Boeing awarded $30.1M for B-52 engineering services, a sole-source contract for aircraft manufacturing

Contract Overview

Contract Amount: $30,100,115 ($30.1M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2024-03-04

End Date: 2025-03-03

Contract Duration: 364 days

Daily Burn Rate: $82.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

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 $30.1 million to THE BOEING COMPANY for work described as: B-1 B-52 ENGINEERING SERVICES (BBES) Key points: 1. Contract awarded to incumbent provider, The Boeing Company, for continued B-52 engineering support. 2. Sole-source award suggests limited market alternatives or specialized knowledge required. 3. Contract duration of 364 days indicates ongoing operational needs for the B-52 fleet. 4. Fixed-price contract type shifts cost risk to the contractor. 5. Awarded by the Department of the Air Force, highlighting strategic importance of B-52 sustainment. 6. The contract value is a fraction of the total B-52 modernization program costs.

Value Assessment

Rating: fair

The contract value of $30.1 million for one year of engineering services for the B-52 bomber fleet appears reasonable given the specialized nature of the aircraft and the incumbent contractor's historical knowledge. However, without a competitive bidding process, it is difficult to definitively benchmark the value against market alternatives. The fixed-price contract type provides some cost certainty for the government. Further analysis would require comparing the scope of services to similar sole-source engineering support contracts for legacy aircraft.

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 the required services are highly specialized, or when the incumbent contractor possesses unique knowledge or capabilities essential for the program's continuity. The lack of competition means the government did not benefit from price discovery through multiple bids, potentially leading to a higher price than if the contract had been competed.

Taxpayer Impact: For taxpayers, a sole-source award means there is a reduced opportunity to secure the best possible price through competitive market forces. This can result in higher overall spending on sustainment and modernization efforts.

Public Impact

The primary beneficiaries are the U.S. Air Force and its B-52 bomber fleet, ensuring continued operational readiness. Services delivered include critical engineering support, maintenance planning, and technical expertise for the aging aircraft. The geographic impact is primarily within the United States, supporting Air Force bases and Boeing facilities. Workforce implications include continued employment for specialized engineers and technicians at Boeing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs than a competed contract.
Reliance on a single contractor for critical engineering services poses a long-term risk.
Potential for scope creep or unmanaged cost increases in future sole-source modifications.

Positive Signals

Award to incumbent ensures continuity of essential B-52 engineering support.
Fixed-price contract structure provides cost predictability for the current period.
Boeing's established expertise with the B-52 platform minimizes technical risks.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex technological requirements, and long product lifecycles. The B-52 bomber, a strategic asset, requires specialized engineering and sustainment services that are often concentrated among a few original equipment manufacturers or highly specialized firms. This contract fits within the broader defense sustainment and modernization market, where maintaining legacy platforms is crucial for national security. Comparable spending benchmarks would involve looking at other sole-source engineering support contracts for major legacy weapon systems.

Small Business Impact

This contract 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 the prime. The impact on the small business ecosystem would depend on Boeing's subcontracting strategy for this specific award.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Air Force contracting and program management offices. Accountability measures are embedded within the contract's performance work statement and delivery schedules. Transparency is facilitated through contract award databases, though detailed performance metrics may not be publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

B-52 Bomber Sustainment Program
Air Force Materiel Command Engineering Services
Legacy Aircraft Maintenance Contracts
Defense Contractor Support Services

Risk Flags

Sole-source award limits price competition.
Potential for cost escalation due to lack of competitive pressure.
Long-term reliance on a single contractor.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.1 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 $30.1 million.

What is the period of performance?

Start: 2024-03-04. End: 2025-03-03.

What is the historical spending trend for B-52 engineering services with The Boeing Company?

Historical spending data for B-52 engineering services with The Boeing Company would reveal the long-term financial commitment to maintaining this critical asset. Analyzing past contract values, durations, and any modifications over several fiscal years can indicate trends in cost escalation, the scope of services provided, and the overall reliance on Boeing for this support. For instance, if annual spending has consistently remained around the current $30 million mark, it suggests a stable, albeit significant, ongoing requirement. Conversely, a sharp increase or decrease might signal changes in operational tempo, new sustainment challenges, or shifts in program priorities. Understanding these historical patterns is crucial for forecasting future budgetary needs and assessing the long-term affordability of B-52 sustainment.

How does the pricing of this contract compare to similar sole-source engineering support contracts for other legacy aircraft?

Benchmarking the pricing of this $30.1 million sole-source contract against similar sole-source engineering support agreements for other legacy aircraft is essential for assessing value for money. This comparison should consider factors such as contract duration, the complexity of the aircraft systems supported, the specific engineering services included (e.g., design, modification, maintenance planning, troubleshooting), and the incumbent contractor's role. For example, if contracts for supporting aircraft like the C-130 or F-15, which have different complexities and fleet sizes, show significantly lower or higher annual costs for comparable services, it could indicate whether the B-52 contract is priced competitively within the sole-source landscape. The absence of competition inherently limits direct price comparison, making these indirect benchmarks vital for a fair assessment.

What are the specific risks associated with relying solely on The Boeing Company for B-52 engineering services?

The primary risk associated with sole-source reliance on The Boeing Company for B-52 engineering services is the potential for reduced cost control and innovation. Without competitive pressure, there is less incentive for the contractor to optimize costs or introduce efficiencies, potentially leading to higher prices over time. Furthermore, the government's negotiating leverage is diminished, making it harder to secure favorable terms or drive down costs. There's also a risk of vendor lock-in, where the government becomes overly dependent on a single provider, making it difficult and costly to switch contractors or bring services in-house should circumstances change. This dependency can also impact the pace of technological adoption or adaptation if the contractor's priorities do not align perfectly with the Air Force's evolving needs.

What is the perceived effectiveness of The Boeing Company in delivering B-52 engineering support based on past performance?

Assessing the perceived effectiveness of The Boeing Company in delivering B-52 engineering support requires examining past performance evaluations, contract history, and mission accomplishment metrics. While specific performance data is often proprietary, general indicators can be gleaned from contract award databases and public reports. If Boeing has consistently met delivery schedules, resolved technical issues effectively, and maintained high levels of aircraft readiness through its engineering services, its effectiveness can be considered high. Conversely, any history of significant delays, cost overruns on previous contracts, or documented performance deficiencies would raise concerns. Given the long-standing relationship and the sole-source nature of this award, it implies a level of satisfaction with Boeing's capabilities and historical performance in sustaining the B-52 fleet.

How does the current contract value compare to the total estimated cost of the B-52 modernization program?

The current contract value of $30.1 million represents a component of the broader B-52 modernization program, which is a multi-billion dollar initiative aimed at extending the operational life of the fleet well into the future. This specific contract focuses on engineering services for the existing platform, likely encompassing sustainment, diagnostics, and potentially support for ongoing upgrades. When compared to the total estimated cost of the modernization program, which includes new engines, avionics, and structural upgrades, this $30.1 million appears as a relatively small, albeit crucial, annual expenditure. It highlights that while modernization is a significant investment, the day-to-day engineering support remains a vital and ongoing cost factor in maintaining the B-52's strategic role.

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: 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: $30,100,115

Exercised Options: $30,100,115

Current Obligation: $30,100,115

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