Air Force awards $172.5M for B-52 engine prototyping, with Boeing selected for long-lead components

Contract Overview

Contract Amount: $172,515,400 ($172.5M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2021-10-15

End Date: 2033-05-31

Contract Duration: 4,246 days

Daily Burn Rate: $40.6K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: B-52 COMMERCIAL ENGINE REPALCEMENT PROGRAM RAPID PROTOTYPING MATERIAL 1 LONG LEAD COMPONENTS

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $172.5 million to THE BOEING COMPANY for work described as: B-52 COMMERCIAL ENGINE REPALCEMENT PROGRAM RAPID PROTOTYPING MATERIAL 1 LONG LEAD COMPONENTS Key points: 1. Contract focuses on critical long-lead components for B-52 engine replacement, indicating a strategic investment in aircraft sustainment. 2. The sole-source nature of this award warrants scrutiny regarding potential price inflation and limited market engagement. 3. A long performance period suggests a complex, multi-year effort with inherent schedule and cost risks. 4. The 'Cost Plus Fixed Fee' contract type may incentivize cost overruns if not rigorously managed. 5. This award represents a significant portion of the overall B-52 re-engining program's early-stage investment. 6. The absence of small business participation raises questions about broader economic impact and subcontracting opportunities.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its specific focus on long-lead prototyping for a unique, legacy aircraft. However, the Cost Plus Fixed Fee structure, while common for R&D, carries inherent risks of cost escalation. Without competitive bids, it's difficult to definitively assess if the pricing reflects optimal value for money. Future contract actions will provide a clearer picture as the program matures and more cost data becomes available.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis to The Boeing Company. This approach bypasses the standard competitive bidding process, likely justified by the unique expertise and existing relationship Boeing has with the B-52 platform. However, the lack of competition limits price discovery and potentially reduces the government's leverage in negotiating favorable terms.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government does not benefit from the price reductions typically achieved through competitive bidding.

Public Impact

The primary beneficiary is the Department of the Air Force, ensuring the continued operational readiness of the B-52 bomber fleet. Services delivered include the prototyping and procurement of long-lead components essential for the B-52 Commercial Engine Replacement Program. The geographic impact is concentrated around The Boeing Company's facilities, likely in Oklahoma, and potentially impacts the aerospace manufacturing workforce. This contract supports specialized engineering and manufacturing jobs within the aerospace sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially leading to higher costs.
Cost Plus Fixed Fee contract type can incentivize cost overruns if not closely monitored.
Long performance period (through 2033) increases exposure to schedule delays and evolving requirements.
Lack of small business set-aside may limit broader economic participation and subcontracting opportunities.

Positive Signals

Addresses a critical sustainment need for a key strategic asset (B-52 bomber).
Focus on long-lead components ensures progress on a complex, high-priority modernization program.
Leverages established expertise of The Boeing Company with the B-52 platform.

Sector Analysis

This contract falls within the aerospace manufacturing sector, specifically supporting aircraft component production and modernization. The B-52 re-engining program is a significant undertaking within defense aerospace, aiming to extend the life of a critical strategic bomber. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of long-lead prototyping for legacy platforms, but investments in major aircraft sustainment and modernization programs often run into hundreds of millions or billions of dollars.

Small Business Impact

This contract does not appear to include a small business set-aside, nor is there an indication of significant subcontracting planned for small businesses in the provided data. This suggests that the primary focus is on the prime contractor's capabilities for this specific prototyping phase. The lack of explicit small business involvement could limit opportunities for the small business ecosystem within the aerospace supply chain for this particular award.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Air Force, likely through contracting officers and program management offices. Accountability measures are typically embedded within the Cost Plus Fixed Fee structure, requiring detailed cost reporting and performance metrics. Transparency may be limited due to the sole-source nature and the proprietary aspects of prototyping. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

B-52 Bomber Sustainment Programs
Air Force Aircraft Modernization
Defense Industrial Base Manufacturing
Long-Lead Time Component Procurement

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Long performance period
Lack of small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $172.5 million to THE BOEING COMPANY. B-52 COMMERCIAL ENGINE REPALCEMENT PROGRAM RAPID PROTOTYPING MATERIAL 1 LONG LEAD COMPONENTS

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 $172.5 million.

