Boeing awarded $26.7M for F-15 rewire, a sole-source contract for critical aircraft sustainment

Contract Overview

Contract Amount: $26,710,001 ($26.7M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2019-09-25

End Date: 2022-07-22

Contract Duration: 1,031 days

Daily Burn Rate: $25.9K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: F-15 SILVER FLEET REWIRE

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $26.7 million to THE BOEING COMPANY for work described as: F-15 SILVER FLEET REWIRE Key points: 1. Contract awarded to a single supplier, raising questions about price competitiveness. 2. Focus on sustainment of existing F-15 fleet indicates ongoing need for specialized maintenance. 3. Long performance period suggests complex, multi-year integration and execution. 4. Firm Fixed Price contract type aims to control costs, but initial pricing needs scrutiny. 5. Lack of competition may limit opportunities for innovation and cost reduction from alternative providers. 6. Contract value is significant, underscoring the importance of the F-15's operational readiness.

Value Assessment

Rating: fair

The contract value of $26.7 million for the F-15 SILVER FLEET REWIRE appears substantial. Without direct comparable contracts for this specific rewire task, it's difficult to benchmark precisely. However, given the specialized nature of aircraft rewiring and the sole-source award to a prime manufacturer like Boeing, costs are likely to reflect proprietary knowledge and integrated support. Further analysis would require understanding the scope of work and comparing labor/material costs to industry averages for similar complex aircraft modifications.

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 a product or service is unique and only available from a single source, or in cases of urgent need. The lack of competition means that taxpayers did not benefit from a competitive bidding process, which could have potentially driven down prices or spurred innovation from multiple vendors.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage market competition to secure the best possible price for taxpayers. This contract's value is set without the pressure of competing bids.

Public Impact

The primary beneficiaries are the U.S. Air Force units operating the F-15 fighter jet fleet, ensuring continued operational capability. The services delivered involve critical maintenance and upgrades to the electrical systems of F-15 aircraft. The geographic impact is likely concentrated around F-15 operational bases and maintenance depots. Workforce implications include specialized technicians and engineers at Boeing and potentially its subcontractors involved in aircraft sustainment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Long contract duration could lead to cost overruns if not managed tightly.
Reliance on a single contractor for critical sustainment may create vendor lock-in.

Positive Signals

Firm Fixed Price contract type provides cost certainty for the government.
Award to the original equipment manufacturer (Boeing) ensures specialized knowledge and integration.
Focus on fleet rewire addresses critical safety and performance requirements for aging aircraft.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex supply chains, and significant government investment. Aircraft manufacturing and sustainment, particularly for advanced platforms like the F-15, represent a specialized niche. Spending in this area is driven by national security requirements and the need to maintain a technologically superior military. Comparable spending benchmarks would involve other major aircraft sustainment contracts for legacy platforms, often awarded to prime contractors due to unique technical expertise.

Small Business Impact

This contract does not appear to have a small business set-aside component, as it was awarded directly to The Boeing Company. There is no explicit information regarding subcontracting plans for small businesses within this award. The lack of a set-aside means opportunities for small businesses to directly participate in this specific contract are limited unless they are part of Boeing's established supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contract management agencies, such as the Defense Contract Management Agency (DCMA). Accountability measures are embedded in the Firm Fixed Price contract type, which shifts cost risk to the contractor. Transparency is generally maintained through contract databases, though specific performance metrics and oversight reports may not always be publicly available.

Related Government Programs

F-15 Aircraft Sustainment Programs
Defense Logistics Agency (DLA) Aviation Support
Air Force Materiel Command (AFMC) Contracts
Aircraft Electrical System Modernization Projects

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns (mitigated by FFP)
Reliance on single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.7 million to THE BOEING COMPANY. F-15 SILVER FLEET REWIRE

Who is the contractor on this award?

The obligated recipient is THE BOEING COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $26.7 million.

What is the period of performance?

