TEST (FSFT) Key points: 1. Contract awarded to a single, established prime contractor, raising questions about competitive pricing. 2. The contract's value is significant, necessitating careful review of the delivered services. 3. Performance period is relatively short, suggesting a focused scope for the fatigue testing. 4. The 'time and materials' pricing structure can introduce cost uncertainty if not closely managed. 5. This contract supports critical aircraft sustainment and safety verification processes.

Value Assessment

Rating: fair

The contract value of approximately $37 million for fatigue testing is substantial. Without specific benchmarks for similar full-scale fatigue tests on comparable aircraft, it is difficult to definitively assess value for money. The 'time and materials' pricing model, while common for R&D and testing, carries inherent risks of cost overruns if not meticulously managed and monitored by the government. The awarded amount appears to be within a reasonable range for such complex engineering services, but a detailed cost breakdown and comparison to industry standards would be necessary for a more robust evaluation.

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 justified when a specific contractor possesses unique capabilities, proprietary knowledge, or is the sole provider of a necessary component or service. In this case, Boeing, as the original manufacturer of the aircraft, likely holds the necessary expertise and data for conducting accurate fatigue testing. The lack of competition means that the government did not benefit from price discovery through a bidding process.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. The government must rely on robust negotiation and oversight to ensure a fair price.

Public Impact

The primary beneficiary is the Department of the Air Force, ensuring the airworthiness and longevity of its aircraft fleet. Services delivered include comprehensive fatigue testing, a critical component of aircraft safety and maintenance. The geographic impact is primarily centered around the contractor's facilities, likely in Oklahoma. This contract supports specialized engineering and technical roles within the aerospace sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing opportunities.
Time and materials contract type introduces potential for cost escalation without strict oversight.
Lack of detailed cost breakdown makes independent value assessment challenging.

Positive Signals

Awarded to the original aircraft manufacturer, ensuring specialized knowledge and data are leveraged.
Supports critical safety and sustainment functions for the Air Force's aircraft.
Contract duration is defined, allowing for focused execution of testing.

Sector Analysis

The aerospace manufacturing sector is characterized by high R&D costs, complex supply chains, and significant government contracts. Full-scale fatigue testing is a crucial, albeit expensive, part of ensuring aircraft safety and extending operational life. This contract fits within the broader defense aerospace market, where specialized testing services are essential for maintaining advanced platforms. Comparable spending in this niche area is difficult to pinpoint without access to proprietary data, but such testing is a standard requirement for major aircraft programs.

Small Business Impact

This contract was awarded directly to The Boeing Company and does not appear to include specific small business set-aside provisions. As a large prime contractor, Boeing may engage small businesses as subcontractors for specific components or services, but the primary award is not directed towards small business participation. The subcontracting plan, if any, would be critical to understanding the broader impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Given the 'time and materials' nature, rigorous monitoring of labor hours, material costs, and progress against the testing plan is essential. Transparency is facilitated through contract reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Aircraft Sustainment Programs
Aerospace Research and Development
Defense Logistics Agency Contracts
Airworthiness Certification Services

Risk Flags

Sole-source award
Time and materials pricing
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.0 million to THE BOEING COMPANY. B-1 FULL SCALE FATIGUE TEST (FSFT)

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 $37.0 million.

What is the period of performance?

Start: 2019-08-01. End: 2020-06-30.

What is the historical spending pattern for full-scale fatigue testing by the Department of the Air Force?

Historical spending data for full-scale fatigue testing by the Department of the Air Force is not publicly itemized in a readily accessible format. Such testing is typically integrated into broader aircraft acquisition, sustainment, or modification programs. While specific contract awards for fatigue testing do appear, they are often part of larger efforts or awarded to the prime aircraft manufacturer. Analyzing historical spending would require aggregating data across numerous contracts and program offices, potentially spanning decades, to identify trends in testing scope, frequency, and cost. The $37 million awarded to Boeing represents a significant single investment in this critical safety function for a specific aircraft platform.

How does the 'time and materials' pricing structure compare to fixed-price contracts for similar testing services?

Time and materials (T&M) contracts, like the one awarded to Boeing, offer flexibility but can lead to cost uncertainty. The government pays for the actual labor hours and material costs incurred by the contractor, plus a fixed fee or profit. This is often used when the scope of work is not well-defined or is expected to change, such as in research and development or complex testing scenarios. Fixed-price contracts, conversely, establish a set price for a defined scope of work, shifting the cost risk to the contractor. For fatigue testing, a fixed-price contract could be feasible if the testing parameters and duration are precisely known. However, T&M allows for adjustments if unforeseen issues arise during the testing process, which can be common in fatigue analysis. The key for the government in a T&M contract is rigorous oversight to ensure efficiency and prevent cost overruns.

What are the potential risks associated with a sole-source award for critical aircraft testing?

The primary risk associated with a sole-source award for critical aircraft testing is the potential for reduced price competition, which could lead to higher costs for the government compared to a competitively bid contract. Without multiple bidders vying for the work, there is less incentive for the contractor to offer the lowest possible price. Furthermore, reliance on a single source can create dependency and limit the government's options if performance issues arise or if the contractor's capabilities become insufficient. In this specific case, awarding to Boeing for fatigue testing of their own aircraft mitigates some risk by leveraging their unique knowledge and data, but it still necessitates careful negotiation and oversight to ensure fair pricing and satisfactory performance.

What is Boeing's track record with Department of Defense fatigue testing contracts?

The Boeing Company has a long and extensive track record of performing complex engineering, manufacturing, and testing services for the Department of Defense, including various forms of aircraft testing. As the original manufacturer of numerous military aircraft platforms, Boeing routinely conducts or oversees critical testing, including structural integrity and fatigue analysis, to ensure airworthiness and compliance with stringent military specifications. While specific contract details for all past fatigue testing efforts are not always publicly detailed, Boeing's role as a primary defense contractor implies significant experience in this domain. Their history suggests a capability to execute such demanding technical requirements, though performance and cost-effectiveness can vary across individual contracts.

How does this contract contribute to the overall readiness and safety of the Air Force's aircraft fleet?

This contract directly contributes to the overall readiness and safety of the Air Force's aircraft fleet by ensuring the structural integrity and longevity of specific aircraft through full-scale fatigue testing (FSFT). FSFT simulates the stresses and strains an aircraft endures over its operational lifespan, identifying potential failure points and areas requiring reinforcement or modification. By understanding these limits, the Air Force can establish appropriate maintenance schedules, define operational envelopes, and implement necessary upgrades to prevent catastrophic failures in the field. This proactive approach is crucial for maintaining mission capability, protecting aircrew, and extending the service life of expensive military assets, thereby enhancing overall fleet readiness.

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: TIME AND MATERIALS (Y)

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: $36,956,606

Exercised Options: $36,956,606

Current Obligation: $36,956,606

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA810719D0001

IDV Type: IDC

Timeline