What is the period of performance?

Start: 2021-10-15. End: 2033-05-31.

What is The Boeing Company's track record with the B-52 platform and similar complex aircraft programs?

The Boeing Company has an extensive and long-standing history with the B-52 Stratofortress, having been the original manufacturer. Their expertise spans decades of production, sustainment, and modification of this iconic aircraft. This deep institutional knowledge is a significant factor in their selection for critical programs like the engine replacement. Boeing has also managed numerous other complex military aircraft programs, including the B-1 Lancer and B-2 Spirit, demonstrating a proven capability in handling large-scale, technologically advanced defense contracts. Their track record generally indicates a strong capacity for engineering, manufacturing, and program management within the defense sector, although like any large contractor, they have faced scrutiny on specific projects regarding cost and schedule performance.

How does the 'Cost Plus Fixed Fee' (CPFF) contract type compare to other pricing arrangements for this type of work?

The Cost Plus Fixed Fee (CPFF) contract type is often used for research and development or complex projects where the scope and costs are not fully defined at the outset. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This structure incentivizes the contractor to control costs to maximize their profit margin, as the fee is fixed regardless of the final cost. However, it can also lead to cost overruns if the initial cost estimates are inaccurate or if scope creep occurs. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility but less cost certainty for the government. Compared to Cost Plus Incentive Fee (CPIF), the profit potential for the contractor is capped, potentially reducing the incentive to achieve exceptional performance beyond meeting baseline requirements.

What are the primary risks associated with a sole-source award for long-lead components?

The primary risks associated with a sole-source award for long-lead components include a lack of competitive pricing, potentially leading to higher costs for the government. Without competing bids, there is less pressure on the contractor to offer the most cost-effective solution. Furthermore, sole-sourcing can limit innovation by excluding other potential suppliers who might offer alternative technologies or approaches. There's also a risk of complacency from the awarded contractor, as they face no immediate threat from competitors for future work related to this program. This can sometimes translate into less rigorous cost management or slower progress if not actively managed by the procuring agency.

What is the expected impact of this contract on the B-52 fleet's operational readiness and lifespan?

This contract is crucial for the long-term operational readiness and lifespan extension of the B-52 fleet. The B-52 is a strategic asset that is expected to remain in service well into the 2050s. Its current engines are aging, and replacing them with modern, more efficient, and reliable engines is essential to ensure the aircraft can continue to meet its mission requirements. By securing long-lead components now, the Air Force is taking a critical step in the multi-year B-52 Commercial Engine Replacement Program (CERP). Successful execution of this program, starting with this prototyping phase, will mitigate risks associated with engine failures, reduce maintenance costs, improve fuel efficiency, and ensure the B-52 remains a viable platform for strategic deterrence and global strike capabilities for decades to come.

How does this $172.5 million award fit into the overall projected cost of the B-52 engine replacement program?

This $172.5 million award represents an initial, significant investment in the B-52 Commercial Engine Replacement Program (CERP), specifically for long-lead components and rapid prototyping. The overall cost of the CERP is projected to be substantially higher, potentially running into billions of dollars, as it involves the procurement and integration of new engines for the entire B-52 fleet, along with associated support equipment and modifications. This initial award is focused on critical early-stage activities necessary to de-risk the program and establish a foundation for subsequent, larger contract actions. It is a necessary precursor to the full-scale production and integration phases, which will constitute the bulk of the program's expenditure.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

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: $468,330,594

Exercised Options: $468,330,594

Current Obligation: $172,515,400

Subaward Activity

Number of Subawards: 168

Total Subaward Amount: $199,106,876

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA862819D1000

IDV Type: IDC

Timeline