Boeing Secures $37M E-4B Contractor Logistic Support Contract from Air Force
Contract Overview
Contract Amount: $37,080,730 ($37.1M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2023-01-27
End Date: 2025-11-30
Contract Duration: 1,038 days
Daily Burn Rate: $35.7K/day
Competition Type: NOT COMPETED
Pricing Type: COST NO FEE
Sector: Defense
Official Description: ENGINE ORDER ON E-4B CONTRACTOR LOGISTIC SUPPORT CONTRACT
Place of Performance
Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135
State: Oklahoma Government Spending
Plain-Language Summary
Department of Defense obligated $37.1 million to THE BOEING COMPANY for work described as: ENGINE ORDER ON E-4B CONTRACTOR LOGISTIC SUPPORT CONTRACT Key points: 1. Significant contract awarded to a single, established aerospace manufacturer. 2. Focus on critical aircraft support highlights specialized needs. 3. Potential for cost overruns due to 'Cost No Fee' structure. 4. Limited competition raises questions about price discovery and value.
Value Assessment
Rating: questionable
The 'Cost No Fee' (CNF) contract type offers no incentive for the contractor to control costs, potentially leading to higher overall spending. Benchmarking is difficult without detailed cost breakdowns, but CNF contracts often result in higher prices compared to fixed-price or cost-plus-incentive-fee arrangements.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. The lack of competition limits the government's ability to leverage market forces to achieve the best possible price and value. This approach is typically used when only one source can provide the required goods or services.
Taxpayer Impact: The absence of competition means taxpayers may not be receiving the most cost-effective solution, as there was no pressure on the contractor to offer competitive pricing.
Public Impact
Ensures continued operational readiness of the E-4B 'Doomsday Plane'. Supports a critical national security asset with specialized maintenance. Potential for taxpayer funds to be spent without competitive price validation.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost No Fee contract type
- Sole-source award
- Lack of competition
Positive Signals
- Supports critical national security asset
- Experienced contractor
- Long-term support planned
Sector Analysis
The aerospace and defense sector often involves complex, high-value contracts for specialized equipment and support. Spending benchmarks for contractor logistic support can vary widely based on aircraft type, age, and required services. This contract falls within the typical range for specialized aircraft sustainment.
Small Business Impact
This contract was awarded to The Boeing Company, a large prime contractor. There is no indication of subcontracting opportunities for small businesses within the provided data, suggesting limited direct impact on the small business sector for this specific award.
Oversight & Accountability
The 'Cost No Fee' structure requires robust oversight to ensure that costs incurred by the contractor are reasonable and allocable, even without a direct profit incentive tied to cost control. The Air Force must diligently monitor expenditures to mitigate potential overspending.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Cost No Fee contract type
- Sole-source award
- Lack of competition
- Potential for cost overruns
- Limited transparency on pricing
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, ok, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $37.1 million to THE BOEING COMPANY. ENGINE ORDER ON E-4B CONTRACTOR LOGISTIC 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 $37.1 million.
What is the period of performance?
Start: 2023-01-27. End: 2025-11-30.
What is the justification for awarding this contract sole-source, and what steps are being taken to ensure fair pricing without competition?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent requirements where only one source can fulfill the need. To ensure fair pricing, the government should conduct thorough cost realism analyses, benchmark against similar contracts, and negotiate aggressively on labor rates and material costs. Robust oversight is crucial to validate all incurred expenses.
What are the specific risks associated with the 'Cost No Fee' contract type in this context?
The primary risk of a 'Cost No Fee' (CNF) contract is the lack of contractor incentive to control costs. The government bears all the cost risk, and the contractor is reimbursed for allowable costs without a profit margin. This can lead to inflated costs if not meticulously monitored, as the contractor has no direct financial motivation to be efficient or economical.
How will the effectiveness of this logistic support contract be measured, particularly given the lack of performance incentives?
Effectiveness will be measured through key performance indicators (KPIs) related to aircraft availability, response times for support requests, quality of maintenance, and adherence to schedules. Despite the CNF structure, the contract likely includes performance standards and service level agreements that the Air Force will monitor. Failure to meet these standards could trigger contractual remedies or future sourcing decisions.
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: $37,080,730
Exercised Options: $37,080,730
Current Obligation: $37,080,730
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
Start Date: 2023-01-27
Current End Date: 2025-11-30
Potential End Date: 2025-11-30 00:00:00
Last Modified: 2025-01-23
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