Boeing awarded $19.5M for B-52 engineering services, a sole-source contract with a high per-unit cost

Contract Overview

Contract Amount: $19,472,540 ($19.5M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2020-08-01

End Date: 2021-02-28

Contract Duration: 211 days

Daily Burn Rate: $92.3K/day

Competition Type: NOT COMPETED

Pricing Type: TIME AND MATERIALS

Sector: Defense

Official Description: B-1 B-52 ENGINEERING SERVICES (BBES)

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $19.5 million to THE BOEING COMPANY for work described as: B-1 B-52 ENGINEERING SERVICES (BBES) Key points: 1. The contract was awarded on a sole-source basis, limiting competitive pressure on pricing. 2. The per-unit cost of $922,870 appears high when compared to typical engineering service contracts. 3. The contract duration of 211 days is relatively short for complex engineering services. 4. The 'OK' status for the contractor and location suggests no immediate performance or compliance issues. 5. This contract falls under aircraft manufacturing, a critical but often specialized sector. 6. The time and materials pricing model can lead to cost overruns if not closely managed.

Value Assessment

Rating: questionable

The per-unit cost of $922,870 is significantly higher than benchmarks for similar engineering support contracts, which often fall in the tens of thousands per unit. While specialized knowledge for the B-52 platform may justify a premium, the lack of competition and the time-and-materials structure raise concerns about overall value for money. Without more detailed cost breakdowns or comparisons to other sole-source awards for legacy aircraft, it's difficult to definitively assess the fairness of the price.

Cost Per Unit: $922,870

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning only one vendor, The Boeing Company, was solicited. This approach bypasses the competitive bidding process, which typically drives down prices and encourages innovation. While sole-sourcing can be justified for unique capabilities or existing platform expertise, it inherently reduces price discovery and may lead to higher costs for the government.

Taxpayer Impact: The lack of competition means taxpayers did not benefit from potential cost savings that a competitive bidding process might have yielded. This could result in a higher overall expenditure for essential B-52 engineering support.

Public Impact

The U.S. Air Force benefits from continued engineering support for its B-52 bomber fleet. Essential maintenance and upgrade engineering services are delivered to ensure aircraft readiness. The contract's geographic impact is centered in Oklahoma, where the contractor operates. The contract supports specialized engineering roles within the aerospace and defense industry workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Time and materials contract type carries a risk of cost escalation without strict oversight.
High per-unit cost warrants further investigation into pricing justification and market comparables.
Limited contract duration may indicate a need for follow-on contracts, potentially increasing total spending.

Positive Signals

Contract awarded to the original equipment manufacturer (OEM) for the B-52, ensuring specialized knowledge.
Contract performance period is defined, allowing for focused engineering efforts.
Contractor and location status are marked 'OK', suggesting a baseline level of operational stability.

Sector Analysis

This contract operates within the aerospace and defense sector, specifically focusing on aircraft manufacturing and support services. The B-52 bomber is a long-standing strategic asset for the U.S. Air Force, requiring continuous engineering expertise for sustainment and modernization. Spending in this niche often involves high-value, specialized services due to the complexity and age of the platforms. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of legacy aircraft support, but engineering services for major defense platforms can range from millions to hundreds of millions annually.

Small Business Impact

This contract was not set aside for small businesses, nor does it indicate any specific subcontracting requirements for small businesses. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless Boeing actively engages small business subcontractors for specific components or services not detailed in this award notice. Further analysis of Boeing's subcontracting plans would be needed to assess broader small business implications.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The 'OK' status for contractor and location suggests that current oversight mechanisms are not flagging significant issues. However, the time and materials pricing model necessitates robust financial oversight to prevent cost overruns and ensure fair pricing. Transparency is limited due to the sole-source nature and the lack of publicly available detailed cost breakdowns.

Related Government Programs

B-52 Bomber Sustainment Programs
Air Force Materiel Command Engineering Services
Legacy Aircraft Support Contracts
Defense Logistics Agency Aviation Support

Risk Flags

Sole-source award
Time and materials pricing
High per-unit cost

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.5 million to THE BOEING COMPANY. B-1 B-52 ENGINEERING SERVICES (BBES)

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 $19.5 million.

