Boeing awarded $37M for C-17 ADS-B Mode 5 upgrades, a sole-source contract
Contract Overview
Contract Amount: $36,999,524 ($37.0M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2017-10-31
End Date: 2021-02-28
Contract Duration: 1,216 days
Daily Burn Rate: $30.4K/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 $37.0 million to THE BOEING COMPANY for work described as: IGF::OT::IGF C-17 ADS-B MODE 5 Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential for overpayment. 2. The contract type (Cost Plus Incentive Fee) can incentivize contractors to manage costs effectively, but also carries inherent risk. 3. Performance period spans over three years, indicating a significant duration for the service delivery. 4. The contractor, Boeing, is a major defense industrial base participant, suggesting established capabilities. 5. The specific nature of the upgrade (ADS-B Mode 5) points to critical aviation safety and modernization efforts. 6. Lack of competition suggests potential reliance on a single supplier for specialized defense technology.
Value Assessment
Rating: questionable
Benchmarking the value of this sole-source contract is challenging due to the absence of competitive bids. The Cost Plus Incentive Fee (CPIF) structure means the final price is tied to performance and cost targets. Without comparable contract data or market analysis for this specific upgrade, it's difficult to definitively assess if the $37 million represents a fair price. The government's ability to negotiate favorable terms is limited in sole-source situations, potentially leading to higher costs than if competition were present.
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 used when only one responsible source is available or when urgent and compelling circumstances exist. The lack of competition means there was no opportunity for price discovery through a bidding process, which could result in higher costs for the government compared to a competitively awarded contract.
Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without multiple bids, the government's negotiating leverage is reduced, potentially leading to less favorable pricing.
Public Impact
The primary beneficiaries are the U.S. Air Force and potentially allied nations operating C-17 aircraft, receiving modernized avionics. The services delivered involve the integration and upgrade of Automatic Dependent Surveillance-Broadcast (ADS-B) Mode 5 systems. This upgrade enhances air traffic control, situational awareness, and safety for C-17 operations globally. The contract supports specialized technical expertise within The Boeing Company, contributing to the defense aerospace workforce.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition, potentially increasing costs for taxpayers.
- CPIF contract type requires careful monitoring to ensure cost control and prevent contractor overruns.
- Lack of transparency in the sole-source justification process could obscure potential alternatives.
- Reliance on a single contractor for critical avionics upgrades poses a long-term supply chain risk.
Positive Signals
- Contract awarded to a prime contractor with extensive experience in aircraft manufacturing and systems integration.
- The upgrade addresses critical safety and modernization requirements for a key strategic airlift asset (C-17).
- The CPIF structure includes incentives, which can encourage efficient performance if structured appropriately.
- The contract duration allows for phased implementation and testing of the new avionics.
Sector Analysis
The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and long product lifecycles. Contracts for aircraft modifications and avionics upgrades are common within this sector, often involving specialized technologies and established prime contractors like Boeing. Spending in this area is driven by modernization needs, technological advancements, and the sustainment of existing fleets. Comparable spending benchmarks are difficult to establish without specific details on the scope and complexity of the ADS-B Mode 5 upgrade.
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 within the provided data. The focus is on a large prime contractor fulfilling a direct requirement, which may limit opportunities for small businesses in this specific procurement.
Oversight & Accountability
Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The Cost Plus Incentive Fee (CPIF) structure necessitates close monitoring of costs and performance against established targets. Transparency regarding the sole-source justification and the specific incentive metrics would be crucial for public accountability. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- C-17 Globemaster III Sustainment Partnership
- Aircraft Avionics Modernization Programs
- Automatic Dependent Surveillance-Broadcast (ADS-B) Implementation
- Defense Logistics Agency (DLA) Aviation Support Contracts
Risk Flags
- Sole-source award
- Cost-reimbursement contract type
- Lack of competitive bidding
Tags
defense, department-of-defense, the-boeing-company, aircraft-manufacturing, avionics, ads-b, c-17, sole-source, cost-plus-incentive-fee, delivery-order, california, modernization
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $37.0 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 $37.0 million.
What is the period of performance?
Start: 2017-10-31. End: 2021-02-28.
What is the specific justification for awarding this contract on a sole-source basis to The Boeing Company?
