Boeing awarded $38M for B-52 engineering services, with contract performance in Oklahoma

Contract Overview

Contract Amount: $38,020,103 ($38.0M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2024-05-17

End Date: 2026-08-21

Contract Duration: 826 days

Daily Burn Rate: $46.0K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: B-1 B-52 ENGINEERING SERVICES

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $38.0 million to THE BOEING COMPANY for work described as: B-1 B-52 ENGINEERING SERVICES Key points: 1. Contract awarded to a single, large incumbent provider, raising questions about competitive pricing. 2. The cost-plus-fixed-fee structure may incentivize cost overruns, requiring close oversight. 3. Long-term contract duration suggests a critical, ongoing need for B-52 sustainment. 4. Performance is concentrated in Oklahoma, potentially impacting local aerospace workforce. 5. The absence of competition indicates a potential lack of market pressure on pricing. 6. This contract represents a significant investment in maintaining aging strategic assets.

Value Assessment

Rating: fair

The contract's value of approximately $38 million for B-52 engineering services is difficult to benchmark without comparable sole-source contracts. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex engineering efforts where costs are uncertain, can lead to higher overall expenditures compared to fixed-price contracts. Without competitive bidding, it's challenging to definitively assess if the pricing represents optimal value for money. The Air Force must ensure robust cost controls and performance monitoring to mitigate potential overspending.

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 is typically used when a specific contractor possesses unique capabilities, proprietary data, or is the sole provider of essential services. The lack of competition means that price discovery through market forces was bypassed, potentially leading to higher costs than if multiple bids had been considered. The justification for sole-source procurement needs to be rigorously documented to ensure it aligns with federal acquisition regulations.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive pressure. Without competing offers, the government cannot be assured it is receiving the most economical price for these critical engineering services.

Public Impact

The U.S. Air Force benefits from continued engineering support for the B-52 bomber fleet. Essential sustainment and modernization services for a key strategic asset are delivered. The geographic impact is concentrated in Oklahoma, supporting the local aerospace industry and workforce. The contract supports specialized engineering roles, potentially sustaining high-skilled jobs within the aerospace sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Cost-plus-fixed-fee contract type can incentivize higher spending if not closely managed.
Long contract duration (over 2 years) increases exposure to potential cost escalations.
Reliance on a single contractor for critical B-52 engineering may pose supply chain risks if Boeing faces operational disruptions.

Positive Signals

Award to incumbent contractor (Boeing) ensures continuity of essential B-52 engineering expertise.
Contract addresses critical sustainment needs for a vital strategic bomber platform.
Performance located in Oklahoma supports a key aerospace hub and associated workforce.
Fixed fee component in CPFF provides some level of cost predictability for the contractor's effort.

Sector Analysis

The B-52 bomber fleet represents a significant and aging component of the U.S. strategic air command. Engineering services for such platforms are crucial for maintaining operational readiness, extending service life, and implementing necessary upgrades. The aerospace and defense sector is characterized by high barriers to entry, specialized knowledge, and often involves long-term sustainment contracts. This contract fits within the broader defense aerospace services market, which is substantial, with significant government spending allocated annually to aircraft sustainment and modernization.

Small Business Impact

This contract was awarded directly to The Boeing Company and does not appear to include specific small business set-aside provisions. As a sole-source award to a large prime contractor, there is a potential for limited subcontracting opportunities for small businesses unless explicitly mandated or pursued by Boeing. The impact on the small business ecosystem is likely minimal in terms of direct set-asides, but Boeing's subcontracting strategy will determine any indirect benefits.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Air Force contracting and program management offices. Given the sole-source nature and CPFF structure, rigorous oversight of costs, performance metrics, and adherence to the contract statement of work will be paramount. Transparency may be limited due to the non-competitive award, but internal government reviews and potentially Inspector General audits would scrutinize expenditures and performance.

Related Government Programs

B-52 Bomber Sustainment Programs
Air Force Aircraft Maintenance and Repair
Aerospace Engineering Services Contracts
Department of Defense Weapon System Support

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Long contract duration
Aging aircraft platform

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.0 million to THE BOEING COMPANY. B-1 B-52 ENGINEERING SERVICES

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 $38.0 million.

What is the period of performance?

Start: 2024-05-17. End: 2026-08-21.

What is Boeing's historical performance record with the U.S. Air Force on similar B-52 sustainment contracts?

Boeing has a long-standing relationship with the U.S. Air Force, including extensive work on the B-52 platform throughout its operational history. Historically, Boeing has generally met performance requirements for major defense programs, though like many large defense contractors, they have faced scrutiny over cost overruns and schedule delays on complex projects. Specific performance data for prior B-52 engineering contracts would require access to government performance reports (e.g., CPARS) which are often not publicly available. However, the Air Force's continued reliance on Boeing for these services suggests a baseline level of satisfactory performance, albeit potentially with ongoing cost management challenges.

How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for this type of engineering service in terms of value for money?

The Cost-Plus-Fixed-Fee (CPFF) structure is often employed for research and development or complex engineering services where the scope of work and associated costs are difficult to define precisely upfront. While it allows for flexibility and ensures the contractor is compensated for incurred costs plus a fixed profit, it carries a higher risk of cost escalation for the government compared to fixed-price contracts. Fixed-price contracts offer better cost certainty but may not be suitable if unforeseen technical challenges arise. For sustainment engineering, a well-defined fixed-price contract could potentially offer better value if risks are well-understood. However, for evolving engineering needs on an aging platform like the B-52, CPFF might be deemed necessary to ensure comprehensive support, provided robust cost controls and oversight are in place.

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

The primary risk associated with a sole-source award is the lack of competitive pressure, which can lead to inflated pricing and reduced incentive for the contractor to innovate or improve efficiency. Without competing bids, the government cannot be certain it is obtaining the best possible price or value. Furthermore, sole-source awards can create vendor lock-in, making it difficult and costly to switch providers in the future. There's also a risk that the sole provider may not prioritize the contract if they have other, more lucrative opportunities, potentially impacting service delivery. Robust justification and stringent oversight are critical to mitigate these risks.

What is the estimated total spending on B-52 sustainment and engineering over the past five years?

Estimating the precise total spending on B-52 sustainment and engineering over the past five years requires aggregating data from numerous contracts across different agencies and fiscal years. Publicly available data suggests that the U.S. Air Force allocates significant resources annually to maintain its aging bomber fleet. While a specific aggregate figure for the last five years is not readily available without extensive database queries, annual spending on bomber sustainment, including engineering services, typically runs into hundreds of millions, if not billions, of dollars across the entire fleet. This $38 million contract represents a portion of that larger sustainment effort.

What are the implications of this contract's performance location in Oklahoma for the regional aerospace economy?

Concentrating the performance of this B-52 engineering services contract in Oklahoma has several implications for the regional aerospace economy. It directly supports jobs within The Boeing Company's facilities in the state, likely requiring skilled engineers, technicians, and support staff. This activity contributes to the local tax base and stimulates related businesses, such as suppliers and service providers in the Oklahoma aerospace cluster. Furthermore, it reinforces Oklahoma's position as a key hub for aerospace manufacturing and sustainment, potentially attracting further investment and talent to the region.

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: $38,020,103

Exercised Options: $38,020,103

Current Obligation: $38,020,103

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