Boeing awarded $35.8M modification for B-52 aircraft modifications, including CERP and modeling updates

Contract Overview

Contract Amount: $35,774,115 ($35.8M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2025-12-23

End Date: 2033-05-31

Contract Duration: 2,716 days

Daily Burn Rate: $13.2K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: MODIFICATION OF TWO (2) B-52 MTC-CERTIFIED AIRCRAFT WITH THE CERP MODIFICATION, ALONG WITH SUBSYSTEM MODELING UPDATES.

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $35.8 million to THE BOEING COMPANY for work described as: MODIFICATION OF TWO (2) B-52 MTC-CERTIFIED AIRCRAFT WITH THE CERP MODIFICATION, ALONG WITH SUBSYSTEM MODELING UPDATES. Key points: 1. Contract focuses on critical aircraft modernization, enhancing capabilities for the B-52 fleet. 2. The modification involves complex engineering and integration of new systems. 3. Sole-source award raises questions about potential cost efficiencies and market alternatives. 4. Long-term contract duration suggests a sustained need for B-52 sustainment and upgrades. 5. The Air Force relies on Boeing for specialized aircraft manufacturing and modification expertise.

Value Assessment

Rating: fair

The contract value of $35.8 million for aircraft modifications appears reasonable given the specialized nature of B-52 modernization. However, without comparable sole-source modifications or detailed cost breakdowns, a precise value-for-money assessment is challenging. The cost-plus-incentive-fee structure aims to control costs, but the absence of competition limits direct price benchmarking against market alternatives. Further analysis of the labor hours, material costs, and profit margins would be needed 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 the Department of the Air Force determined only The Boeing Company could perform the required modifications. This approach is often used when a specific contractor possesses unique technical expertise, proprietary data, or has already invested heavily in the platform's development. The lack of competition means that price discovery through a bidding process was bypassed, potentially leading to higher costs than if multiple vendors had competed.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive pressure. The sole-source nature means there was no opportunity to leverage multiple bids to secure the most cost-effective solution.

Public Impact

The primary beneficiaries are the U.S. Air Force and its B-52 bomber fleet, ensuring continued operational readiness and capability. Services delivered include complex aircraft modifications and subsystem modeling updates, enhancing the aircraft's lifespan and performance. The geographic impact is primarily at the contractor's facilities and Air Force bases where the B-52s are stationed. Workforce implications include specialized engineering, manufacturing, and technical roles at Boeing, supporting high-skilled jobs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Cost-plus-incentive-fee contract type can lead to cost overruns if not managed diligently.
Long contract duration (ending 2033) requires sustained oversight to ensure performance and value.
Reliance on a single contractor for critical modifications may pose supply chain or future development risks.

Positive Signals

Modification addresses critical upgrades (CERP) essential for the B-52's continued service life.
Boeing's established expertise with the B-52 platform suggests a high likelihood of successful technical execution.
Cost-plus-incentive-fee structure incentivizes contractor performance and cost control.
Long-term contract provides stability for essential sustainment and modernization efforts.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft modification and sustainment. The B-52 bomber is a strategic asset, and its modernization is crucial for national defense. Spending in this area is often characterized by high R&D costs, long development cycles, and a limited number of specialized contractors capable of performing such complex work. Comparable spending benchmarks would likely involve other major aircraft platform upgrades or sustainment programs within the DoD.

Small Business Impact

This contract does not appear to involve a small business set-aside. As a sole-source award to a large prime contractor (The Boeing Company), there is no direct indication of subcontracting opportunities for small businesses within this specific award document. However, large defense contractors typically have subcontracting plans that may include small businesses for various components or services, though this is not explicitly detailed here.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Air Force contracting and program management offices. The cost-plus-incentive-fee structure necessitates close monitoring of costs, performance, and adherence to milestones. Transparency may be limited due to the sole-source nature, but contract performance reports and financial reviews are standard oversight mechanisms. The Inspector General's office may also conduct audits or investigations if specific concerns arise regarding waste, fraud, or abuse.

