Boeing awarded $48.9M for C-17 ADS-B Mode 5 upgrades, a sole-source contract
Contract Overview
Contract Amount: $48,945,517 ($48.9M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2017-02-03
End Date: 2020-10-31
Contract Duration: 1,366 days
Daily Burn Rate: $35.8K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: IGF::OT::IGF C-17 ADS-B MODE 5
Place of Performance
Location: HUNTINGTON BEACH, ORANGE County, CALIFORNIA, 92647
Plain-Language Summary
Department of Defense obligated $48.9 million to THE BOEING COMPANY for work described as: IGF::OT::IGF C-17 ADS-B MODE 5 Key points: 1. Contract awarded to a single supplier suggests potential lack of competitive pricing. 2. Sole-source nature raises questions about market research and justification. 3. Contract duration of over three years indicates a significant, long-term need. 4. The contract falls under aircraft manufacturing, a sector with high barriers to entry. 5. Performance-based contract type (Cost Plus Incentive Fee) aims to align contractor incentives with government goals. 6. Geographic location of the awarding agency (California) may influence local economic impact.
Value Assessment
Rating: questionable
The contract's value of $48.9 million for C-17 ADS-B Mode 5 upgrades is difficult to benchmark without comparable sole-source awards. The Cost Plus Incentive Fee (CPIF) structure, while designed to incentivize performance, can lead to cost overruns if not managed diligently. The lack of competition inherently limits the government's ability to secure the best possible price, making value for money a concern.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one bidder, The Boeing Company, was solicited. This approach is typically justified when only one responsible source is available or when a compelling urgency exists. The absence of competition means that price discovery through market forces was not utilized, potentially leading to a higher price than if multiple bids were received.
Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competitive bidding. Without a competitive process, there is less assurance that the price reflects fair market value.
Public Impact
The primary beneficiary is the U.S. Department of Defense, specifically the C-17 fleet, enhancing its operational capabilities. The service delivered is the integration of ADS-B Mode 5 technology, crucial for modern air traffic management and situational awareness. The geographic impact is national, supporting the readiness of a key strategic airlift asset. Workforce implications are likely concentrated within The Boeing Company's aerospace manufacturing and engineering divisions.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and potentially increases costs for taxpayers.
- CPIF contract type requires robust government oversight to manage costs effectively.
- Lack of transparency in the sole-source justification process.
- Potential for contractor lock-in due to specialized nature of C-17 modifications.
Positive Signals
- Contract addresses a critical upgrade for a vital military aircraft (C-17).
- CPIF structure incentivizes contractor performance and efficiency.
- Awardee is a major aerospace manufacturer with established expertise in C-17.
- Contract duration allows for planned integration and testing.
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft modification and avionics upgrades. The market for C-17 specific modifications is inherently limited, often dominated by the original equipment manufacturer due to proprietary knowledge and design control. Comparable spending benchmarks are difficult to establish for sole-source, highly specialized upgrades, but the overall defense aircraft modification market is substantial, driven by the need to maintain and modernize aging fleets.
Small Business Impact
This contract does not appear to involve small business set-asides, as it was awarded directly to The Boeing Company. There is no explicit information regarding subcontracting plans for small businesses. The focus on a large, sole-source prime contractor suggests limited direct opportunities for small businesses within this specific award, though Boeing may engage them for lower-tier support.
Oversight & Accountability
Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. The CPIF structure necessitates rigorous financial and performance monitoring by the government to control costs and verify that incentives are met. Transparency regarding the sole-source justification and ongoing performance metrics would be key accountability measures.
Related Government Programs
- C-17 Globemaster III Sustainment Partnership
- Air Traffic Control Modernization Programs
- Military Aircraft Avionics Upgrades
- Defense Logistics Agency Contracts
Risk Flags
- Sole-source award
- Potential for cost overruns (CPIF)
- Lack of competitive pricing assurance
Tags
defense, department-of-defense, aircraft-manufacturing, avionics, c-17, sole-source, cost-plus-incentive-fee, california, delivery-order, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $48.9 million to THE BOEING COMPANY. IGF::OT::IGF C-17 ADS-B MODE 5
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 $48.9 million.
What is the period of performance?
Start: 2017-02-03. End: 2020-10-31.
What specific justification was provided for awarding this contract on a sole-source basis to The Boeing Company?
