Boeing awarded $15.1M for T-38C avionics integration and logistics support by the Air Force

Contract Overview

Contract Amount: $15,069,795 ($15.1M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2021-07-29

End Date: 2026-07-31

Contract Duration: 1,828 days

Daily Burn Rate: $8.2K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

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 $15.1 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. Competition was robust, indicating potential for competitive pricing and value. 3. The contract type (Cost Plus Fixed Fee) may present cost-reimbursement risks if not closely managed. 4. Performance period spans over four years, suggesting a long-term need for these services. 5. This contract falls within the broader aerospace and defense sector, supporting pilot training infrastructure. 6. The award to a major defense contractor like Boeing is typical for complex aircraft systems.

Value Assessment

Rating: good

The total award amount of $15.1 million for avionics integration and contractor logistics support for the T-38C appears reasonable given the scope and duration. Benchmarking against similar avionics upgrade contracts for training aircraft is challenging without more specific details on the technological advancements and support requirements. However, the Cost Plus Fixed Fee (CPFF) contract type suggests that the government will reimburse allowable costs plus a fixed fee, which can lead to cost overruns if not meticulously monitored. The fixed fee component aims to provide some cost control, but the overall value will depend heavily on the efficiency of the contractor and the government's oversight.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple capable vendors had the opportunity to bid. The specific number of bidders is not provided, but full and open competition generally fosters a competitive environment that can lead to better pricing and innovation. This approach allows the government to select the best value solution from a wide range of potential offerors, maximizing the use of taxpayer funds.

Taxpayer Impact: Full and open competition is the most advantageous for taxpayers as it maximizes the potential for competitive pricing and ensures that the government receives the best possible value for its investment.

Public Impact

The primary beneficiaries are the U.S. Air Force pilots undergoing training, who will benefit from modernized and reliable T-38C aircraft. The contract delivers essential avionics integration services and ongoing contractor logistics support, ensuring the operational readiness of the T-38C fleet. The geographic impact is primarily centered around Air Force training bases where the T-38C is utilized. Workforce implications include skilled technicians and engineers at Boeing responsible for the integration and support tasks.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type introduces potential for cost overruns if not managed tightly.
Long-term nature of the contract requires sustained oversight to ensure continued value.
Dependence on a single contractor for critical avionics and logistics could pose supply chain risks.

Positive Signals

Awarded under full and open competition, suggesting competitive pricing and vendor selection.
Focus on critical training aircraft ensures continued readiness for pilot development.
Contracting with a reputable firm like Boeing provides access to established expertise.

Sector Analysis

This contract operates within the aerospace and defense sector, specifically supporting military training aircraft. The market for aircraft component integration and logistics support is highly specialized, dominated by large defense contractors with the necessary technical expertise and security clearances. Spending in this area is driven by the need to maintain aging fleets and incorporate modern technologies to meet evolving operational requirements. Comparable spending benchmarks would typically involve other major aircraft sustainment and upgrade programs within the Department of Defense.

Small Business Impact

The provided data indicates that this contract was not specifically set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. Given the nature of avionics integration and complex logistics support for a major aircraft platform like the T-38C, it is likely that the prime contractor, Boeing, will engage various subcontractors. The extent to which small businesses will participate will depend on Boeing's subcontracting strategy and the availability of specialized small business capabilities within the supply chain.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Air Force contracting and program management offices. They will be responsible for monitoring contractor performance, reviewing costs, and ensuring compliance with contract terms. The Cost Plus Fixed Fee structure necessitates rigorous financial oversight to validate incurred costs and the reasonableness of the fixed fee. Transparency is generally maintained through contract reporting requirements, though specific details of performance metrics and financial expenditures may be subject to proprietary or security considerations.

Related Government Programs

T-38 Talon Sustainment Programs
Air Force Pilot Training Modernization Efforts
Aerospace Component Manufacturing and Integration
Defense Contractor Logistics Support Services

Risk Flags

Cost Overrun Risk (CPFF)
Performance Monitoring Complexity
Long-Term Sustainment Dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.1 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 $15.1 million.

What is the period of performance?

Start: 2021-07-29. End: 2026-07-31.

What is the historical spending trend for T-38C avionics upgrades and logistics support from the Department of Defense?

