DoD's F-15 sustainment engineering services contract awarded to Boeing for $72M faces limited competition
Contract Overview
Contract Amount: $71,989,581 ($72.0M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2020-04-24
End Date: 2026-06-30
Contract Duration: 2,258 days
Daily Burn Rate: $31.9K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: AIRCRAFT STRUCTURAL INTEGRITY PROGRAM: ENGINEERING SERVICES FOR F-15 SUSTAINMENT
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $72.0 million to THE BOEING COMPANY for work described as: AIRCRAFT STRUCTURAL INTEGRITY PROGRAM: ENGINEERING SERVICES FOR F-15 SUSTAINMENT Key points: 1. The contract is a sole-source award to The Boeing Company for critical F-15 aircraft structural integrity. 2. With a significant value of $72M, the contract spans over six years, indicating long-term reliance on Boeing. 3. The limited competition raises concerns about potential overpricing and lack of innovative solutions. 4. The sector is Defense, specifically aircraft manufacturing and sustainment, a high-stakes area for national security.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee (CPFF) structure, combined with a sole-source award, offers limited incentive for cost control. Benchmarking against similar sole-source sustainment contracts is difficult due to proprietary data, but the lack of competition inherently limits price discovery.
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 significantly limits competition and potentially leads to higher prices than if multiple vendors had competed.
Taxpayer Impact: Taxpayers may be overpaying due to the absence of competitive bidding, as the government lacks leverage to negotiate the best possible price.
Public Impact
Ensures continued operational readiness of the F-15 fighter fleet, a key asset for national defense. Supports high-skilled jobs within the aerospace and defense industry, particularly in Missouri. Potential for increased costs to taxpayers due to the sole-source nature of the award.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price negotiation.
- Cost Plus Fixed Fee contract may not incentivize cost efficiency.
- Long contract duration could lock in potentially inflated costs.
- Lack of clear performance metrics or benchmarks for success.
Positive Signals
- Ensures critical sustainment for a vital military asset.
- Maintains specialized engineering expertise for the F-15 program.
- Provides stability for a key defense contractor.
Sector Analysis
This contract falls within the Defense sector, specifically focusing on aircraft manufacturing and sustainment. Spending in this area is critical for national security, but often involves complex, high-value contracts with limited competitive landscapes due to specialized requirements.
Small Business Impact
The contract data indicates no specific set-aside for small businesses. Given the sole-source nature and the prime contractor being The Boeing Company, it is unlikely that significant portions of this specific contract value will flow down to small businesses unless subcontracted by Boeing.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and effective service delivery. The Department of the Air Force should actively monitor contract performance and costs, and explore competitive options for future sustainment needs.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award limits competitive pricing.
- CPFF contract structure may not incentivize cost savings.
- Lack of transparency in fee determination.
- Potential for vendor lock-in.
- Long-term commitment without guaranteed best value.
Tags
aircraft-manufacturing, department-of-defense, mo, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $72.0 million to THE BOEING COMPANY. AIRCRAFT STRUCTURAL INTEGRITY PROGRAM: ENGINEERING SERVICES FOR F-15 SUSTAINMENT
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 $72.0 million.
What is the period of performance?
Start: 2020-04-24. End: 2026-06-30.
What is the justification for awarding this critical F-15 sustainment contract on a sole-source basis, and have alternatives been thoroughly explored?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can reasonably fulfill the requirement. For this F-15 sustainment contract, the government likely cited Boeing's unique knowledge of the F-15 platform. However, thorough exploration of alternatives, such as competitive bidding for specific engineering tasks or phased competition, should be a priority to ensure taxpayer value and encourage innovation.
How is the 'fixed fee' component of the Cost Plus Fixed Fee (CPFF) contract determined, and does it adequately reflect market rates for these specialized engineering services?
The fixed fee in a CPFF contract is negotiated upfront and represents the contractor's profit. It's typically based on factors like complexity, risk, and estimated effort. Determining if it adequately reflects market rates is challenging without access to Boeing's cost data and competitive bids. However, the absence of competition means the government has less leverage to negotiate this fee down, potentially leading to a higher-than-market fee.
What mechanisms are in place to ensure the long-term effectiveness and efficiency of these engineering services, given the extended contract duration and sole-source award?
Mechanisms for ensuring effectiveness include performance metrics, regular reviews, and quality assurance processes. However, the sole-source nature and long duration can reduce the incentive for continuous improvement. The Department of the Air Force should implement robust performance monitoring, conduct periodic market research for potential future competition, and ensure clear deliverables and milestones are met to maintain accountability and effectiveness.
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
Solicitation ID: FA850519R0017
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: $72,447,581
Exercised Options: $72,447,581
Current Obligation: $71,989,581
Actual Outlays: $946,247
Subaward Activity
Number of Subawards: 2
Total Subaward Amount: $373,080
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
Start Date: 2020-04-24
Current End Date: 2026-06-30
Potential End Date: 2029-04-27 00:00:00
Last Modified: 2025-12-10
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