Boeing awarded $55.8M for B-1/B-52 engineering services, a sole-source contract

Contract Overview

Contract Amount: $55,782,314 ($55.8M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2022-11-15

End Date: 2026-02-27

Contract Duration: 1,200 days

Daily Burn Rate: $46.5K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: B-1/B-52 ENGINEERING SERVICES (BBES)

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $55.8 million to THE BOEING COMPANY for work described as: B-1/B-52 ENGINEERING SERVICES (BBES) Key points: 1. Contract awarded to a single, established provider, raising questions about competitive pricing. 2. Long-term contract duration suggests a need for sustained engineering support. 3. Cost-plus contract type may incentivize higher spending without strict cost controls. 4. Focus on bomber aircraft engineering indicates critical defense sustainment requirements. 5. Geographic location in Oklahoma may point to specific operational or maintenance hubs.

Value Assessment

Rating: questionable

The contract's value of $55.8 million over approximately four years for engineering services requires careful benchmarking. As a sole-source award, direct comparisons to similar competitively bid contracts are difficult. The cost-plus fixed fee structure, while common for complex services, can lead to cost overruns if not managed diligently. Without competitive pressure, the pricing may not reflect the most economical option available in the market.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, The Boeing Company, was solicited. This approach bypasses the typical competitive bidding process, which usually involves multiple companies vying for the contract. While sole-source awards can be justified for unique capabilities or urgent needs, they limit price discovery and potentially increase costs for the government.

Taxpayer Impact: The lack of competition means taxpayers may not benefit from the cost savings typically achieved through a bidding process, potentially leading to a higher overall expenditure for these essential engineering services.

Public Impact

The primary beneficiaries are the U.S. Air Force and its bomber fleet, ensuring continued operational readiness. Services include engineering support, sustainment, and potentially upgrades for the B-1 and B-52 aircraft. The contract's impact is concentrated in Oklahoma, where the work is being performed. This contract supports highly skilled engineering jobs within the aerospace sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost-plus contract type can lead to higher costs if not managed effectively.
Long contract duration may obscure potential for cost efficiencies over time.

Positive Signals

Awarded to a prime contractor with established expertise in bomber aircraft.
Contract addresses critical sustainment needs for strategic assets.
Work is being performed in Oklahoma, potentially supporting regional economic activity.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft manufacturing and support services. The market for specialized engineering services for legacy aircraft like the B-1 and B-52 is limited, often dominated by the original equipment manufacturers. Spending in this niche is driven by the need to maintain aging fleets, which requires deep technical knowledge and proprietary data, often held by the prime contractor.

Small Business Impact

The contract data indicates that small business participation is not a primary focus, as the prime contractor is The Boeing Company and there is no explicit mention of small business set-asides. Subcontracting opportunities for small businesses may exist but are not detailed in this award notice. The overall impact on the small business ecosystem is likely minimal unless Boeing actively engages small businesses for specialized support roles.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Air Force contracting and program management offices. Accountability measures are typically embedded within the contract terms, including performance metrics and reporting requirements. Transparency is facilitated through contract award databases, though the specifics of cost reporting under a cost-plus contract require diligent government oversight to ensure value for money.

Related Government Programs

B-1 Lancer Sustainment
B-52 Stratofortress Modernization
Air Force Aircraft Engineering Services
Defense Contractor Support Services

Risk Flags

Sole-source award
Cost-plus contract type
Long-term duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $55.8 million to THE BOEING COMPANY. B-1/B-52 ENGINEERING SERVICES (BBES)

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 $55.8 million.

What is the period of performance?

Start: 2022-11-15. End: 2026-02-27.

What is The Boeing Company's track record with similar sole-source engineering contracts for legacy aircraft?

The Boeing Company has a long history of sole-source and competitively awarded contracts for the sustainment and modification of U.S. military aircraft, including bombers. Their extensive experience with platforms like the B-1 and B-52 means they possess unique institutional knowledge, proprietary data, and specialized tooling essential for these complex systems. While sole-source awards can raise cost concerns, the government often relies on Boeing's established expertise when no other contractor can provide the required specialized engineering services due to technical complexity, security requirements, or the need to maintain original design integrity. Evaluating past performance on similar contracts would involve reviewing delivery timelines, cost performance reports, and any documented issues or successes in managing these types of agreements.

How does the cost-plus fixed fee structure compare to other contract types for this type of service?

The Cost-Plus Fixed Fee (CPFF) contract type is often used when the scope of work is not precisely defined or involves significant uncertainty, such as in advanced engineering or research and development. In a CPFF contract, the contractor is reimbursed for allowable costs plus a predetermined fixed fee representing profit. This differs from fixed-price contracts, where the price is set regardless of the actual costs incurred, offering greater cost certainty to the buyer but potentially higher risk for the contractor. It also differs from cost-plus-incentive-fee (CPIF) contracts, which include provisions to adjust the fee based on performance against targets. For engineering services on legacy systems, CPFF can be advantageous for the government if the contractor has a strong incentive to control costs, but it requires robust oversight to prevent scope creep and ensure the fixed fee remains reasonable relative to the effort.

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

The primary risk associated with a sole-source award for critical defense engineering services is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government may not achieve the most economical outcome. Another risk is vendor lock-in, where the government becomes overly reliant on a single provider, potentially limiting future flexibility and innovation. Furthermore, a sole-source award can reduce the incentive for the contractor to be highly efficient or to proactively seek cost-saving measures, as the profit margin is fixed. Effective risk mitigation requires strong government negotiation, rigorous cost analysis, and clear performance metrics within the contract to ensure accountability and value.

What is the historical spending pattern for B-1/B-52 engineering and sustainment services?

Historical spending on B-1 and B-52 engineering and sustainment services has been substantial, reflecting the long operational lives and complex maintenance requirements of these strategic assets. The U.S. Air Force consistently allocates significant portions of its budget to ensure the readiness and modernization of its bomber fleet. This spending typically includes costs for depot maintenance, component upgrades, avionics modernization, software updates, and ongoing engineering support to address obsolescence and performance degradation. Over the past decade, annual expenditures for bomber sustainment have often run into the hundreds of millions of dollars across various contracts, with specific programs like the B-52 re-engining and B-1 avionics upgrades representing major investments. The current $55.8 million contract is part of this ongoing, long-term investment in maintaining these critical platforms.

How does the geographic location in Oklahoma influence the contract's execution and oversight?

The contract's performance location in Oklahoma, indicated by the 'SN' field, suggests that the primary engineering activities will be conducted at or near a specific Air Force base or contractor facility within the state. This geographic concentration can streamline communication and collaboration between government personnel and the contractor's engineering teams. It may also leverage existing infrastructure and a skilled workforce in the region familiar with aerospace operations. For oversight, having the work performed in a single location can simplify the deployment of government representatives responsible for monitoring progress, ensuring compliance, and conducting inspections. However, it also means that any disruptions in that specific geographic area, such as natural disasters or local economic issues, could potentially impact contract performance.

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

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: $58,079,761

Exercised Options: $58,079,761

Current Obligation: $55,782,314

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