Start: 2019-09-25. End: 2022-07-22.

What is the specific scope of work for the F-15 SILVER FLEET REWIRE, and what components are included in the rewiring process?

The F-15 SILVER FLEET REWIRE contract, valued at approximately $26.7 million, focuses on the comprehensive replacement and upgrade of electrical wiring systems within the F-15 fighter jet fleet. While the exact scope is proprietary, rewiring typically involves the removal of aging or damaged wiring harnesses and the installation of new, potentially upgraded, wiring that meets current military specifications. This can include power distribution, data transmission lines, and specialized wiring for avionics, weapons systems, and environmental controls. The goal is to enhance reliability, reduce the risk of electrical failures, improve maintainability, and potentially support future system upgrades. The contract's duration of over 1000 days suggests a phased approach to rewiring multiple aircraft.

How does the $26.7 million contract value compare to historical spending on F-15 sustainment or similar aircraft rewiring projects?

Benchmarking the $26.7 million F-15 SILVER FLEET REWIRE contract against historical spending requires access to detailed cost data for similar projects. However, the value is significant for a specific sustainment task like rewiring. Major aircraft sustainment contracts can range from tens to hundreds of millions of dollars annually, depending on the fleet size, age, and complexity of required maintenance. Rewiring a fleet of advanced fighter jets is a labor-intensive and technically demanding process. Without specific comparable data points for F-15 rewiring, it's challenging to definitively state if this represents high or low spending. However, given it's a sole-source award to the prime manufacturer, the cost likely reflects specialized expertise and integrated support, which can be higher than competitive bids for less specialized maintenance.

What are the primary risks associated with a sole-source award for critical aircraft sustainment like this F-15 rewire?

The primary risk associated with a sole-source award for critical aircraft sustainment, such as the F-15 SILVER FLEET REWIRE, is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government may not achieve the best possible value for its investment. Another risk is vendor lock-in, where the reliance on a single provider for specialized services can make it difficult and costly to switch contractors in the future. Furthermore, a sole-source award might reduce the incentive for the contractor to innovate or seek efficiencies, as there is no direct competition to outperform. Finally, if the sole-source provider experiences financial difficulties or operational issues, it could significantly disrupt the sustainment of the F-15 fleet.

What is the track record of The Boeing Company in performing similar aircraft sustainment and modification contracts for the U.S. military?

The Boeing Company has an extensive and long-standing track record of performing aircraft sustainment and modification contracts for the U.S. military, including for the F-15 program. As the original equipment manufacturer (OEM) for many platforms, Boeing possesses deep institutional knowledge, proprietary technical data, and specialized engineering capabilities essential for complex maintenance and upgrades. They have historically managed large-scale sustainment programs for various aircraft, including fighters, bombers, and transport planes. While specific performance metrics for individual contracts are often not public, Boeing's continued role as a prime contractor for critical defense systems indicates a generally accepted capability to meet military requirements, though like any large contractor, they may face scrutiny on specific contract performance and pricing.

How does the Firm Fixed Price (FFP) contract type mitigate risks for the government in this sole-source scenario?

The Firm Fixed Price (FFP) contract type is a key mechanism for mitigating risk for the government, even in a sole-source scenario like the F-15 SILVER FLEET REWIRE. Under an FFP contract, the price is set and not subject to adjustment based on the contractor's cost experience. This means that The Boeing Company assumes the primary risk for cost overruns. If their costs to perform the rewiring exceed their estimates, their profit margin will decrease, but the government's expenditure remains fixed at the agreed-upon price. This provides budget certainty and protects taxpayer funds from unexpected increases in the contractor's expenses. However, the initial price negotiation in a sole-source environment is critical to ensure it is fair and reasonable.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA850518R0006

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: $26,710,001

Exercised Options: $26,710,001

Current Obligation: $26,710,001

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $9,018,050

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA863417D2696

IDV Type: IDC

Timeline