Air Force awards $9.5M contract to Boeing for recurring aircraft manufacturing services, extending existing support

Contract Overview

Contract Amount: $9,486,097 ($9.5M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2026-01-01

End Date: 2026-12-31

Contract Duration: 364 days

Daily Burn Rate: $26.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: BBES OPTION YEAR VII RECURRING SERVICES.

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $9.5 million to THE BOEING COMPANY for work described as: BBES OPTION YEAR VII RECURRING SERVICES. Key points: 1. Contract provides essential recurring services for aircraft manufacturing, indicating ongoing operational needs. 2. Awarded to a single, established prime contractor, raising questions about competitive pressure on pricing. 3. The fixed-price incentive contract type aims to balance cost control with performance incentives. 4. Duration of one year suggests a focus on immediate operational requirements rather than long-term strategic shifts. 5. The contract falls under aircraft manufacturing, a critical sector for national defense capabilities. 6. No small business set-aside was applied, potentially limiting opportunities for smaller firms in this segment.

Value Assessment

Rating: fair

The contract value of $9.5 million for one year of recurring aircraft manufacturing services appears to be within a reasonable range for specialized defense support. However, without detailed breakdowns of the services provided and comparison to similar sole-source or limited-competition contracts for aircraft sustainment, a precise value-for-money assessment is challenging. The fixed-price incentive structure suggests an effort to manage costs while ensuring performance, but the ultimate cost-effectiveness will depend on the achieved performance metrics and the contractor's efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating it was awarded directly to The Boeing Company. The absence of a competitive bidding process means that the government did not solicit offers from multiple potential suppliers. This approach is typically used when a specific contractor possesses unique capabilities, proprietary technology, or when urgency and existing relationships make competition impractical or disadvantageous. The lack of competition limits the government's ability to explore alternative solutions and potentially secure lower prices through market forces.

Taxpayer Impact: Taxpayers may not benefit from the potential cost savings that could arise from a competitive bidding process. Without competition, there is less pressure on the contractor to offer the most economical price.

Public Impact

The primary beneficiaries are the Department of the Air Force, which receives continued support for its aircraft manufacturing needs. Services delivered are recurring manufacturing support, crucial for maintaining operational readiness of aircraft fleets. The geographic impact is primarily centered around the contractor's facilities and the operational bases served by the Air Force. Workforce implications include continued employment for skilled labor within The Boeing Company's manufacturing and support divisions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Reliance on a single source for critical manufacturing services could pose supply chain risks.
Limited transparency into pricing due to sole-source award.

Positive Signals

Award to an established prime contractor with proven experience in aircraft manufacturing.
Fixed-price incentive contract type can incentivize performance and cost control.
Ensures continuity of essential services for Air Force operations.

Sector Analysis

The aircraft manufacturing sector is a cornerstone of the aerospace and defense industry, characterized by high barriers to entry, significant R&D investment, and long production cycles. This contract falls within the sustainment and support segment of aircraft manufacturing, which is vital for maintaining the operational readiness of military fleets. Spending in this area is often driven by the need for specialized expertise and proprietary knowledge held by original equipment manufacturers like Boeing. Comparable spending benchmarks are difficult to establish without more specific service details, but large-scale sustainment contracts are common within the Department of Defense.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. As a sole-source award to a large prime contractor, the direct opportunities for small businesses through this specific contract are likely limited. However, The Boeing Company may engage small businesses as subcontractors for components or specialized services, though this is not explicitly detailed here. The absence of a set-aside indicates a focus on the prime contractor's capabilities rather than fostering small business participation.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Accountability measures are embedded within the fixed-price incentive contract terms, which link payment to performance outcomes. Transparency is limited due to the sole-source nature of the award; however, contract modifications and performance reports are generally subject to internal review and potentially public disclosure through contract databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Aircraft Manufacturing Services
Aerospace Defense Contracts
Air Force Sustainment Programs
Fixed-Price Incentive Contracts
Sole-Source Defense Procurements

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns without competitive pressure

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $9.5 million to THE BOEING COMPANY. BBES OPTION YEAR VII RECURRING SERVICES.

