Boeing awarded $45.6M for C32/C40 aircraft fleet logistics support by DoD

Contract Overview

Contract Amount: $45,560,147 ($45.6M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2024-03-01

End Date: 2024-02-24

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CONTRACTOR LOGISTICS SUPPORT FOR C32/C40 AIRCRAFT FLEET

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $45.6 million to THE BOEING COMPANY for work described as: CONTRACTOR LOGISTICS SUPPORT FOR C32/C40 AIRCRAFT FLEET Key points: 1. Contract provides essential logistics support for critical government aircraft. 2. Full and open competition suggests a potentially competitive pricing environment. 3. Fixed-price contract type shifts performance risk to the contractor. 4. Contractor's extensive experience in aerospace likely positions them well for this work. 5. Support activities for air transportation are vital for fleet readiness. 6. Geographic location in Oklahoma may indicate a specific operational hub.

Value Assessment

Rating: good

The contract value of $45.6 million for logistics support of C32/C40 aircraft appears reasonable given the specialized nature of military aviation. Benchmarking against similar contracts for fleet support is challenging without more specific details on the scope of services. However, the firm fixed-price structure suggests that the government has negotiated a definitive price, which is generally favorable for cost control. The contractor, Boeing, is a major aerospace manufacturer with a long history of supporting government aircraft, implying a level of expertise that justifies the investment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited and considered. This approach is designed to foster a competitive environment, which typically leads to better pricing and value for the government. The specific number of bidders is not provided, but the designation suggests a robust competition process was followed, allowing for a wide range of potential contractors to participate and present their proposals.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through market forces, ensuring the government receives the best possible value for its investment in essential services.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel who rely on the operational readiness of the C32/C40 aircraft fleet. Services delivered include crucial logistics support, ensuring aircraft availability and mission capability. The geographic impact is centered around the operational bases and maintenance facilities where the C32/C40 fleets are stationed, with a specific mention of Oklahoma. Workforce implications include the potential for skilled aviation mechanics, logistics specialists, and support staff employed by the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen technical issues arise with aging aircraft.
Dependence on a single large contractor could create supply chain vulnerabilities.
Ensuring adequate performance metrics are met to guarantee fleet readiness.

Positive Signals

Boeing's established expertise in aircraft manufacturing and support.
Firm fixed-price contract aligns incentives for cost control.
Full and open competition promotes market-driven pricing.
Essential nature of the service ensures high priority for funding and oversight.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex technological requirements, and significant government procurement. Logistics support for military aircraft is a critical sub-segment, demanding specialized knowledge, stringent quality control, and adherence to regulatory standards. This contract fits within the broader category of aviation services and defense sustainment, where major players like Boeing hold substantial market share due to their integrated capabilities and long-standing relationships with government agencies. Comparable spending benchmarks would typically involve analyzing other sustainment contracts for similar aircraft types or fleet sizes within the DoD.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting requirements for small businesses. As a large contract awarded to a major prime contractor, the primary focus is on the prime's ability to deliver. However, large defense contracts often involve a significant portion of work being subcontracted, and it is possible that small businesses could be involved in the supply chain or specialized support roles. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The firm fixed-price nature of the contract provides a degree of accountability by placing financial risk on the contractor. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Aircraft Maintenance and Repair
Defense Logistics Support
Government Aviation Services
Fleet Readiness Programs
Air Transportation Services

Risk Flags

Potential for supply chain disruptions
Risk of unforeseen maintenance costs on aging aircraft
Dependence on a single prime contractor for critical support

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $45.6 million to THE BOEING COMPANY. CONTRACTOR LOGISTICS SUPPORT FOR C32/C40 AIRCRAFT FLEET

Who is the contractor on this award?

The obligated recipient is THE BOEING COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $45.6 million.

What is the period of performance?

Start: 2024-03-01. End: 2024-02-24.

What is the historical spending pattern for contractor logistics support for the C32/C40 aircraft fleet?