What is the period of performance?

Start: 2020-08-01. End: 2021-02-28.

What is the track record of The Boeing Company in providing engineering services for the B-52 platform?

The Boeing Company, as the original equipment manufacturer (OEM) for the B-52 Stratofortress, possesses extensive historical knowledge and technical data related to the aircraft's design, manufacturing, and sustainment. They have been the primary entity responsible for engineering support, modifications, and upgrades throughout the B-52's operational life. This includes significant involvement in programs aimed at extending the aircraft's service life well into the future. Their long-standing relationship and deep institutional knowledge make them a critical, often sole-source, provider for specialized B-52 engineering requirements. Past performance data, while not detailed here, would likely show a history of fulfilling complex engineering tasks, though specific cost-effectiveness and efficiency metrics would require deeper analysis of individual contract performance.

How does the $922,870 per-unit cost compare to similar engineering services contracts for legacy aircraft?

The per-unit cost of $922,870 for B-52 engineering services is exceptionally high when compared to typical benchmarks for engineering support. While specialized knowledge for legacy platforms like the B-52 commands a premium, most engineering service contracts, even for complex defense systems, often have per-unit costs in the tens of thousands, or potentially low hundreds of thousands for highly specialized, short-duration tasks. This figure suggests either an extremely intensive scope of work per unit (e.g., complex system redesign or advanced analysis) or a pricing structure that is significantly above market rates, especially given the sole-source nature. Without knowing the specific unit of measure (e.g., per engineer hour, per system component analyzed, per report generated), a direct comparison is challenging, but this value warrants scrutiny regarding its justification and potential for cost savings.

What are the primary risks associated with a sole-source, time-and-materials contract for engineering services?

The primary risks associated with a sole-source, time-and-materials (T&M) contract for engineering services are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to inflated pricing as the contractor faces no market alternatives. The government loses the opportunity to benefit from competitive bidding, which typically drives cost efficiency. Secondly, the T&M structure carries inherent risks of cost escalation. Since the contractor is reimbursed for actual labor hours and material costs, there is less incentive to control project duration or resource utilization. Without stringent oversight, monitoring, and defined ceilings, T&M contracts can exceed budgeted amounts significantly. This combination requires vigilant government oversight to manage scope, control hours, and validate costs effectively.

What is the historical spending pattern for B-52 engineering services, and how does this award fit within it?

Historical spending on B-52 engineering services has been substantial and ongoing, reflecting the aircraft's extended service life and the need for continuous sustainment, modernization, and upgrades. The U.S. Air Force has consistently allocated significant funds to ensure the B-52 fleet remains operational and capable, often through multi-year contracts and various specialized service agreements. This $19.5 million award represents a discrete component of that larger, ongoing investment. It likely addresses specific engineering needs within a defined period (August 2020 - February 2021). While the total annual spending on B-52 sustainment can reach hundreds of millions, this particular award appears to be a mid-sized, focused effort within that broader budgetary context. Its sole-source nature and T&M structure are consistent with how specialized, OEM-dependent support for legacy platforms is often procured.

Are there alternative providers or technologies that could fulfill similar engineering needs for the B-52, even if not the OEM?

While The Boeing Company, as the OEM, holds the most comprehensive knowledge and proprietary data for the B-52, alternative providers or technologies could potentially fulfill certain engineering needs, though likely with limitations or requiring significant knowledge transfer. Third-party aerospace engineering firms with expertise in legacy aircraft sustainment might be capable of performing specific analyses, diagnostics, or developing modifications, provided they gain access to necessary technical data and blueprints. However, critical systems engineering, deep structural analysis, or avionics integration often require direct OEM involvement or licensing. Furthermore, advancements in digital engineering, simulation, and predictive maintenance technologies could offer new avenues for support, potentially reducing reliance on traditional, hands-on engineering services. Exploring these alternatives, even for specific tasks, could introduce competition or offer more cost-effective solutions, but would necessitate a thorough assessment of capability gaps and data access.

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: $20,652,609

Exercised Options: $20,652,609

Current Obligation: $19,472,540

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