Boeing awarded $33.7M for avionics engineering services, a sole-source contract with a long performance period

Contract Overview

Contract Amount: $33,724,240 ($33.7M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2021-03-05

End Date: 2025-12-10

Contract Duration: 1,741 days

Daily Burn Rate: $19.4K/day

Competition Type: NOT COMPETED

Pricing Type: COST NO FEE

Sector: Defense

Official Description: ENGINEERING SERVICES FOR THE AVIONICS SYSTEM UPDATE.

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: ENGINEERING SERVICES FOR THE AVIONICS SYSTEM UPDATE. Key points: 1. The contract's value of $33.7 million over nearly six years suggests a significant investment in avionics system upgrades. 2. As a sole-source award, the lack of competition may limit price negotiation advantages for the government. 3. The 'OK' status for both 'st' (status) and 'sn' (state) indicates no immediate red flags in contract administration. 4. The contract type 'COST NO FEE' implies the government bears the cost of performance, with the contractor receiving no fee. 5. The extended duration of 1741 days (approx. 4.7 years) necessitates careful monitoring of performance and cost overruns.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without comparable sole-source avionics engineering services. The 'COST NO FEE' contract type means the government is primarily responsible for covering all allowable costs incurred by the contractor. While this can be beneficial if costs are well-managed, it shifts the risk of cost overruns to the government. The total award amount of $33.7 million for nearly five years of service needs to be evaluated against the scope and complexity of the avionics system updates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, technology, or security clearances. The lack of competition means the government did not benefit from a bidding process that could drive down prices through market forces. The justification for a sole-source award would need to be thoroughly documented to ensure it was appropriate.

Taxpayer Impact: Taxpayers may not have received the best possible price due to the absence of competitive bidding. The government's ability to negotiate favorable terms is reduced in sole-source situations.

Public Impact

The primary beneficiaries are the Department of the Air Force, which will receive updated avionics systems for its aircraft. The services delivered include engineering expertise crucial for modernizing complex aviation technology. The geographic impact is likely concentrated around the contractor's facilities and Air Force bases where the avionics systems are installed or tested. This contract supports specialized engineering jobs within the aerospace and defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
The 'COST NO FEE' contract type places cost control risk on the government.
Long performance period increases the potential for scope creep and cost overruns if not managed diligently.

Positive Signals

The contract is with a well-established aerospace company, The Boeing Company, suggesting a high likelihood of technical capability.
The 'OK' status for contract administration and state suggests a stable operational environment.
The focus on engineering services for avionics updates indicates a critical modernization effort for defense capabilities.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on engineering services for avionics systems. The market for such specialized engineering is often dominated by a few large, experienced contractors due to the high technical barriers to entry and stringent security requirements. Comparable spending in this area can vary widely depending on the specific aircraft platforms and the complexity of the avionics upgrades required. The total award of $33.7 million over nearly five years is a substantial investment, reflecting the critical nature of avionics in modern military aircraft.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Given the specialized nature of avionics engineering services and the sole-source award to a large prime contractor like Boeing, it is unlikely that significant subcontracting opportunities for small businesses will be mandated within this specific contract. However, Boeing may engage small businesses for specific components or support services as part of its broader supply chain, though this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Given the 'COST NO FEE' structure, rigorous oversight of incurred costs and contractor performance is essential to prevent overspending. Transparency is facilitated through contract reporting mechanisms, though the sole-source nature limits public visibility into the competitive process. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Avionics Modernization Programs
Aircraft Systems Engineering Support
Defense Contract Management
Air Force Procurement

Risk Flags

Sole-source award may indicate limited competition.
Cost-reimbursement nature requires robust government cost oversight.
Long performance period increases risk of scope creep and cost escalation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.7 million to THE BOEING COMPANY. ENGINEERING SERVICES FOR THE AVIONICS SYSTEM UPDATE.

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 $33.7 million.

What is the period of performance?

