Boeing awarded $13.5M sole-source contract for Air Force Guidance Subsystem Sustainment
Contract Overview
Contract Amount: $13,522,716 ($13.5M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2025-02-02
End Date: 2026-02-01
Contract Duration: 364 days
Daily Burn Rate: $37.1K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Official Description: GUIDANCE SUBSYSTEM SUSTAINMENT CONTRACT (GUSSC) 2.0 2025 TASK ORDER
Place of Performance
Location: LAYTON, DAVIS County, UTAH, 84041
State: Utah Government Spending
Plain-Language Summary
Department of Defense obligated $13.5 million to THE BOEING COMPANY for work described as: GUIDANCE SUBSYSTEM SUSTAINMENT CONTRACT (GUSSC) 2.0 2025 TASK ORDER Key points: 1. Contract awarded on a cost-plus-award-fee basis, allowing for potential profit above base cost. 2. Sole-source award indicates a lack of competitive bidding, potentially impacting price. 3. Contract duration of 364 days suggests a focus on immediate sustainment needs. 4. The contract falls under Engineering Services (NAICS 541330), a broad category. 5. Awarded by the Department of the Air Force, a major defense spender. 6. The contract is for sustainment of a guidance subsystem, critical for operational readiness.
Value Assessment
Rating: questionable
As a sole-source award, direct price comparisons to similar contracts are difficult. The cost-plus-award-fee structure means the final cost will depend on performance, making it hard to benchmark value without knowing the award fee achieved. Without competition, there's less pressure to optimize costs. The base contract value of $13.5M for one year of sustainment needs further analysis against the complexity and criticality of the guidance subsystem.
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. This typically occurs when only one vendor possesses the necessary capabilities, proprietary knowledge, or when urgency dictates. The lack of competition limits the government's ability to solicit multiple bids and negotiate the best possible price, potentially leading to higher costs for taxpayers.
Taxpayer Impact: Sole-source awards reduce opportunities for market competition, which can result in higher prices and less innovation compared to fully competed contracts. Taxpayers may not receive the best value when alternatives are not explored.
Public Impact
The primary beneficiary is the Department of the Air Force, ensuring the operational readiness of its aircraft. Services delivered include sustainment of a critical guidance subsystem, vital for mission success. The geographic impact is likely concentrated at Air Force bases where the supported aircraft are stationed. Workforce implications may involve specialized engineers and technicians required for maintaining advanced guidance systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and potential cost savings.
- Cost-plus-award-fee structure can incentivize higher spending if not carefully managed.
- Lack of transparency in performance metrics and award fee determination could obscure true value.
- Sustainment contracts can become long-term dependencies if not periodically re-competed.
Positive Signals
- Ensures continued operational capability of critical Air Force assets.
- Boeing's established expertise in aerospace systems likely ensures technical proficiency.
- Award fee mechanism, if structured well, can incentivize contractor performance.
- Contract provides a defined period for sustainment, allowing for planning.
Sector Analysis
The aerospace and defense sector is characterized by high technological complexity and significant government investment. Sustainment contracts like this are crucial for maintaining the readiness of military platforms. The market for specialized engineering and sustainment services is often dominated by a few large, established contractors due to high barriers to entry, including intellectual property and security clearances. Comparable spending benchmarks for similar subsystem sustainment can vary widely based on the specific technology and platform.
Small Business Impact
This contract does not appear to have a small business set-aside. As a sole-source award to a large prime contractor, there is a potential for limited subcontracting opportunities for small businesses unless specifically mandated or pursued by the prime. The impact on the small business ecosystem would depend on whether Boeing actively seeks small business partners for specialized support services.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Accountability measures are embedded in the Cost Plus Award Fee structure, linking contractor payment to performance. Transparency may be limited due to the sole-source nature and proprietary aspects of the guidance subsystem. The Inspector General of the Department of Defense would have jurisdiction for audits and investigations.
