Boeing awarded $266M for F117 engine sustainment, a sole-source contract with a 2-year duration
Contract Overview
Contract Amount: $265,997,565 ($266.0M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2016-10-01
End Date: 2018-09-30
Contract Duration: 729 days
Daily Burn Rate: $364.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: IGF::OT::IGF F117 ENGINE SUSTAINMENT
Place of Performance
Location: HUNTINGTON BEACH, ORANGE County, CALIFORNIA, 92647
Plain-Language Summary
Department of Defense obligated $266.0 million to THE BOEING COMPANY for work described as: IGF::OT::IGF F117 ENGINE SUSTAINMENT Key points: 1. Contract awarded to a single supplier, raising questions about price competitiveness. 2. Limited competition may lead to higher costs for taxpayers. 3. The contract duration of 729 days suggests a need for ongoing sustainment services. 4. Fixed-price contract type aims to control costs, but initial pricing needs scrutiny. 5. Sustainment services are critical for maintaining operational readiness of aircraft. 6. The award falls within the aircraft manufacturing sector, dominated by large prime contractors.
Value Assessment
Rating: questionable
Benchmarking the value of this sole-source contract is challenging without competitive bids. The total award of $266 million for a two-year sustainment period for F117 engines requires careful review to ensure it aligns with industry standards for similar services. Without comparable contracts or market data, it's difficult to definitively assess if the pricing represents good value for money. The lack of competition inherently limits the ability to validate cost-effectiveness.
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 bypasses the standard competitive bidding process. While sole-source awards can be justified in specific circumstances, such as when only one entity possesses the necessary expertise or technology, it significantly reduces the potential for price discovery through market competition. The absence of multiple bidders means taxpayers do not benefit from the downward pressure on prices that typically occurs in a competitive environment.
Taxpayer Impact: The lack of competition means taxpayers likely paid a premium compared to what might have been achieved through a competitive solicitation. This limits the government's ability to secure the best possible price for essential sustainment services.
Public Impact
The primary beneficiaries are the Department of Defense and its operational units relying on F117-powered aircraft. Services delivered include sustainment, maintenance, and repair of F117 engines. The geographic impact is likely global, supporting deployed military assets. Workforce implications include specialized technicians and engineers required for engine sustainment.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and potentially increases costs.
- Lack of transparency in the justification for sole-source procurement.
- Potential for cost overruns if pricing is not rigorously managed.
- Dependence on a single contractor for critical sustainment services.
Positive Signals
- Contract ensures continued operational readiness of critical aircraft.
- Fixed-price contract type provides some cost certainty.
- Boeing's established expertise in aircraft and engine sustainment.
Sector Analysis
The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and a reliance on a few large prime contractors. Engine sustainment is a critical component of this sector, ensuring the longevity and operational capability of aircraft fleets. Spending in this area is substantial, driven by the high cost of advanced engine technology and the need for continuous maintenance to meet stringent performance and safety requirements. Comparable spending benchmarks are difficult to establish precisely due to the proprietary nature of engine technology and sustainment contracts.
Small Business Impact
This contract does not appear to involve small business set-asides. As a sole-source award to a large prime contractor, there are limited direct opportunities for small businesses to participate as prime contractors. Subcontracting opportunities may exist, but their extent and nature would depend on Boeing's internal subcontracting strategy and requirements, which are not detailed in the provided data.
Oversight & Accountability
Oversight for this contract would typically fall under the purview of the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are embedded within the contract terms, including performance standards and payment schedules. Transparency is limited due to the sole-source nature of the award; however, contract modifications and performance reports are usually subject to internal review and potentially Inspector General oversight if performance issues arise.