Start: 2021-03-05. End: 2025-12-10.

What is the specific avionics system being updated, and what is the expected improvement in performance or capability?

The provided data does not specify the exact avionics system undergoing updates or the precise performance improvements expected. The description 'ENGINEERING SERVICES FOR THE AVIONICS SYSTEM UPDATE' is general. To assess the value and impact, further details on the targeted aircraft, the nature of the upgrades (e.g., navigation, communication, sensor integration), and the anticipated benefits (e.g., enhanced safety, reduced pilot workload, improved mission effectiveness, compliance with new regulations) would be necessary. This information is typically found in the contract's statement of work or technical exhibits.

What was the justification for awarding this contract on a sole-source basis?

The justification for a sole-source award is not provided in the data. Typically, sole-source contracts are justified under specific circumstances outlined in federal acquisition regulations, such as the existence of only one responsible source, a public exigency, or a treaty or international agreement. For a large, complex system like avionics, the justification might stem from proprietary technology, unique contractor expertise, or the need for seamless integration with existing platforms where only one vendor can provide the required solution. A formal Justification for Other Than Full and Open Competition (JOFOC) document would normally detail this rationale.

How does the 'COST NO FEE' contract type impact risk and oversight compared to other contract types?

The 'COST NO FEE' (CNF) contract type places the financial risk of cost overruns primarily on the government. The contractor is reimbursed for all allowable costs incurred in performing the contract but receives no additional fee or profit. This contrasts with fixed-price contracts, where the contractor assumes more risk for cost overruns, or cost-plus-fee contracts, where the contractor receives a fee in addition to costs. For oversight, CNF requires diligent monitoring of the contractor's costs to ensure they are reasonable, allocable, and allowable. The government must actively manage the scope and ensure efficient performance to control expenditures, as there is less incentive for the contractor to minimize costs beyond what is necessary for performance.

What is the historical spending pattern for similar avionics engineering services by the Department of the Air Force?

The provided data does not include historical spending patterns for similar contracts. To establish a benchmark, one would need to analyze past contracts awarded by the Department of the Air Force (or DoD broadly) for avionics engineering services, considering factors like contract type, duration, scope, and the specific aircraft platforms involved. Analyzing trends in spending, average award values, and the prevalence of sole-source versus competitive awards for similar services would provide valuable context for assessing the current $33.7 million award. This type of analysis often requires access to comprehensive contract databases and analytical tools.

What are the potential risks associated with the long performance period (nearly 5 years)?

A long performance period, such as the nearly five years for this contract (1741 days), introduces several potential risks. Firstly, the risk of scope creep increases, where the requirements may evolve or expand beyond the original intent, leading to increased costs and delays. Secondly, maintaining consistent oversight and contract management over an extended period can be challenging, potentially leading to complacency or reduced vigilance. Thirdly, technological obsolescence is a risk; avionics technology evolves rapidly, and a system updated over several years might be partially outdated by its completion. Finally, contractor performance stability and key personnel retention can become issues over such a long duration, potentially impacting the quality and timeliness of deliverables.

What is the track record of The Boeing Company in delivering complex avionics engineering services?

The Boeing Company has a long and extensive track record in delivering complex avionics systems and engineering services for a wide range of military and commercial aircraft. As one of the world's largest aerospace manufacturers, Boeing has been involved in the design, development, integration, and sustainment of sophisticated avionics suites for platforms such as fighter jets, bombers, transport aircraft, and helicopters. Their experience spans decades and includes numerous modernization programs. While specific performance metrics for this particular contract are not available, Boeing's general reputation and history suggest a high capability to undertake and execute complex avionics engineering tasks, though like any large contractor, they may have faced specific challenges on individual programs.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST NO FEE (S)

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: $33,724,240

Exercised Options: $33,724,240

Current Obligation: $33,724,240

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $21,748,154

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA810617D0002

IDV Type: IDC

Timeline