Boeing awarded $9.9M for engineering support of multiple aircraft platforms by the Air Force

Contract Overview

Contract Amount: $9,941,024 ($9.9M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2021-10-26

End Date: 2027-01-31

Contract Duration: 1,923 days

Daily Burn Rate: $5.2K/day

Competition Type: NOT COMPETED

Pricing Type: COST NO FEE

Sector: Defense

Official Description: ENGINEERING SUPPORT SERVICES FOR MULTIPLE AIRCRAFT PLATFORMS.

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $9.9 million to THE BOEING COMPANY for work described as: ENGINEERING SUPPORT SERVICES FOR MULTIPLE AIRCRAFT PLATFORMS. Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Long-term contract duration (over 5 years) suggests a need for sustained support. 3. Cost-plus-fixed-fee contract type may incentivize cost overruns. 4. Focus on engineering services for aircraft platforms indicates a critical defense need. 5. Geographic location in Oklahoma may have local economic implications. 6. No small business set-aside indicates potential for large prime contractor benefits.

Value Assessment

Rating: fair

The contract's value of $9.9 million for engineering support services over approximately five years appears reasonable given the complexity of supporting multiple aircraft platforms. However, without specific details on the scope of work and deliverables, a precise value-for-money assessment is challenging. Benchmarking against similar sole-source engineering support contracts for complex defense systems would be necessary for a more definitive evaluation. The cost-plus-fixed-fee structure warrants careful monitoring to ensure costs remain controlled.

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 specialized capabilities, proprietary knowledge, or when urgency dictates. The lack of competition means that price discovery through market forces was not utilized, potentially leading to higher costs for the government compared to a competitively bid contract.

Taxpayer Impact: The absence of competition means taxpayers may not have received the benefit of the lowest possible price that could have been achieved through a bidding process. This can result in a less efficient use of public funds.

Public Impact

The U.S. Air Force benefits from continued engineering support for its aircraft fleets. Maintenance and sustainment of critical defense assets are ensured. The contract supports specialized engineering jobs within the aerospace sector. Operations in Oklahoma are likely to see economic benefits from this contract. The defense industrial base's capacity for aircraft engineering is maintained.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing, potentially increasing costs for taxpayers.
Cost-plus-fixed-fee contract type can incentivize higher spending if not closely managed.
Long contract duration requires sustained oversight to ensure performance and value.
Lack of small business participation may limit opportunities for smaller firms in the supply chain.

Positive Signals

Addresses critical engineering support needs for essential Air Force aircraft platforms.
Boeing's established expertise in aerospace engineering provides a strong foundation for performance.
Contract duration ensures continuity of support, vital for maintaining operational readiness.
The contract is located in Oklahoma, potentially supporting regional economic development.

Sector Analysis

This contract falls within the aerospace and defense engineering services sector. This sector is characterized by high technical expertise, long product lifecycles, and significant government investment. The market is dominated by a few large prime contractors, like Boeing, who possess the scale and specialized knowledge required for complex defense systems. Spending in this area is crucial for maintaining national security and technological superiority, with contracts often being long-term and awarded through specialized procurement processes.

Small Business Impact

The contract was not set aside for small businesses, and the data indicates no small business participation (sb: false). This means the primary contract is with a large prime contractor, The Boeing Company. While this ensures access to extensive resources and expertise, it also means that opportunities for small businesses to directly benefit from this specific award are limited. Subcontracting opportunities may exist, but their extent and accessibility to small businesses are not detailed in this 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 sole-source nature and cost-plus-fixed-fee structure, rigorous oversight of expenditures, performance metrics, and adherence to contract terms is crucial. The Inspector General's office for the Department of Defense would have jurisdiction for audits and investigations into potential fraud, waste, or abuse. Transparency is facilitated through contract databases, but detailed performance reports are typically internal.

Related Government Programs

Aircraft Maintenance and Repair Services
Aerospace Engineering and Design Services
Defense Logistics Support
Air Force Weapon Systems Support
Government Engineering Contracts

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Potential for cost overruns
Limited transparency on specific deliverables

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $9.9 million to THE BOEING COMPANY. ENGINEERING SUPPORT SERVICES FOR MULTIPLE AIRCRAFT PLATFORMS.