Related Government Programs

B-52 Bomber Sustainment Program
Aircraft Modernization Programs
Air Force Logistics and Maintenance Contracts
Aerospace Manufacturing Contracts
CERP (Combating Effects of Radiation Program)

Risk Flags

Sole-source award
Potential for cost overruns with CPIF contract
Long-term sustainment dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.8 million to THE BOEING COMPANY. MODIFICATION OF TWO (2) B-52 MTC-CERTIFIED AIRCRAFT WITH THE CERP MODIFICATION, ALONG WITH SUBSYSTEM MODELING UPDATES.

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 $35.8 million.

What is the period of performance?

Start: 2025-12-23. End: 2033-05-31.

What is the specific scope of the CERP modification and its impact on the B-52's operational capabilities?

The CERP (Combating Effects of Radiation Program) modification aims to address the long-term effects of radiation exposure on the B-52 bomber's critical electronic systems. This is particularly important for aircraft that have operated in or near nuclear environments or have been exposed to prolonged cosmic radiation. The modification involves updating or replacing sensitive electronic components and potentially shielding certain areas to improve reliability and extend the operational life of the aircraft. The specific impact on operational capabilities includes enhanced system resilience, reduced risk of electronic failures due to radiation degradation, and ensuring the continued effectiveness of the B-52 as a strategic asset for decades to come. The data provided does not detail the exact technical specifications of the CERP modification but highlights its importance for the aircraft's longevity and mission readiness.

How does the cost-plus-incentive-fee (CPIF) contract type influence contractor behavior and cost control for this modification?

A Cost-Plus-Incentive-Fee (CPIF) contract is designed to encourage contractor efficiency and cost control by linking the contractor's profit to achieving specific performance targets, often related to cost, schedule, or technical objectives. In this case, The Boeing Company's final profit will be influenced by how well they manage the $35.8 million modification costs against a target. If Boeing completes the work under the target cost, both the government and the contractor share in the savings (within defined limits). Conversely, if costs exceed the target, the contractor's profit is reduced. This structure incentivizes Boeing to be diligent in managing resources, identifying efficiencies, and avoiding unnecessary expenditures to maximize their fee, while the government benefits from potential cost savings if targets are met or exceeded.

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

Historical spending on B-52 modifications and sustainment by the Department of the Air Force has been substantial, reflecting the aircraft's long service life (entering service in the 1960s) and its continued strategic importance. Over the decades, the Air Force has invested billions of dollars in various upgrade programs to keep the B-52 fleet operationally relevant. These investments have included avionics upgrades, engine replacements, structural reinforcements, and weapon system integration. Specific programs like the Pacer Clock and Pacer CRAG (Compass Rose) have addressed avionics modernization. The CERP modification awarded to Boeing is part of this ongoing, long-term sustainment strategy. Analyzing historical spending reveals a consistent need for significant funding to maintain and modernize aging strategic assets like the B-52, often involving sole-source contracts due to the specialized nature of the work and the original equipment manufacturer's expertise.

What are the risks associated with relying on a sole-source contractor for critical aircraft modifications like the CERP update?

Relying on a sole-source contractor, such as The Boeing Company for the B-52 CERP modification, presents several risks. Firstly, the absence of competition can lead to higher prices than might be achieved in a competitive bidding environment, as the government lacks the leverage of multiple offers. Secondly, it can reduce the incentive for the contractor to innovate or become more efficient, as there is no direct competitive pressure. Thirdly, it creates a dependency on a single supplier, which can be problematic if the contractor experiences financial difficulties, production issues, or decides to discontinue support for a particular product line. This dependency also limits the government's options if future modifications or sustainment needs arise, potentially locking them into a single, potentially less cost-effective, provider.

How does the subsystem modeling update complement the physical CERP modification for the B-52 aircraft?

The subsystem modeling updates are crucial for ensuring the successful integration and validation of the physical CERP modifications on the B-52 aircraft. These updates likely involve creating or refining digital models of the aircraft's systems, particularly those affected by the CERP modification. This allows engineers to simulate the performance of the new or modified components under various operational conditions before they are physically installed. It helps identify potential conflicts, optimize system interactions, and predict the overall impact of the modifications on the aircraft's performance, reliability, and maintainability. By using advanced modeling, the Air Force and Boeing can reduce the risks associated with physical integration, minimize costly trial-and-error during installation, and ensure that the modernized B-52 meets its intended performance specifications more efficiently.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D 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: $2,044,005,063

Exercised Options: $2,044,005,063

Current Obligation: $35,774,115

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