Boeing awarded $10.4M for B-1/B-52 engineering services, with contract performance rated 'OK'

Contract Overview

Contract Amount: $10,407,160 ($10.4M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2024-08-01

End Date: 2026-04-30

Contract Duration: 637 days

Daily Burn Rate: $16.3K/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 $10.4 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. Performance history indicates a stable, albeit unexceptional, relationship with the contractor. 3. The contract's cost-plus-fixed-fee structure may incentivize cost overruns. 4. Limited competition suggests potential for higher prices than a fully competed contract. 5. The duration of the contract (nearly two years) indicates a need for ongoing support. 6. Focus on engineering services for strategic bomber platforms highlights critical defense capabilities.

Value Assessment

Rating: fair

The contract's value of $10.4 million for engineering services on B-1/B-52 aircraft appears reasonable given the specialized nature of the work and the contractor's established role. However, without comparable contract data for similar engineering services on these specific platforms, a precise value-for-money assessment is challenging. The cost-plus-fixed-fee (CPFF) pricing structure, while common for R&D and complex services, carries inherent risks of cost escalation if not closely monitored. Benchmarking against industry standards for aircraft engineering support would be beneficial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities, intellectual property, or is the sole provider of necessary services. The lack of competition means that price discovery through market forces was bypassed, potentially leading to less favorable pricing for the government compared to a competitive scenario. The Air Force likely determined that Boeing was the only viable source for these specialized engineering services.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible price through competitive bidding, potentially resulting in higher costs for taxpayers.

Public Impact

The primary beneficiaries are the U.S. Air Force and its strategic bomber fleet, ensuring continued operational readiness. Services delivered include critical engineering support for the B-1 and B-52 aircraft. The geographic impact is concentrated around the contractor's facilities and Air Force bases where these aircraft are maintained. Workforce implications include the employment of specialized engineers and technical staff at The Boeing Company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost-plus-fixed-fee structure may not provide sufficient incentive for cost control.
Lack of transparency in the sole-source justification could mask potential inefficiencies.

Positive Signals

Contractor has a long-standing relationship and expertise with the specific aircraft platforms.
Performance rating of 'OK' suggests satisfactory delivery of services to date.
The contract addresses critical national defense needs for strategic bomber sustainment.

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 platforms like the B-1 and B-52 is highly concentrated, with incumbent contractors like Boeing often holding a dominant position due to proprietary knowledge and established relationships. Spending in this niche is driven by the need for sustainment, modernization, and operational readiness of aging but critical military assets. Comparable spending benchmarks are difficult to establish due to the unique nature of these platforms and the specialized engineering required.

Small Business Impact

This contract does not appear to include a small business set-aside, nor is there information suggesting significant subcontracting opportunities for small businesses. The award to a large prime contractor like Boeing typically means that the primary focus is on direct performance by the prime or its large subcontractors. This could limit opportunities for small businesses to participate in this specific contract, although Boeing may have broader small business subcontracting programs in place across its portfolio.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Air Force contracting and program management offices. The cost-plus-fixed-fee structure necessitates robust financial oversight to monitor expenditures and ensure compliance with contract terms. Transparency is limited due to the sole-source nature, but contract modifications, performance reports, and payment data should be accessible through federal procurement databases. The Inspector General's office for the Department of Defense may conduct audits or investigations if performance or financial concerns arise.

Related Government Programs

B-52 Bomber Sustainment
B-1 Lancer Engineering Support
Air Force Aircraft Maintenance Contracts
Defense Logistics Agency Support Services
Aerospace Engineering Services

Risk Flags

Sole-source award
Cost-plus-fixed-fee pricing
Performance rated 'OK' (satisfactory, not exceptional)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.4 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 $10.4 million.

What is the period of performance?

Start: 2024-08-01. End: 2026-04-30.

What is The Boeing Company's track record with the Air Force for similar engineering services?

The Boeing Company has a long and extensive history of providing engineering, manufacturing, and support services to the U.S. Air Force across numerous platforms, including bombers like the B-52 and B-1. Their track record generally includes successful delivery of complex systems and sustainment services. However, like many large defense contractors, they have also faced scrutiny over contract costs, performance issues, and schedule delays on various programs. For these specific platforms, Boeing's deep institutional knowledge and historical involvement suggest a strong capability, but past performance reviews and contract closeouts would provide a more granular understanding of their reliability and efficiency in delivering engineering support.

How does the $10.4 million value compare to similar sole-source engineering contracts for strategic aircraft?

Directly comparing the $10.4 million value to similar sole-source engineering contracts for strategic aircraft is challenging due to the proprietary nature of such data and the unique specifications of each contract. However, for specialized engineering services on complex, legacy military platforms, this figure appears within a plausible range. Sole-source awards often command higher prices than competed ones due to the lack of market pressure. To provide a robust comparison, one would need access to data on contracts for engineering support, modifications, or sustainment for aircraft like the B-52, B-1, or comparable strategic assets, factoring in contract duration, scope of work, and the specific technical expertise required.

What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract for engineering services?

The primary risks associated with a sole-source, cost-plus-fixed-fee (CPFF) contract for engineering services are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to inflated pricing and reduced incentive for the contractor to seek cost efficiencies. The government relies heavily on the contractor's cost proposals and good faith. Secondly, the CPFF structure, while providing flexibility for evolving requirements, can incentivize the contractor to incur more costs, as their fee is a percentage of those costs (though fixed in this case, the base cost can still increase). This necessitates rigorous government oversight of expenditures, detailed cost tracking, and strong program management to prevent cost overruns and ensure the government receives fair value for its investment.

How effective is the 'OK' performance rating in assessing the contractor's ability to deliver on this contract?

An 'OK' performance rating suggests that The Boeing Company has met the minimum requirements and standards expected under previous contracts or performance periods. While 'OK' indicates satisfactory performance, it does not signify exceptional or outstanding results. For critical defense systems like the B-1/B-52, 'OK' performance might be considered adequate but could also signal areas where improvement is possible or where risks might be higher compared to a contractor with a history of 'excellent' ratings. It implies that deliverables were generally met on time and within scope, but it warrants closer monitoring to ensure continued satisfactory performance and to identify any emerging issues before they escalate.

What are the historical spending patterns 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 age and complexity of these strategic assets. The U.S. Air Force consistently allocates significant portions of its budget towards maintaining and modernizing its bomber fleet. This includes funding for depot maintenance, component upgrades, avionics modernization, and ongoing engineering support to address obsolescence and ensure mission capability. Over the past decade, spending on these programs has likely fluctuated based on modernization priorities, operational tempo, and budget allocations, but the overall trend indicates a sustained, multi-billion dollar investment in the long-term viability of these platforms.

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: $10,613,081

Exercised Options: $10,613,081

Current Obligation: $10,407,160

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