Related Government Programs
- Aircraft Engine Maintenance
- Defense Logistics Agency Support
- Air Force Sustainment Programs
- Naval Aviation Maintenance
Risk Flags
- Sole-source award
- Lack of competitive bidding
- Potential for inflated pricing
- Limited transparency on justification
Tags
defense, department-of-defense, the-boeing-company, aircraft-manufacturing, engine-sustainment, sole-source, firm-fixed-price, delivery-order, california, defense-contract-management-agency
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $266.0 million to THE BOEING COMPANY. IGF::OT::IGF F117 ENGINE 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 (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $266.0 million.
What is the period of performance?
Start: 2016-10-01. End: 2018-09-30.
What is the historical spending pattern for F117 engine sustainment, and how does this award compare?
Historical spending data for F117 engine sustainment prior to this specific contract award is not provided in the given data. However, the total award of $265,997,565.01 over approximately two years (729 days) suggests an average annual expenditure of roughly $133 million. To assess if this is comparable, one would need to examine previous contracts for the same or similar sustainment services, considering factors like inflation, scope of work changes, and engine fleet size. Without this historical context, it's difficult to determine if this award represents an increase, decrease, or stable level of spending for F117 engine sustainment.
What specific justification was provided for awarding this contract on a sole-source basis?
The provided data indicates the contract type is 'NOT COMPETED,' which is synonymous with a sole-source award. However, the specific justification for this sole-source determination is not included in the data snippet. Typically, sole-source awards require a formal justification, such as the existence of only one responsible source capable of providing the required service or supply, or in cases of urgent and compelling need where competition is not feasible. Without access to the contract file or official justification documents, the rationale behind bypassing the competitive bidding process remains unknown.
What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this engine sustainment contract?
The provided data does not detail the specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this F117 engine sustainment contract. In typical sustainment contracts, KPIs often relate to engine availability rates, turnaround times for repairs, Mean Time Between Failures (MTBF), and adherence to maintenance schedules. SLAs would define the expected level of service, response times, and quality standards. These metrics are crucial for measuring contractor performance and ensuring the operational readiness of the aircraft fleet. Their absence in the summary data limits a thorough assessment of performance expectations.
What is Boeing's track record with similar sole-source sustainment contracts for military aircraft engines?
The provided data does not offer insight into Boeing's specific track record with similar sole-source sustainment contracts for military aircraft engines. However, as a major aerospace manufacturer, Boeing has extensive experience in providing sustainment and support services for various military platforms. Assessing their track record would involve reviewing past performance evaluations, contract awards (both competed and sole-source), and any documented issues or successes related to engine sustainment programs across different military branches. A comprehensive review would look at their ability to meet performance metrics, manage costs effectively, and maintain high levels of operational support.
How does the fixed-price contract type mitigate risks for the government in a sole-source scenario?
A Firm Fixed Price (FFP) contract type, as indicated for this award, aims to mitigate risks for the government by establishing a ceiling price that the contractor must adhere to, regardless of their actual costs. In a sole-source scenario, where competition is absent, FFP is particularly important as it shifts the risk of cost overruns from the government to the contractor. This means Boeing is responsible for managing its expenses to deliver the specified sustainment services within the agreed-upon price. While FFP provides cost certainty, the initial price negotiation is critical, and the government must ensure the baseline price is fair and reasonable, even without competitive benchmarks.
What is the estimated remaining useful life of the F117 engines covered by this contract?
The provided data does not contain information regarding the estimated remaining useful life of the F117 engines. This information is critical for long-term sustainment planning and budgeting. Engine sustainment contracts are often structured based on projected usage, maintenance cycles, and the anticipated operational lifespan of the engines. Understanding the remaining useful life would help in evaluating the long-term value and necessity of this contract, as well as informing decisions about potential engine upgrades or replacements in the future.
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
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 5301 BOLSA AVE, HUNTINGTON BEACH, CA, 92647
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $265,997,565
Exercised Options: $265,997,565
Current Obligation: $265,997,565
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA852612D0001
IDV Type: IDC
Timeline
Start Date: 2016-10-01
Current End Date: 2018-09-30
Potential End Date: 2018-09-30 00:00:00
Last Modified: 2023-06-01
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