Analyzing historical spending for this specific contract requires access to historical contract data for the C32/C40 fleet's logistics support. Without direct historical data for this particular contract vehicle, we can infer general trends. The C32 (Boeing 757) and C40 (Boeing 737 variant) are established platforms within the government fleet. Their sustainment and logistics support would have been ongoing for years. Spending would likely fluctuate based on fleet size, operational tempo, and modernization efforts. Given the age of some C32 airframes, maintenance and parts procurement could represent a significant portion of the logistics costs. The current $45.6 million award suggests a substantial, but not unprecedented, level of investment for comprehensive support over its period of performance. A detailed historical analysis would involve aggregating all previous contracts related to the sustainment of these specific aircraft types from the Department of Defense.

How does the pricing of this contract compare to similar logistics support contracts for government aircraft?

Directly comparing the pricing of this $45.6 million contract to similar logistics support contracts is challenging without detailed scope-of-work and performance metrics for comparable agreements. However, the firm fixed-price (FFP) nature of this contract is a positive indicator for value, as it shifts performance risk to the contractor and provides cost certainty for the government. The fact that it was awarded under full and open competition suggests that market forces were leveraged to achieve competitive pricing. Generally, FFP contracts with robust competition tend to offer better value than cost-plus contracts or those awarded through limited competition. The contractor, Boeing, being the original manufacturer, may also offer efficiencies in parts sourcing and technical expertise, potentially leading to more favorable pricing than a third-party support provider.

What are the key performance indicators (KPIs) expected for this logistics support contract, and how are they monitored?

While specific KPIs are not detailed in the provided data, typical performance indicators for aircraft logistics support contracts include metrics related to aircraft availability, response times for maintenance and parts, turnaround times for repairs, and the quality of services provided. For the C32/C40 fleet, key metrics would likely focus on maintaining a high operational readiness rate, ensuring timely delivery of spare parts, and minimizing aircraft downtime for scheduled and unscheduled maintenance. The Defense Contract Management Agency (DCMA) is responsible for monitoring contractor performance. They would likely use a combination of site visits, performance reports submitted by the contractor, and direct observation of operations to ensure compliance with the contract's requirements and KPIs. Failure to meet these KPIs could result in contractual remedies, including potential financial penalties or termination.

What is the track record of The Boeing Company in providing logistics support for government aviation programs?

The Boeing Company has an extensive and well-established track record in providing logistics support for a wide array of government aviation programs, both domestically and internationally. As a primary manufacturer of many military and government aircraft, Boeing possesses deep institutional knowledge of their systems, maintenance requirements, and operational needs. Their support often encompasses the entire lifecycle of an aircraft, from initial fielding through sustainment and eventual retirement. This includes providing spare parts, technical data, maintenance services, engineering support, and training. Boeing has supported numerous government fleets, including various transport aircraft, bombers, fighters, and specialized mission aircraft. Their long history and significant presence in the defense sector indicate a high level of experience and capability in fulfilling complex logistics requirements for government aviation assets.

What are the potential risks associated with this contract, and what mitigation strategies are in place?

Potential risks for this contract include supply chain disruptions for critical parts, unforeseen technical issues with aging aircraft requiring extensive repairs, and potential cost increases if the firm fixed-price contract does not adequately account for all eventualities. Performance risks also exist, such as the contractor failing to meet availability or response time targets. Mitigation strategies likely involve robust contract oversight by the DCMA, clear performance standards and remedies outlined in the contract, and potentially requiring Boeing to maintain specific inventory levels or have contingency plans for supply chain issues. The firm fixed-price structure itself acts as a mitigation for cost overruns, placing that risk on Boeing. Furthermore, Boeing's extensive experience and established infrastructure are inherent risk-reduction factors.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

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: $47,491,212

Exercised Options: $45,560,147

Current Obligation: $45,560,147

Subaward Activity

Number of Subawards: 15

Total Subaward Amount: $29,119,134

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA813423DB004

IDV Type: IDC

Timeline