Boeing awarded $13.5M for T-38C avionics integration and logistics support by the Air Force

Contract Overview

Contract Amount: $13,551,494 ($13.6M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2021-09-28

End Date: 2026-03-31

Contract Duration: 1,645 days

Daily Burn Rate: $8.2K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: T-38C AVIONICS COMPONENT INTEGRATION AND CONTRACTOR LOGISTICS SUPPORT

Place of Performance

Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $13.6 million to THE BOEING COMPANY for work described as: T-38C AVIONICS COMPONENT INTEGRATION AND CONTRACTOR LOGISTICS SUPPORT Key points: 1. Contract focuses on critical avionics upgrades and ongoing support for the T-38C training aircraft. 2. The fixed-price contract structure aims to control costs and provide predictable spending. 3. Competition was full and open, suggesting a potentially competitive bidding process. 4. Contract duration extends over five years, indicating a long-term need for these services. 5. The award is managed by the Department of the Air Force, a major defense spender. 6. Logistics support is crucial for maintaining the operational readiness of training fleets.

Value Assessment

Rating: good

The contract value of $13.5 million over approximately 5.5 years appears reasonable for specialized avionics integration and long-term logistics support for a fleet of training aircraft. Benchmarking against similar complex avionics upgrades and sustainment contracts for military platforms suggests this pricing is within expected ranges. The firm fixed-price nature of the contract provides cost certainty for the government, although it places the cost risk on the contractor. Without specific details on the scope of work for avionics integration and the exact number of aircraft supported, a precise value-for-money assessment is challenging, but the overall value seems aligned with industry standards for such services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but the designation suggests a robust competitive environment. Full and open competition generally leads to better price discovery and encourages contractors to offer competitive terms to win the award. This approach is favored for ensuring the government receives the best possible value by leveraging market forces.

Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and a wider range of innovative solutions being considered. It ensures that public funds are used efficiently by preventing sole-source awards that might otherwise lead to inflated costs.

Public Impact

The primary beneficiaries are student pilots and instructors who rely on the T-38C for essential flight training. The contract ensures the continued operational readiness and modernization of the T-38C fleet, vital for pilot development. Services are delivered across locations where the T-38C is operated, primarily at Air Force training bases. The contract supports skilled jobs in aerospace engineering, avionics, and logistics within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen technical challenges arise during avionics integration, despite fixed-price terms.
Dependence on a single contractor for critical logistics support could create vulnerabilities if performance issues emerge.
The long contract duration might limit opportunities to incorporate newer technologies if they become available mid-contract.

Positive Signals

Firm fixed-price contract provides cost certainty and limits the government's exposure to cost increases.
Full and open competition suggests a strong market response and potential for competitive pricing.
The contractor, The Boeing Company, has extensive experience with military aircraft sustainment and integration.
Awarding delivery orders under an existing contract vehicle can streamline procurement and reduce administrative burden.

Sector Analysis

The T-38C Talon is a twin-engine, supersonic jet trainer aircraft used by the United States Air Force and NASA. This contract falls within the aerospace and defense sector, specifically focusing on aircraft parts, auxiliary equipment, and contractor logistics support. The market for military aircraft sustainment and avionics modernization is substantial, driven by the need to maintain aging fleets and incorporate advanced technologies. Comparable spending benchmarks for similar sustainment contracts can range from millions to billions of dollars depending on the platform's complexity and fleet size.

Small Business Impact

This contract does not appear to have a specific small business set-aside component, as indicated by 'sb': false. The prime contractor is The Boeing Company, a large aerospace firm. While there is no direct set-aside, large prime contractors are often required to meet subcontracting goals with small businesses as part of their overall contract obligations. The impact on the small business ecosystem would depend on Boeing's subcontracting strategy for this specific award, potentially creating opportunities for specialized small businesses in avionics or logistics.

Oversight & Accountability

Oversight for this contract is primarily managed by the Department of the Air Force, likely through contracting officers and program management offices responsible for T-38C sustainment. Accountability measures are embedded in the contract terms, including performance standards and delivery schedules. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

T-38 Talon Sustainment Programs
Air Force Pilot Training Modernization Efforts
Aerospace Component Manufacturing
Defense Contractor Logistics Services
Military Aircraft Avionics Upgrades

Risk Flags

Potential for cost overruns if unforeseen technical challenges arise during avionics integration.
Dependence on a single contractor for critical logistics support could create vulnerabilities.
Long contract duration might limit opportunities to incorporate newer technologies.
Performance issues could impact pilot training schedules.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.6 million to THE BOEING COMPANY. T-38C AVIONICS COMPONENT INTEGRATION AND CONTRACTOR LOGISTICS SUPPORT

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 $13.6 million.

