Boeing awarded $20.9M for B-52 engineering services by the Air Force

Contract Overview

Contract Amount: $20,893,962 ($20.9M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2020-01-01

End Date: 2020-12-31

Contract Duration: 365 days

Daily Burn Rate: $57.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: B-1 B-52 ENGINEERING SERVICES

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $20.9 million to THE BOEING COMPANY for work described as: B-1 B-52 ENGINEERING SERVICES Key points: 1. Contract awarded to incumbent provider, raising questions about potential cost efficiencies. 2. Limited competition may have impacted price discovery and taxpayer value. 3. Performance history and on-time delivery metrics are crucial for assessing value. 4. This contract supports the sustainment of a critical, long-serving aircraft platform. 5. The fixed-price incentive structure aims to align contractor and government interests. 6. Geographic concentration of services in Oklahoma warrants attention for redundancy.

Value Assessment

Rating: fair

The contract value of $20.9 million for B-52 engineering services appears moderate given the scope of supporting a major aircraft platform. However, without direct comparable contracts for similar engineering services on legacy aircraft, a precise value-for-money assessment is challenging. The fixed-price incentive (FPI) contract type suggests an effort to control costs, but the final price will depend on performance against targets. Benchmarking against industry standards for aircraft sustainment engineering would be necessary for a more definitive valuation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating that only one bidder, The Boeing Company, was considered capable of fulfilling the requirement. This approach is often used for specialized services where a single entity possesses unique knowledge, facilities, or intellectual property essential for the task. While it ensures access to critical expertise, it limits the opportunity for competitive bidding, which could potentially lead to higher prices than if multiple vendors had competed.

Taxpayer Impact: Sole-source awards can result in less competitive pricing, potentially increasing costs for taxpayers. The absence of competition means the government cannot leverage market forces to secure the best possible price.

Public Impact

The primary beneficiaries are the U.S. Air Force and its B-52 bomber fleet, ensuring operational readiness. Services delivered include engineering support, maintenance planning, and technical data management for the B-52 aircraft. The geographic impact is concentrated in Oklahoma, where the services are performed. Workforce implications include the retention of specialized aerospace engineering expertise within The Boeing Company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Reliance on a single contractor for critical engineering services poses a risk.
Lack of detailed performance metrics in the provided data makes value assessment difficult.

Positive Signals

Fixed-price incentive contract type encourages cost control.
Boeing's long-standing relationship with the B-52 platform suggests deep institutional knowledge.
Contract supports a vital national defense asset.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically supporting legacy aircraft sustainment. The market for specialized engineering services on aging platforms like the B-52 is often dominated by the original equipment manufacturers due to proprietary knowledge and established infrastructure. Spending on aircraft sustainment is a significant portion of the defense budget, with contracts often extending for many years to ensure fleet readiness.

Small Business Impact

There is no indication of a small business set-aside for this contract, nor is there information on subcontracting plans. As a sole-source award to a large prime contractor, the direct impact on small businesses is likely minimal unless Boeing actively engages them for specific support services not detailed in this award.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Air Force contracting and program management offices. Accountability measures are embedded within the fixed-price incentive contract structure, linking contractor profit to performance against cost targets. Transparency is generally maintained through contract award databases, though detailed performance data may be restricted.

Related Government Programs

B-52 Bomber Sustainment Programs
Air Force Aircraft Maintenance Contracts
Aerospace Engineering Services Contracts
Department of Defense Legacy Aircraft Support

Risk Flags

Sole-source award
Potential for cost overruns
Reliance on incumbent contractor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.9 million to THE BOEING COMPANY. B-1 B-52 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 $20.9 million.

What is the period of performance?

Start: 2020-01-01. End: 2020-12-31.

What is The Boeing Company's track record with B-52 engineering support contracts?

The Boeing Company has a long and established history supporting the B-52 Stratofortress, having been the original manufacturer. Their track record typically involves providing a range of services including sustainment engineering, modifications, upgrades, and technical support. While specific performance metrics for past B-52 contracts are not detailed here, Boeing's extensive experience with this platform suggests a deep understanding of its systems and maintenance requirements. However, like any large defense contractor, past performance reviews and contract closeouts would provide a more granular view of their success in meeting cost, schedule, and technical objectives on similar engagements.

How does the $20.9 million contract value compare to similar B-52 sustainment efforts?

Directly comparing the $20.9 million value of this specific delivery order for engineering services to other B-52 sustainment efforts is challenging without more granular data. Sustainment encompasses a wide range of activities, from depot maintenance and component repair to depot-level modifications and depot-level modifications. This contract appears focused on engineering services, which might represent a smaller slice of the overall sustainment pie compared to major structural repairs or engine overhauls. To benchmark effectively, one would need to identify contracts with similar scopes of work (e.g., engineering support, technical data management) for comparable legacy aircraft platforms, considering factors like contract duration, labor rates, and specific deliverables.

What are the primary risks associated with this sole-source contract?

The primary risk associated with this sole-source contract is the potential for elevated costs due to the lack of competitive bidding. Without competing offers, the government may not achieve the most favorable pricing. Another risk is contractor performance; while Boeing has extensive experience, any sole-source provider faces less external pressure to innovate or improve efficiency. Furthermore, reliance on a single entity for critical engineering services creates a dependency that could be problematic if the contractor faces financial instability, labor disputes, or strategic shifts. Ensuring robust oversight and clear performance metrics within the contract is crucial to mitigate these risks.

How effective is the Fixed Price Incentive (FPI) contract type in managing costs for this B-52 engineering service?

The Fixed Price Incentive (FPI) contract type is designed to provide a middle ground between fixed-price and cost-reimbursement contracts, aiming to control costs while allowing for some flexibility. In an FPI contract, the final price is adjusted based on the contractor's performance against mutually agreed-upon target cost and target profit goals. If the contractor achieves a lower final cost than the target, both the government and the contractor share in the savings (via a lower price and higher profit, respectively, up to a ceiling). Conversely, if costs exceed the target, the contractor's profit is reduced, and the price increases, up to a negotiated maximum. This structure incentivizes the contractor to manage costs effectively to maximize their profit, thereby benefiting the government through potentially lower final prices than a standard fixed-price contract might yield if cost overruns were significant.

What are the historical spending patterns for B-52 engineering and sustainment by the Air Force?

Historical spending patterns for B-52 engineering and sustainment by the Air Force have been substantial and ongoing, reflecting the aircraft's long service life and critical role. Over the decades, the Air Force has allocated significant funds to maintain, modernize, and support the B-52 fleet. This includes contracts for depot maintenance, component upgrades, avionics modernization, engine services, and specialized engineering support. Annual spending can fluctuate based on modernization program cycles and the overall readiness requirements for the bomber force. The total investment in sustaining the B-52 fleet runs into billions of dollars over its operational lifespan, with specific engineering services contracts like this one representing a component of that larger, continuous investment.

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

Solicitation ID: FA810718R0002

Pricing Type: FIXED PRICE INCENTIVE (L)

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: $20,893,962

Exercised Options: $20,893,962

Current Obligation: $20,893,962

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA810719D0001

IDV Type: IDC

Timeline