The provided data indicates the contract was awarded as 'NOT COMPETED'. While the specific justification is not detailed, common reasons for sole-source awards in defense contracting include the existence of only one responsible source capable of providing the required goods or services, urgent and compelling circumstances that preclude competition, or when the acquisition is for a specific system for which the original manufacturer is the only qualified provider. For specialized avionics upgrades like ADS-B Mode 5 on a specific platform like the C-17, it's plausible that Boeing, as the original aircraft manufacturer or a highly specialized avionics provider, was deemed the only entity capable of performing the work within the required timeframe and technical specifications. A formal Justification and Approval (J&A) document would typically detail this rationale.
How does the Cost Plus Incentive Fee (CPIF) structure work in this contract, and what are the potential risks and benefits?
A Cost Plus Incentive Fee (CPIF) contract is a type of cost-reimbursement contract where the contractor is reimbursed for all allowable costs and receives a fee that is adjusted based on whether the final cost is above or below a negotiated target cost. The 'incentive' part means there are target cost goals and sharing arrangements for cost savings or overruns. Benefits include encouraging cost efficiency and performance improvement. Risks for the government include the potential for costs to exceed the target, requiring careful negotiation of the target cost, the sharing ratio, and the ceiling price. Effective oversight is crucial to ensure the contractor is motivated to achieve the best possible outcome within the negotiated parameters.
What is the historical spending trend for C-17 avionics upgrades or similar modifications by the Department of Defense?
Historical spending on C-17 avionics upgrades and similar modifications by the Department of Defense is substantial, reflecting the long service life of the aircraft and the continuous need for technological modernization. While specific figures for 'ADS-B Mode 5' upgrades on the C-17 are not publicly itemized in broad spending reports, the overall sustainment and modernization budget for the C-17 fleet runs into hundreds of millions, and sometimes billions, of dollars annually. This includes investments in avionics, structural enhancements, engine upgrades, and other system improvements. The trend is generally upward as older platforms require more extensive retrofitting to maintain operational relevance and meet evolving regulatory and threat environments. This $37 million contract represents a specific investment within that larger modernization context.
What is The Boeing Company's track record with C-17 aircraft modifications and avionics integration?
The Boeing Company has an extensive and well-established track record with the C-17 Globemaster III program, as they are the original manufacturer. This includes initial production, ongoing sustainment, and numerous modification and upgrade programs throughout the aircraft's service life. Boeing has consistently been involved in integrating new systems, improving performance, and ensuring the C-17 fleet remains operationally capable. Their experience encompasses a wide range of avionics, structural, and mission system enhancements. Therefore, their capability to perform the ADS-B Mode 5 upgrade is well-documented and expected, given their deep familiarity with the platform.
How does the $37 million contract value compare to other recent avionics upgrade contracts for similar large military aircraft?
Comparing the $37 million contract value requires context on the scope and complexity of the upgrade. For large military aircraft, avionics modernization programs can range significantly in cost. Simple component upgrades might cost a few million dollars, while comprehensive system overhauls or the integration of entirely new suites of technology, especially for platforms like the C-17 which are critical strategic assets, can easily reach tens or even hundreds of millions of dollars. Given that this contract covers the integration of ADS-B Mode 5, a significant safety and navigation technology, $37 million appears to be within a reasonable range for a sole-source upgrade on a large, complex military airframe, although a definitive comparison would necessitate detailed technical scope and market analysis.
What are the potential risks associated with relying on a single contractor for critical avionics upgrades like ADS-B Mode 5?
Relying on a single contractor, especially in a sole-source situation, presents several risks. Firstly, there's the risk of reduced price competition, potentially leading to higher costs for the government. Secondly, it can create vendor lock-in, making it difficult and expensive to switch providers in the future if performance issues arise or better alternatives become available. Thirdly, it concentrates supply chain risk; if the sole contractor experiences production delays, quality issues, or financial instability, the government's ability to obtain necessary upgrades or support is severely jeopardized. Finally, it can stifle innovation, as there is less market pressure for the contractor to continuously improve their offerings.
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: $37,905,474
Exercised Options: $37,905,474
Current Obligation: $36,999,524
Actual Outlays: $80,880
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: 2017-10-31
Current End Date: 2021-02-28
Potential End Date: 2021-02-28 00:00:00
Last Modified: 2025-11-04
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