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 $9.5 million.

What is the period of performance?

Start: 2026-01-01. End: 2026-12-31.

What is the historical spending pattern for recurring aircraft manufacturing services with The Boeing Company by the Department of the Air Force?

Analyzing historical spending requires access to detailed contract databases beyond the scope of this single award. However, The Boeing Company is a major defense contractor with a long history of providing aircraft and related services to the Air Force. Recurring services, such as sustainment, maintenance, and manufacturing support, often represent a significant portion of the total contract value over the lifecycle of an aircraft program. Past awards for similar services would likely show substantial, multi-year commitments, reflecting the ongoing operational needs of the Air Force's fleet. Without specific historical data for this particular service line, it's difficult to provide precise figures, but it is reasonable to assume consistent, significant investment in such critical support functions.

How does the pricing structure of this fixed-price incentive contract compare to other similar sole-source awards for aircraft manufacturing support?

A direct comparison of pricing structures for sole-source awards is challenging due to the proprietary nature of cost data and the unique specifications of each contract. Fixed-price incentive (FPI) contracts aim to share cost risks and rewards between the government and the contractor. The government sets a target cost and target profit, with a ceiling price. If the final cost is below the target, both parties share in the savings. If it exceeds the target, the contractor absorbs a portion of the overrun up to the ceiling. For sole-source contracts, the government negotiates the target cost and ceiling based on available data, historical performance, and market research. Without access to the negotiated targets, ceiling prices, and actual performance costs for this specific contract and comparable sole-source FPI contracts, a detailed pricing analysis is not feasible. However, the FPI structure itself indicates an attempt to achieve better value than a simple fixed-price contract by incentivizing efficiency.

What are the key performance indicators (KPIs) and associated incentives within this contract that influence its value for money?

The provided data indicates a 'Fixed Price Incentive' (FPI) contract type, which inherently includes performance incentives tied to cost and potentially other metrics. While specific KPIs are not detailed in the summary, typical indicators for aircraft manufacturing recurring services could include on-time delivery rates, quality defect rates, adherence to production schedules, and efficiency in resource utilization. The 'incentive' aspect means that The Boeing Company's profit is likely tied to meeting or exceeding these performance targets. For example, achieving a high on-time delivery rate or maintaining a low defect rate could result in a higher profit margin for Boeing, while failing to meet these could reduce their profit or even incur penalties depending on the contract's specific clauses. This structure aims to align the contractor's financial interests with the government's objectives for cost control and operational readiness, thereby enhancing value for money.

What is the track record of The Boeing Company in delivering similar recurring aircraft manufacturing services to the Department of Defense?

The Boeing Company has an extensive and long-standing track record of delivering aircraft and associated manufacturing, sustainment, and support services to the Department of Defense, including the Air Force. They are a primary manufacturer of numerous key Air Force platforms, such as the C-17 Globemaster III, KC-46 Pegasus, and B-52 bomber (in modernization programs). Their experience spans decades, encompassing complex manufacturing processes, supply chain management, and lifecycle support. While specific performance metrics for past contracts are not detailed here, Boeing's continued role as a prime contractor for major defense programs suggests a generally positive performance history and established capability in meeting the demanding requirements of military aviation.

Are there any identified risks associated with this sole-source contract, and what mitigation strategies are in place?

The primary risk associated with this sole-source contract is the potential for reduced price competition, which could lead to higher costs for the government compared to a competed contract. There's also a risk of vendor lock-in, where the government becomes highly dependent on a single supplier for critical services. Furthermore, without active competition, there might be less incentive for the contractor to innovate or aggressively pursue cost efficiencies. Mitigation strategies often employed by agencies in sole-source situations include rigorous negotiation of terms and pricing, establishing clear performance metrics and incentives (as seen with the FPI type), conducting thorough market research to ensure the negotiated price is fair and reasonable, and planning for future competition or alternative sourcing strategies where feasible. The Air Force would likely have internal review processes to validate the necessity and pricing of such sole-source awards.

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: FIXED PRICE INCENTIVE (L)

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: $18,826,585

Exercised Options: $18,826,585

Current Obligation: $9,486,097

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