Analyzing historical spending for T-38C avionics upgrades and logistics support requires a review of past contracts awarded for similar services. While specific figures for this exact scope are not immediately available in the provided data, the T-38C has been in service for decades, undergoing various upgrades and requiring continuous sustainment. Historically, the Air Force has allocated significant funds to maintain and modernize its training fleet to ensure pilot readiness. Spending patterns would likely show cyclical investments in major avionics overhauls and consistent, albeit potentially fluctuating, annual expenditures for contractor logistics support. Factors influencing these trends include the aircraft's age, technological obsolescence, operational tempo, and budget allocations. A comprehensive analysis would involve examining contract databases for previous T-38C related awards over the last 10-20 years to identify trends in contract values, types, and durations.

How does the awarded amount of $15.1 million compare to the estimated value of similar avionics integration contracts for training aircraft?

The $15.1 million award for T-38C avionics integration and contractor logistics support needs to be contextualized against similar procurements. Avionics integration projects can vary significantly in cost depending on the complexity of the systems being upgraded, the number of aircraft involved, and the specific technologies being implemented. For training aircraft, costs might be lower than for front-line combat platforms, but still substantial due to the need for reliability and specific training functionalities. Without access to a database of comparable training aircraft avionics contracts, a precise benchmark is difficult. However, contracts for integrating new communication, navigation, or sensor systems into aircraft typically range from several million to tens of millions of dollars. The duration of this contract (over four years) suggests a phased integration and ongoing support, which influences the total value. The fact that it was competitively procured suggests the price reflects market conditions for such services.

What are the key performance indicators (KPIs) that will be used to assess Boeing's performance under this contract?

While the specific Key Performance Indicators (KPIs) are not detailed in the provided summary data, contracts of this nature typically include metrics focused on several critical areas. For avionics integration, KPIs might involve adherence to integration schedules, successful testing and validation of new systems, and the number of integration-related issues encountered. For contractor logistics support (CLS), common KPIs include aircraft availability rates, response times for maintenance and repair, parts availability, and turnaround times for repairs. Mission capable rates for the T-38C fleet would be a crucial overarching metric. The Cost Plus Fixed Fee (CPFF) structure also implies that financial performance, including adherence to budget projections for reimbursable costs and efficient management of the fixed fee, will be closely monitored. The Air Force will likely have defined thresholds for these KPIs, with potential incentives or penalties tied to performance outcomes.

What is the potential impact of the Cost Plus Fixed Fee (CPFF) contract type on cost control and contractor incentive?

The Cost Plus Fixed Fee (CPFF) contract type is designed to provide flexibility when the exact costs are difficult to estimate upfront, such as in complex integration projects. Under CPFF, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure incentivizes the contractor to control costs, as the fee remains constant regardless of the final cost of the project. However, it also places a significant burden on the government's oversight to ensure that all costs claimed are reasonable, allocable, and allowable. Unlike fixed-price contracts, there is less direct financial incentive for the contractor to minimize costs beyond what is necessary to achieve the fixed fee. If costs escalate significantly, the government bears the brunt, although the fixed fee itself is not meant to increase. Effective management requires robust government auditing and monitoring of expenditures.

What is the significance of the T-38C aircraft in the context of Air Force pilot training and its role in supporting this contract?

The T-38C Talon is a twin-engine, supersonic jet trainer aircraft that has been a cornerstone of U.S. Air Force pilot training for decades. It is used to train pilots for virtually all Air Force combat aircraft, as well as for some NASA astronauts and U.S. Navy pilots. Its role is critical because it provides student pilots with experience in high-performance jet operations, including tactical maneuvering, instrument flight, and formation flying, before they transition to their operational platforms. Consequently, maintaining the T-38C fleet's readiness and modernizing its avionics are paramount to the Air Force's ability to produce a sufficient number of qualified pilots. This contract directly supports that mission by ensuring the T-38C's avionics are up-to-date and that the aircraft remain operational through comprehensive logistics support, thereby underpinning the entire pilot training pipeline.

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: COST PLUS FIXED FEE (U)

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: $15,069,795

Exercised Options: $15,069,795

Current Obligation: $15,069,795

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