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 $9.9 million.

What is the period of performance?

Start: 2021-10-26. End: 2027-01-31.

What is Boeing's track record with similar sole-source engineering support contracts for the Air Force?

Boeing has a long history of providing engineering support services to the U.S. Air Force across various aircraft platforms. Their track record with sole-source contracts often stems from unique expertise, proprietary data, or the need for continuity on complex, long-term programs. While specific details on past sole-source contracts are not provided here, Boeing's extensive experience in defense contracting suggests a familiarity with the requirements and oversight associated with such awards. Performance on previous contracts, including adherence to schedule, budget, and technical specifications, would be a key factor in the Air Force's decision to award this contract without competition. Historical data on contract modifications, cost variances, and any disputes or penalties associated with Boeing's sole-source agreements would offer further insight into their reliability and performance in similar situations.

How does the $9.9 million contract value compare to other engineering support contracts for aircraft platforms?

The $9.9 million value for this five-year engineering support contract for multiple aircraft platforms appears to be on the lower end for major defense contracts of this nature. Large-scale, long-term engineering support for complex weapon systems can often run into tens or hundreds of millions of dollars. For instance, sustainment contracts for major fighter or bomber fleets typically involve significantly higher figures. This contract's value might reflect a specific, limited scope of engineering services, a focus on particular aircraft types, or perhaps it represents only a portion of a larger overall support program. Benchmarking against contracts for similar aircraft types or specific engineering disciplines (e.g., structural integrity, avionics support) would provide a more precise comparison. The sole-source nature also means it wasn't optimized for price through competition, which could influence its relative value.

What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract for engineering services?

The primary risks associated with this contract structure are twofold. Firstly, the sole-source award eliminates the competitive pressure that typically drives down prices. This means the government may pay more than it would in a fully competed scenario, as there's less incentive for the contractor to offer the most cost-effective solution. Secondly, the Cost-Plus-Fixed-Fee (CPFF) pricing arrangement, while covering allowable costs plus a fixed fee, can create an incentive for the contractor to incur higher costs. If costs increase, the contractor's fixed fee remains the same, but their profit margin on that fee can be eroded. This might subtly encourage less stringent cost control than a fixed-price contract. Effective oversight, detailed cost tracking, and clear performance metrics are essential to mitigate these risks and ensure value for taxpayer money.

How effective is the Air Force in ensuring value for money on sole-source contracts like this one?

The Air Force employs several mechanisms to ensure value for money on sole-source contracts, though inherent challenges exist due to the lack of competition. These mechanisms include robust negotiation processes, reliance on independent cost estimates, and stringent oversight of contractor performance and expenditures. For CPFF contracts, detailed auditing of costs and verification of the necessity and reasonableness of expenses are critical. The Air Force also utilizes contract clauses that may include incentive fees or penalties tied to performance metrics. However, the absence of competitive bidding remains a fundamental limitation. The effectiveness ultimately depends on the skill of the contracting officers, the thoroughness of the oversight, and the transparency of the contractor's cost reporting. Continuous monitoring and performance evaluations are key to maximizing value.

What is the historical spending trend for engineering support services for aircraft platforms by the Department of Defense?

Historical spending by the Department of Defense (DoD) on engineering support services for aircraft platforms has consistently been substantial, reflecting the complexity and lifecycle costs of military aviation. These services are critical for maintaining the readiness and operational effectiveness of the Air Force, Navy, and Marine Corps fleets. Spending trends are influenced by factors such as the introduction of new aircraft, modernization programs for existing fleets, and the overall geopolitical security environment. While specific figures fluctuate annually, the DoD consistently allocates billions of dollars towards sustainment, upgrades, and technical support for its vast aircraft inventory. Contracts like the one awarded to Boeing are part of this ongoing, significant investment in aerospace engineering capabilities.

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: $9,941,024

Exercised Options: $9,941,024

Current Obligation: $9,941,024

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