Boeing awarded $45.5M for B-1/B-52 engineering, facing limited competition

Contract Overview

Contract Amount: $45,511,172 ($45.5M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2021-02-02

End Date: 2026-03-31

Contract Duration: 1,883 days

Daily Burn Rate: $24.2K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: B-1/B-52 ENGINEERING ASSIGNMENT

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $45.5 million to THE BOEING COMPANY for work described as: B-1/B-52 ENGINEERING ASSIGNMENT Key points: 1. Contract awarded to a single, large defense contractor, raising questions about competitive pricing. 2. Long-term contract duration suggests potential for cost overruns if not closely managed. 3. Cost-plus contract type carries inherent risk of increased costs compared to fixed-price awards. 4. Sole-source nature limits opportunities for innovative solutions from smaller, specialized firms. 5. Focus on engineering services indicates a critical, but potentially less transparent, aspect of aircraft sustainment. 6. Geographic concentration in Oklahoma may limit broader economic benefits.

Value Assessment

Rating: questionable

The $45.5 million award to Boeing for B-1/B-52 engineering services lacks a clear benchmark for value. As a sole-source contract, direct comparison to similar services procured through competitive bidding is not possible. The cost-plus fixed fee structure, while common for complex engineering, inherently shifts cost risk to the government, making it difficult to assess true value-for-money without detailed cost breakdowns and performance metrics. The extended duration of the contract (over 5 years) also raises concerns about potential cost escalation over time.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of the Air Force did not solicit bids from multiple vendors. This approach is typically justified when only one vendor possesses the necessary specialized knowledge, technology, or capability. However, the lack of competition means there was no opportunity for price discovery through a bidding process, potentially leading to higher costs for the government compared to a competed contract.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure to drive down costs. The government's ability to negotiate favorable terms is also diminished in a sole-source scenario.

Public Impact

The primary beneficiaries are the Department of the Air Force, ensuring continued engineering support for critical bomber fleets. Services delivered include essential engineering assignments for the B-1 and B-52 aircraft, crucial for maintaining operational readiness. Geographic impact is concentrated in Oklahoma, where Boeing's facility will perform the work, potentially supporting local jobs. Workforce implications include the utilization of specialized engineering talent within Boeing, contributing to the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost-plus contract type increases risk of cost overruns.
Long contract duration (over 5 years) could lead to price escalation.
Lack of transparency in cost breakdown for sole-source awards.
Potential for vendor lock-in due to specialized nature of services.

Positive Signals

Award to established contractor with known capabilities for bomber aircraft.
Contract addresses critical engineering needs for legacy platforms.
Long-term nature provides stability for essential engineering support.
Fixed fee component provides some cost control within the cost-plus structure.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and long product lifecycles. Engineering services for legacy aircraft like the B-1 and B-52 are a niche but critical segment. Spending in this area is driven by the need for sustainment, modernization, and operational readiness of aging fleets. Comparable spending benchmarks are difficult to establish due to the specialized nature and sole-source awards common in this segment, but overall defense engineering services represent a substantial portion of the DoD budget.

Small Business Impact

This contract does not appear to involve small business set-asides, as it was awarded to The Boeing Company, a large prime contractor. There is no explicit information regarding subcontracting plans for small businesses within this specific award. The sole-source nature of the award limits opportunities for small businesses to directly participate as prime contractors, though they may be involved as subcontractors to Boeing.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. As a cost-plus fixed fee contract, rigorous financial oversight and auditing by the Defense Contract Audit Agency (DCAA) and the Department of Defense Inspector General (DoDIG) would be expected to ensure costs are allowable, allocable, and reasonable. Transparency is limited due to the sole-source nature and the proprietary nature of engineering data, but contract performance reviews and milestone tracking should provide some level of accountability.

Related Government Programs

B-1 Bomber Sustainment Program
B-52 Stratofortress Modernization Program
Air Force Aircraft Engineering Services
DoD Combat Aircraft Maintenance
Defense Logistics Agency Aviation Support

Risk Flags

Sole-source award
Cost-plus contract type
Long contract duration
Lack of public performance metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $45.5 million to THE BOEING COMPANY. B-1/B-52 ENGINEERING ASSIGNMENT

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 $45.5 million.

What is the period of performance?

Start: 2021-02-02. End: 2026-03-31.

What is Boeing's track record with similar engineering support contracts for the Air Force?

The Boeing Company has a long-standing and extensive track record of providing engineering, manufacturing, and sustainment services for various U.S. Air Force platforms, including bombers and fighters. They are a primary contractor for numerous aircraft programs, often holding sustainment and upgrade contracts. While specific performance data for individual contracts is often sensitive, Boeing's continued selection for critical programs suggests a generally satisfactory performance history. However, like many large defense contractors, they have faced scrutiny over cost control and delivery timelines on certain projects. For B-1 and B-52 specific engineering, Boeing's deep historical involvement with these platforms provides them with unique institutional knowledge.

How does the cost-plus fixed fee (CPFF) structure compare to other contract types for engineering services?

The Cost-Plus Fixed Fee (CPFF) contract type is often used for research and development or complex engineering efforts where the scope of work is not precisely defined at the outset, making a firm fixed price impractical. In a CPFF contract, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure shifts significant cost risk to the government, as the final price is not capped. Compared to Firm Fixed Price (FFP) contracts, CPFF offers less cost certainty for the government but allows for greater flexibility in adapting to evolving requirements. Incentive Fee (IF) or Cost Plus Incentive Fee (CPIF) contracts offer a middle ground, providing incentives for cost savings or performance targets.

What are the primary risks associated with sole-source procurement in defense contracting?

Sole-source procurement, while sometimes necessary for unique capabilities, carries several inherent risks for the government and taxpayers. The most significant risk is the lack of competitive pressure, which can lead to inflated prices and reduced value for money. Without competing bids, the government has less leverage to negotiate favorable terms and may overpay for goods or services. Another risk is the potential for vendor lock-in, where the government becomes overly reliant on a single supplier, making it difficult and costly to switch providers in the future. This can stifle innovation as the sole provider may face less pressure to improve products or processes. Furthermore, oversight and transparency can be more challenging without the comparative data provided by a competitive bidding process.

What is the typical duration for engineering support contracts of this nature?

The duration for engineering support contracts, particularly for complex military aircraft sustainment, can vary significantly but often extends over multiple years. Contracts like this one, with an end date over five years from the start, are not uncommon, especially when dealing with legacy platforms requiring ongoing maintenance, upgrades, and technical support. Longer durations provide stability and predictability for both the contractor and the government, allowing for long-term planning and workforce retention. However, extended periods also increase the risk of cost escalation and the potential for requirements to change, necessitating careful management and potential contract modifications.

Are there specific performance metrics or KPIs tied to this contract?

The provided data does not specify the Key Performance Indicators (KPIs) or specific performance metrics tied to this contract. However, for a Cost-Plus Fixed Fee (CPFF) contract involving engineering services for critical aircraft platforms, performance is typically measured against milestones, technical specifications, delivery schedules for engineering data or support, and adherence to quality standards. The Air Force contracting officer and program managers are responsible for monitoring these aspects. The fixed fee component may also be subject to adjustments based on performance, although the details of such mechanisms are not publicly available for this specific award.

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: $45,511,172

Exercised Options: $45,511,172

Current Obligation: $45,511,172

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $285,251

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