Boeing awarded $28.5M for B-1/B-52 engineering, a sole-source contract with a 3-year duration

Contract Overview

Contract Amount: $28,471,245 ($28.5M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2023-02-07

End Date: 2026-03-16

Contract Duration: 1,133 days

Daily Burn Rate: $25.1K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: B-1/B-52 ENGINEERING ASSIGNMENT

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $28.5 million to THE BOEING COMPANY for work described as: B-1/B-52 ENGINEERING ASSIGNMENT Key points: 1. Contract awarded to a single, established provider, raising questions about competitive pricing. 2. The fixed-fee structure may incentivize cost control, but requires careful monitoring. 3. Performance history of the contractor will be critical to successful delivery. 4. This contract supports essential sustainment and modernization efforts for strategic bomber fleets. 5. The duration suggests a long-term need for specialized engineering expertise. 6. Geographic concentration of work in Oklahoma warrants attention for regional economic impact.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source engineering contract is challenging without comparable bids. The fixed-fee structure aims to control costs, but the total value of $28.5 million over three years for specialized aircraft engineering suggests a significant investment. Without competition, it's difficult to definitively assess if this represents optimal value for taxpayer dollars. Further analysis would require understanding the specific scope of work and comparing the labor rates and overhead to industry standards for similar engineering services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This typically occurs when only one contractor possesses the necessary specialized skills, technology, or security clearances. The lack of competition means there was no opportunity for price discovery through bidding, potentially leading to higher costs than if multiple firms had vied for the work. The justification for a sole-source award would need to be thoroughly reviewed to ensure it was appropriate.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to secure the best possible prices, potentially increasing the financial burden on taxpayers.

Public Impact

The primary beneficiaries are the U.S. Air Force and its strategic bomber fleet modernization and sustainment programs. Services delivered include specialized engineering support for the B-1 and B-52 aircraft. The geographic impact is concentrated in Oklahoma, where the contractor's facilities are located. Workforce implications include the utilization of highly skilled aerospace engineers and technicians.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source nature limits price competition.
Potential for cost overruns in fixed-fee contracts if scope is not tightly managed.
Dependence on a single contractor for critical engineering services.

Positive Signals

Awarded to a known, established contractor with a track record in aerospace.
Contract duration aligns with long-term sustainment needs.
Fixed-fee structure provides some cost predictability.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft manufacturing and sustainment engineering. The market for specialized engineering services for legacy military aircraft is often concentrated among a few key players due to the unique technical knowledge and security requirements involved. Comparable spending benchmarks would typically involve other sustainment contracts for major weapon systems, which can range from tens to hundreds of millions of dollars depending on the scope and duration.

Small Business Impact

This contract does not appear to include a small business set-aside. Given the specialized nature of engineering services for strategic aircraft, it is unlikely that small businesses would be primary awardees for the prime contract. However, the prime contractor, Boeing, may engage small businesses as subcontractors for specific components or services, though this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices within the Air Force. Accountability measures would be tied to the delivery order's performance requirements and milestones. Transparency is limited due to the sole-source nature, but contract awards are generally reported. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

B-1 Bomber Sustainment
B-52 Bomber Modernization
Aerospace Engineering Services
Department of Defense Aircraft Maintenance

Risk Flags

Sole-source award lacks competitive pricing.
Potential for cost overruns in CPFF contracts.
Dependence on a single contractor for critical sustainment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.5 million to THE BOEING COMPANY. B-1/B-52 ENGINEERING ASSIGNMENT

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 $28.5 million.

What is the period of performance?

Start: 2023-02-07. End: 2026-03-16.

What is the specific scope of engineering services required for the B-1/B-52 aircraft under this contract?

The provided data indicates this is a 'B-1/B-52 ENGINEERING ASSIGNMENT' awarded to The Boeing Company. While the specific scope is not detailed, it likely encompasses a range of activities critical for maintaining and potentially upgrading these strategic bomber platforms. This could include design modifications, structural analysis, systems engineering, technical data package updates, troubleshooting, and support for modifications or repairs. The contract type, Cost Plus Fixed Fee (CPFF), suggests that the contractor is reimbursed for allowable costs plus a fixed fee representing profit. The duration of over three years (February 2023 to March 2026) implies a substantial and ongoing requirement for these specialized engineering capabilities.

How does the $28.5 million contract value compare to historical spending on similar engineering services for these aircraft?

Direct comparison of the $28.5 million value to historical spending on similar engineering services for the B-1/B-52 requires access to detailed historical contract data. However, given the age and complexity of these aircraft, sustainment and engineering support are continuous and significant expenditures. Contracts for major weapon system sustainment can easily run into tens or hundreds of millions of dollars over their lifecycle. This $28.5 million delivery order, awarded in February 2023, represents a portion of the overall sustainment budget for these platforms. Without specific historical data points for comparable engineering assignments, it's difficult to definitively state if this value is high or low, but it aligns with the expected costs for specialized military aircraft engineering.

What are the key performance indicators (KPIs) or milestones associated with this contract?

The provided data does not explicitly list the Key Performance Indicators (KPIs) or specific milestones for this contract. However, for a Cost Plus Fixed Fee (CPFF) engineering services contract supporting military aircraft, typical KPIs would likely focus on adherence to schedule, technical performance, quality of deliverables (e.g., engineering reports, design changes), and effective cost management within the agreed-upon fixed fee. Milestones might include the completion of specific design reviews, the delivery of updated technical documentation, or the successful integration of engineering changes. The contracting officer's representative (COR) would be responsible for monitoring progress against these metrics.

What is Boeing's track record with the Department of Defense, particularly on B-1 and B-52 programs?

The Boeing Company has an extensive and long-standing track record with the Department of Defense, including significant involvement with both the B-1 Lancer and B-52 Stratofortress programs. Boeing has historically been a prime contractor for the sustainment, modification, and upgrade of these aircraft. Their deep institutional knowledge, established manufacturing capabilities, and security clearances make them a critical partner for the Air Force's bomber fleet. While specific performance metrics for past contracts are not detailed here, Boeing's continued role in supporting these vital assets suggests a generally positive or at least acceptable performance history in the eyes of the DoD.

What are the risks associated with a sole-source award for critical aircraft engineering services?

The primary risk associated with a sole-source award for critical aircraft engineering services is the lack of competitive pressure, which can lead to inflated prices and reduced incentive for innovation or efficiency. Taxpayers may end up paying more than necessary. Additionally, sole-source contracts can create vendor lock-in, making it difficult and costly to switch providers in the future. There's also a potential risk if the sole-source provider experiences financial difficulties or operational issues, as there are limited alternatives for immediate replacement. Ensuring robust oversight and clear performance expectations becomes even more crucial in sole-source situations.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA810718R0002

Pricing Type: COST PLUS FIXED FEE (U)

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: $29,120,519

Exercised Options: $29,073,548

Current Obligation: $28,471,245

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA810719D0001

IDV Type: IDC

Timeline