DoD awards Boeing $33.7M for B-52 Software Sustainment, raising concerns about competition and taxpayer value
Contract Overview
Contract Amount: $33,709,379 ($33.7M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2020-07-15
End Date: 2025-05-31
Contract Duration: 1,781 days
Daily Burn Rate: $18.9K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: B-52 SOFTWARE BLOCK SUSTAINMENT AND SUPPORT
Place of Performance
Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135
State: Oklahoma Government Spending
Plain-Language Summary
Department of Defense obligated $33.7 million to THE BOEING COMPANY for work described as: B-52 SOFTWARE BLOCK SUSTAINMENT AND SUPPORT Key points: 1. Significant contract value for software sustainment, requiring careful oversight. 2. Sole-source award to Boeing limits competitive pricing and innovation. 3. Potential for cost overruns due to Cost Plus Incentive Fee structure. 4. Long contract duration (1781 days) necessitates ongoing performance monitoring.
Value Assessment
Rating: questionable
The Cost Plus Incentive Fee (CPIF) contract type can incentivize cost savings but also carries risk if not managed tightly. Without competitive benchmarks, assessing the pricing fairness for this specific software sustainment is difficult.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, awarded directly to The Boeing Company. Sole-source awards limit price discovery and can lead to higher costs for taxpayers compared to competitive procurements.
Taxpayer Impact: The lack of competition may result in the government paying a premium for these software sustainment services.
Public Impact
Ensures continued operational capability of the B-52 bomber fleet's software. Supports critical national defense infrastructure. Potential for taxpayer funds to be used inefficiently due to sole-source award.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Incentive Fee contract type
- Long contract duration
Positive Signals
- Ensures critical software sustainment for a key defense asset
Sector Analysis
This contract falls within the Defense sector, specifically aircraft manufacturing and maintenance. Spending on sustainment for legacy platforms like the B-52 is common but requires scrutiny to ensure cost-effectiveness.
Small Business Impact
This contract was awarded to a large prime contractor, The Boeing Company. There is no indication of subcontracting opportunities for small businesses within the provided data.
Oversight & Accountability
The Defense Contract Management Agency (DCMA) is responsible for oversight. However, the sole-source nature of the award and the CPIF structure warrant close monitoring to ensure cost control and performance.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition
- Potential for cost overruns
- Limited transparency in pricing
- Long contract duration without clear performance milestones
Tags
aircraft-manufacturing, department-of-defense, ok, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $33.7 million to THE BOEING COMPANY. B-52 SOFTWARE BLOCK SUSTAINMENT AND SUPPORT
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 $33.7 million.
What is the period of performance?
Start: 2020-07-15. End: 2025-05-31.
What is the historical cost performance for similar B-52 software sustainment efforts, and how does this contract's projected cost compare?
Historical cost data for similar B-52 software sustainment efforts is not provided. However, the current contract's value of $33.7 million over approximately five years suggests a significant investment. Without competitive bids or detailed cost breakdowns, a precise comparison is challenging, but the sole-source nature raises flags about potential inefficiencies compared to a market-driven price.
What specific risks are associated with the Cost Plus Incentive Fee (CPIF) structure in this sole-source context, and how are they being mitigated?
The primary risk of a CPIF contract, especially when sole-source, is that the contractor may not be sufficiently incentivized to control costs if the government's share of savings is low or if performance targets are easily met. Mitigation strategies should include robust government oversight, clear and challenging performance metrics, and detailed cost analysis to ensure the 'incentive' aspect truly benefits the taxpayer.
How will the effectiveness of this software sustainment be measured, particularly given the long duration and lack of direct competition?
Effectiveness will likely be measured through key performance indicators (KPIs) related to software uptime, bug resolution times, security patch deployment, and the successful integration of necessary updates. The long duration necessitates continuous monitoring and periodic reviews by the contracting officer to ensure the contractor is meeting performance standards and delivering value, despite the absence of competitive pressure.
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 INCENTIVE FEE (V)
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: $34,252,761
Exercised Options: $33,709,379
Current Obligation: $33,709,379
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
Start Date: 2020-07-15
Current End Date: 2025-05-31
Potential End Date: 2025-05-31 00:00:00
Last Modified: 2025-07-14
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