Sole-source contracts are typically awarded when only one responsible source is available to meet the government's needs, or when a compelling urgency dictates that the government could not otherwise obtain the supplies or services. For specialized aircraft modifications like the C-17 ADS-B Mode 5 upgrade, the original equipment manufacturer (OEM), in this case, Boeing, often possesses unique technical data, intellectual property, and manufacturing capabilities essential for the modification. The justification would likely detail why other potential sources could not meet the technical requirements or schedule, and why competition was not feasible or advantageous. Without access to the specific justification document (e.g., Justification and Approval - J&A), the precise reasons remain unconfirmed, but common factors include proprietary technology, unique tooling, or extensive prior experience with the specific platform.
How does the Cost Plus Incentive Fee (CPIF) structure compare to other contract types in terms of cost control for this type of upgrade?
The Cost Plus Incentive Fee (CPIF) contract type is designed to share the risks and rewards between the government and the contractor. The government pays the actual allowable costs incurred by the contractor, plus a fee that is adjusted based on performance against pre-determined targets (e.g., cost, schedule, or technical performance). Compared to a Cost Plus Fixed Fee (CPFF) contract, CPIF offers greater incentive for the contractor to control costs, as exceeding targets can reduce the fee. However, it is generally considered less cost-certain than a Firm-Fixed-Price (FFP) contract, where the price is set upfront. For complex, evolving technological upgrades like avionics modernization, where initial cost estimates can be uncertain, CPIF can be advantageous by encouraging efficiency while still allowing for adjustments based on actual performance. Effective management and clear target setting are crucial to realizing the cost-control benefits of CPIF.
What are the potential risks associated with a sole-source award for aircraft modifications?
The primary risk of a sole-source award is the potential for inflated pricing due to the absence of competitive pressure. Without competing bids, the government may not achieve the best possible value for its expenditure. Another risk is reduced innovation, as the sole provider may have less incentive to develop more cost-effective or advanced solutions. Furthermore, sole-source awards can lead to contractor 'lock-in,' where the government becomes dependent on a single supplier, making future procurements more difficult and potentially more expensive. There's also a risk that the sole-source justification itself may not be robust, potentially masking a failure to adequately explore competitive options. Finally, without competition, oversight becomes even more critical to ensure the contractor is performing efficiently and ethically.
What is the historical spending trend for C-17 aircraft modifications or similar avionics upgrades within the Department of Defense?
Historical spending on C-17 aircraft modifications and similar avionics upgrades within the Department of Defense (DoD) has been substantial and ongoing. The DoD consistently invests in modernizing its fleet to maintain technological superiority and operational readiness. Programs often involve upgrades to communication, navigation, surveillance, and electronic warfare systems. Spending on such modifications can fluctuate based on fleet age, evolving threats, and technological advancements. While specific figures for C-17 avionics upgrades vary year by year, the overall trend shows a sustained commitment to life-cycle support and modernization for major platforms. This particular $48.9 million award represents a segment of this broader, continuous investment in maintaining and enhancing the capabilities of strategic airlift assets.
How does the ADS-B Mode 5 upgrade contribute to the overall operational effectiveness and safety of the C-17 fleet?
The Automatic Dependent Surveillance-Broadcast (ADS-B) system is a key component of modern air traffic management. Mode 5 is an advanced version that provides more precise and secure surveillance capabilities. For the C-17 fleet, upgrading to ADS-B Mode 5 enhances situational awareness for pilots by providing more accurate information about surrounding aircraft. It also improves air traffic control's ability to manage airspace, particularly in complex or congested environments. This upgrade is crucial for meeting international mandates for ADS-B equipage and ensures the C-17 can operate safely and efficiently in global airspace, including in military operational areas where precise tracking and identification are critical for mission success and deconfliction. Ultimately, it bolsters both operational effectiveness and safety.
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
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Address: 14441 ASTRONAUTICS LN, HUNTINGTON BEACH, CA, 92647
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: $49,991,066
Exercised Options: $49,024,607
Current Obligation: $48,945,517
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA852612D0001
IDV Type: IDC
Timeline
Start Date: 2017-02-03
Current End Date: 2020-10-31
Potential End Date: 2020-10-31 00:00:00
Last Modified: 2024-09-03
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