Boeing receives $18.6M delivery order for E4B aircraft logistics support from the Air Force

Contract Overview

Contract Amount: $18,647,763 ($18.6M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2022-09-30

End Date: 2026-09-30

Contract Duration: 1,461 days

Daily Burn Rate: $12.8K/day

Competition Type: NOT COMPETED

Pricing Type: COST NO FEE

Sector: Defense

Official Description: SPARES ORDER FOR E4B AIRCRAFT ON CONTRACTOR LOGISTICS SUPPORT CONTRACT

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $18.6 million to THE BOEING COMPANY for work described as: SPARES ORDER FOR E4B AIRCRAFT ON CONTRACTOR LOGISTICS SUPPORT CONTRACT Key points: 1. This order represents a significant investment in maintaining the operational readiness of the E4B fleet. 2. The contractor, Boeing, has a long-standing relationship with the Department of Defense, suggesting established expertise. 3. The 'NOT COMPETED' status raises questions about potential cost efficiencies and market alternatives. 4. The contract duration of approximately four years indicates a sustained need for these support services. 5. Focus on contractor logistics support highlights the complexity and specialized nature of maintaining advanced aircraft. 6. The absence of small business subcontracting goals warrants further investigation into potential impacts on smaller enterprises.

Value Assessment

Rating: fair

Benchmarking the value of this specific delivery order is challenging without comparable contract data for E4B contractor logistics support. The 'COST NO FEE' pricing structure, while common in certain defense contracts, can make direct value-for-money assessments difficult as it relies heavily on the contractor's cost management. Further analysis would require understanding the specific services included and comparing them to industry standards for similar aircraft support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This delivery order was issued on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities, proprietary knowledge, or when urgency dictates a rapid award. The lack of competition means that pricing and service levels were not tested against market alternatives, potentially limiting price discovery and negotiation leverage.

Taxpayer Impact: For taxpayers, sole-source awards can sometimes lead to higher costs compared to competitively bid contracts, as the government may not benefit from the cost savings that competition can drive.

Public Impact

The primary beneficiaries are the U.S. Air Force and its operational readiness, ensuring the E4B fleet remains functional. Services delivered include contractor logistics support, crucial for maintaining complex aircraft systems. The geographic impact is likely concentrated around E4B operational bases and maintenance facilities. Workforce implications include the potential for continued employment of specialized technical personnel at Boeing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs for taxpayers.
Sole-source award limits transparency in pricing and service benchmarks.
No explicit small business subcontracting goals may reduce opportunities for smaller firms.

Positive Signals

Boeing's established relationship suggests continuity and expertise in supporting the E4B.
The contract duration indicates a stable and predictable support environment.
Focus on logistics support ensures critical aircraft remain operational.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex supply chains, and significant government investment. Contracts for specialized aircraft support, like that for the E4B, are often awarded to original equipment manufacturers or highly specialized firms due to unique technical requirements and intellectual property. The total addressable market for such niche support services can be substantial, but individual contracts are often awarded on a sole-source or limited-competition basis.

Small Business Impact

This contract does not appear to include specific small business set-aside provisions or explicit subcontracting goals. As a sole-source award to a large prime contractor, the opportunities for small businesses to directly participate in this specific contract may be limited unless Boeing proactively includes them in its subcontracting efforts. Further review of Boeing's overall subcontracting plan would be necessary to assess the broader impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures are typically embedded within the contract's terms and conditions, including performance metrics and payment schedules. Transparency may be limited due to the sole-source nature of the award, but contract modifications and performance reports are generally subject to internal review and potentially Inspector General oversight.

Related Government Programs

E4B Aircraft Sustainment Programs
Aerospace Contractor Logistics Support
Department of Defense Aircraft Maintenance Contracts
Air Force Special Mission Aircraft Support

Risk Flags

Sole-source award may lead to higher costs.
Lack of competition limits price discovery.
Potential for contractor complacency due to no competition.
Dependence on a single supplier for critical support.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.6 million to THE BOEING COMPANY. SPARES ORDER FOR E4B AIRCRAFT ON CONTRACTOR LOGISTICS SUPPORT CONTRACT

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 $18.6 million.

What is the period of performance?

Start: 2022-09-30. End: 2026-09-30.

What is the historical spending trend for contractor logistics support for the E4B aircraft program?

Analyzing historical spending for E4B contractor logistics support requires access to detailed contract databases and historical award data. Without specific figures, it's difficult to establish a precise trend. However, such specialized support contracts typically represent a consistent, albeit fluctuating, expenditure over the life cycle of an aircraft program. Factors influencing spending include the aircraft's age, operational tempo, technological upgrades, and the availability of organic (in-house) support capabilities within the Air Force. A sustained need for logistics support, as indicated by this new delivery order, suggests that historical spending has been significant and is likely to continue.

How does the pricing structure ('COST NO FEE') for this contract compare to industry benchmarks for similar services?

The 'COST NO FEE' (CNF) pricing structure means the contractor is reimbursed for allowable costs but receives no fee or profit. This structure is often used in situations where the scope of work is uncertain or difficult to define upfront, or when the government has significant leverage and wants to minimize contractor profit. Benchmarking CNF contracts is complex because the 'value' is primarily in cost control by the contractor, rather than a negotiated profit margin. Industry benchmarks typically focus on fixed-price or cost-plus-incentive-fee contracts where profit is a key component. For CNF, the benchmark would be the contractor's ability to manage costs effectively and deliver the required support within the estimated cost parameters, which is harder to quantify externally without detailed cost breakdowns.

What are the specific risks associated with a sole-source award for critical aircraft support?

Sole-source awards for critical aircraft support carry several risks. Firstly, the lack of competition can lead to inflated prices, as the government does not benefit from the downward pressure that multiple bidders would typically exert. Secondly, there's a risk of complacency from the contractor, who may face less incentive to innovate or improve efficiency without competitive threats. Thirdly, dependence on a single supplier can create vulnerabilities; if the contractor experiences financial difficulties, operational issues, or decides to exit the market, the government may struggle to find an alternative provider quickly, potentially impacting mission readiness. Finally, transparency in cost and performance can be reduced, making oversight more challenging.

What is the expected impact of this contract on the operational readiness of the E4B fleet?

This delivery order is expected to have a positive impact on the operational readiness of the E4B fleet by ensuring the continued availability of essential contractor logistics support. The E4B aircraft are highly specialized and require continuous maintenance, repair, and logistical services to remain mission-capable. By securing this support through Boeing, the Air Force aims to mitigate risks associated with aircraft downtime, ensure timely access to spare parts, and maintain the complex systems onboard. This sustained support is critical for the E4B's role in strategic command and control, underscoring the importance of this contract for national security.

Are there any performance metrics or key performance indicators (KPIs) associated with this contract to ensure contractor accountability?

While the specific performance metrics and KPIs for this delivery order are not detailed in the provided data, defense contracts of this nature typically include such clauses to ensure contractor accountability. These often relate to response times for support requests, availability of spare parts, quality of repair work, and adherence to maintenance schedules. The 'COST NO FEE' structure implies that the government is primarily concerned with the contractor managing costs effectively while meeting defined performance standards. Failure to meet these KPIs could result in contract remedies, although the specifics would be outlined in the full contract documentation.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

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: $18,647,763

Exercised Options: $18,647,763

Current Obligation: $18,647,763

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA810616D0002

IDV Type: IDC

Timeline