Related Government Programs
- Air Force Aircraft Maintenance
- Defense Logistics Agency Support Contracts
- Aerospace Engineering Services
- Guidance, Navigation, and Control Systems
Risk Flags
- Sole-source award
- Cost-plus-award-fee contract type
- Potential for limited competition
Tags
defense, department-of-the-air-force, engineering-services, sustainment, sole-source, cost-plus-award-fee, boeing, guidance-subsystem, utah, delivery-order
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $13.5 million to THE BOEING COMPANY. GUIDANCE SUBSYSTEM SUSTAINMENT CONTRACT (GUSSC) 2.0 2025 TASK ORDER
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 $13.5 million.
What is the period of performance?
Start: 2025-02-02. End: 2026-02-01.
What is the historical spending on this specific guidance subsystem sustainment, and how does the current award compare?
Historical spending data for this specific 'GUIDANCE SUBSYSTEM SUSTAINMENT CONTRACT (GUSSC) 2.0' is not provided in the given data. However, the current award is for $13,522,715.86 for a 364-day period. To compare, one would need to access historical contract databases (like FPDS or USASpending) for previous awards related to GUSSC or similar guidance subsystem sustainment efforts for the Air Force. Factors such as inflation, system upgrades, and changes in operational tempo would need to be considered for a meaningful comparison. Without prior data, it's difficult to ascertain if this award represents an increase or decrease in spending relative to past efforts.
What specific performance metrics are tied to the 'award fee' component of this contract?
The provided data indicates the contract type is 'COST PLUS AWARD FEE' (CPAF), but it does not specify the performance metrics tied to the award fee. Typically, in a CPAF contract, the government establishes objective and subjective criteria related to technical performance, schedule adherence, cost control, and management. The contractor earns a base fee plus an award fee based on how well they meet or exceed these predefined metrics. For this contract, the specific metrics would be detailed in the contract's Performance Work Statement (PWS) and the associated award fee plan, which are not included in the summary data. These metrics are crucial for assessing contractor performance and ensuring value for taxpayer money.
What are the risks associated with a sole-source award for critical sustainment services?
Sole-source awards for critical sustainment services carry several risks. Primarily, the lack of competition can lead to inflated prices as the contractor faces no market pressure to offer the most cost-effective solution. There's also a risk of complacency, where the incumbent contractor may not feel compelled to innovate or improve efficiency as aggressively as they would in a competitive environment. Furthermore, sole-source awards can create long-term dependencies on a single provider, potentially hindering the government's ability to switch to more advanced or cost-effective solutions in the future. Finally, without competitive benchmarking, it's harder to objectively assess whether the awarded price represents fair and reasonable value.
How does the 'Engineering Services' NAICS code (541330) apply to the sustainment of a guidance subsystem?
The NAICS code 541330, 'Engineering Services,' broadly covers establishments primarily engaged in providing specialized engineering services. This includes services related to the design, development, and application of engineering principles in areas such as aerospace, mechanical, and electrical systems. For the sustainment of a guidance subsystem, engineering services would encompass activities like troubleshooting, diagnostics, repair planning, technical support, system integration, performance analysis, and potentially minor modifications or upgrades necessary to maintain the subsystem's functionality and reliability throughout its lifecycle. It reflects the technical expertise required to support complex defense systems.
What is the potential impact of the 'UT' (Utah) state designation on this contract?
The 'UT' designation likely refers to the state where the contractor's facility performing the work is located, or potentially the location of the end-user or a significant portion of the work. For this contract, the data indicates 'ST: UTAH' and 'SN: UTAH'. This suggests that The Boeing Company's operations in Utah are involved in fulfilling this Department of the Air Force contract. This could have implications for local economies, workforce development, and potentially state-level economic incentives or regulations. It also helps in geographically tracking defense spending and identifying key industrial bases.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
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 AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 465 MARSHALL WAY, LAYTON, UT, 84041
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: $14,209,858
Exercised Options: $14,209,858
Current Obligation: $13,522,716
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA821423D0001
IDV Type: IDC
Timeline
Start Date: 2025-02-02
Current End Date: 2026-02-01
Potential End Date: 2026-02-01 00:00:00
Last Modified: 2025-09-11
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