What is the period of performance?

Start: 2021-09-28. End: 2026-03-31.

What is the historical spending pattern for T-38C avionics integration and logistics support, and how does this award compare?

Historical spending on T-38C avionics integration and logistics support would typically involve a series of contracts over the aircraft's long service life. Prior to this award, there would have been previous contracts for sustainment, component repair, and potentially earlier avionics modernization efforts. This $13.5 million award represents a specific, defined period of support and integration work. To compare, one would need to analyze the scope and duration of previous contracts. For instance, if previous annual sustainment costs were in the low millions, this award, spread over 5.5 years, might represent a significant but potentially consolidated effort. Without access to historical contract data for the T-38C specifically, a direct comparison is difficult, but the current award appears to be a substantial investment in maintaining the operational capability of the training fleet.

What is The Boeing Company's track record with similar defense contracts, particularly in avionics and logistics?

The Boeing Company has an extensive and well-established track record in the defense sector, including significant experience with military aircraft sustainment, avionics integration, and complex logistics support. As a major aerospace manufacturer, Boeing has been involved in the design, production, and lifecycle support of numerous military platforms, including trainers, fighters, bombers, and transport aircraft. Their experience spans decades and includes managing large-scale, multi-year contracts for services similar to those required for the T-38C. This includes upgrades to avionic systems, maintenance, repair, and overhaul (MRO) services, and comprehensive supply chain management. Their history suggests a capacity to handle the technical and logistical demands of this contract, although specific performance metrics on past contracts would provide a more granular assessment of their reliability and efficiency.

What are the key performance indicators (KPIs) used to measure the success of this contract, and what are the potential risks associated with performance?

Key performance indicators (KPIs) for this contract would likely focus on ensuring the T-38C fleet's availability and readiness for pilot training. These could include metrics such as aircraft mission capable rates, on-time delivery of integrated avionics systems, turnaround times for repairs and maintenance, and adherence to the schedule for avionics upgrades. Performance risks include potential delays in the integration of new avionics due to technical complexities or supply chain disruptions, which could impact training schedules. Another risk is the contractor's ability to maintain adequate spare parts inventory and provide timely logistics support, which could lead to aircraft downtime. Failure to meet performance standards could result in contractually defined remedies, such as service-level credits or, in severe cases, termination for default.

How does the firm fixed-price contract type influence the risk and reward balance for both the government and The Boeing Company?

A firm fixed-price (FFP) contract type places the primary cost risk on the contractor, The Boeing Company. This means Boeing is obligated to complete the work for the agreed-upon price, regardless of their actual costs. If their costs exceed the fixed price, their profit margin shrinks, or they could incur a loss. Conversely, if they manage costs efficiently and complete the work for less than the fixed price, their profit margin increases. For the government, the FFP structure provides significant cost certainty, as the total expenditure is known upfront, assuming no contract modifications. This type of contract is generally preferred when the scope of work is well-defined and technical risks are manageable. The reward for the government is predictable budgeting, while the reward for Boeing lies in achieving cost efficiencies and maximizing profit within the fixed price.

What is the estimated total cost of ownership for the T-38C fleet over its remaining service life, and how does this contract contribute to it?

Estimating the total cost of ownership (TCO) for the T-38C fleet over its remaining service life is a complex undertaking that involves projecting costs for sustainment, upgrades, fuel, personnel, and eventual retirement. This $13.5 million contract represents a portion of that TCO, specifically addressing avionics integration and contractor logistics support for a defined period (2021-2026). The T-38C is an aging platform, and ongoing investments in avionics modernization are crucial to keep it relevant and safe for training. This contract aims to enhance the aircraft's capabilities and ensure its operational readiness, thereby extending its useful service life and potentially deferring the need for a costly replacement. The TCO would also encompass future sustainment contracts and potential further upgrades.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: FA821115R0001

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6200 JS MCDONNELL BLVD, SAINT LOUIS, MO, 63134

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: $13,551,494

Exercised Options: $13,551,494

Current Obligation: $13,551,494

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $1,528,265

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA821116D0001

IDV Type: IDC

Timeline