Boeing awarded $112.9M for C-17 sustainment, a sole-source contract for aircraft manufacturing
Contract Overview
Contract Amount: $112,910,432 ($112.9M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2018-04-16
End Date: 2024-09-30
Contract Duration: 2,359 days
Daily Burn Rate: $47.9K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: C-17 SUSTAINMENT
Place of Performance
Location: HUNTINGTON BEACH, ORANGE County, CALIFORNIA, 92647
Plain-Language Summary
Department of Defense obligated $112.9 million to THE BOEING COMPANY for work described as: C-17 SUSTAINMENT Key points: 1. Contract awarded to a single supplier, raising questions about price competitiveness. 2. Long-term sustainment contract indicates critical need for C-17 aircraft support. 3. Focus on aircraft manufacturing suggests potential for specialized technical expertise. 4. Contract duration of nearly two years highlights ongoing operational requirements. 5. Geographic location in California may influence labor costs and supply chain logistics.
Value Assessment
Rating: questionable
The contract's value of $112.9 million for C-17 sustainment is difficult to benchmark without comparable sole-source awards. As a sole-source contract, there is an inherent risk of overpayment due to a lack of competitive pressure. Further analysis would be needed to determine if the pricing reflects fair market value for the services provided, especially considering the specialized nature of aircraft sustainment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities or when urgency dictates a rapid award. The lack of competition means that price discovery through market forces was bypassed, potentially leading to higher costs for the government.
Taxpayer Impact: Taxpayers may be paying a premium for this aircraft sustainment due to the absence of competitive bidding. Without competing offers, it is harder to ensure the most cost-effective solution was secured.
Public Impact
The U.S. Department of Defense benefits from the continued operational readiness of its C-17 fleet. Services delivered include essential maintenance, repair, and logistical support for C-17 aircraft. The contract's impact is primarily felt within the defense sector, ensuring air mobility capabilities. Workforce implications include the need for skilled aircraft mechanics and technicians in California.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing and potentially increases costs.
- Lack of transparency in pricing due to non-competitive nature.
- Long-term sustainment contracts can sometimes mask inefficiencies if not closely monitored.
Positive Signals
- Ensures critical sustainment for a vital military asset (C-17).
- Boeing's established expertise in C-17 manufacturing suggests high technical capability.
- Long contract duration provides stability for planning and resource allocation.
Sector Analysis
The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and long product lifecycles. Sustainment contracts like this are crucial for maintaining the operational readiness of complex military platforms. Spending in this area is often dictated by strategic defense needs rather than market fluctuations. Comparable spending benchmarks are difficult to establish due to the unique nature of military aircraft sustainment and the proprietary data of contractors.
Small Business Impact
This contract does not appear to have a small business set-aside component. As a sole-source award to a large prime contractor, there is a potential for limited subcontracting opportunities for small businesses unless specifically mandated. The impact on the small business ecosystem would depend on Boeing's subcontracting strategy and any government requirements for small business participation.
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 would include performance reviews, milestone tracking, and financial audits. Transparency is limited due to the sole-source nature, but contract modifications and performance reports are usually available through federal procurement databases.
Related Government Programs
- C-17 Globemaster III Operations and Support
- Air Mobility Command Sustainment Programs
- Defense Logistics Agency Aircraft Parts Procurement
- Aircraft Manufacturing and Maintenance Services
Risk Flags
- Sole-source award
- Potential for cost overruns
- Lack of competitive pricing
Tags
defense, department-of-defense, aircraft-manufacturing, sustainment, c-17, the-boeing-company, sole-source, cost-plus-fixed-fee, delivery-order, california, aircraft-manufacturing
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $112.9 million to THE BOEING COMPANY. C-17 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 $112.9 million.
What is the period of performance?
Start: 2018-04-16. End: 2024-09-30.
What is Boeing's track record with C-17 sustainment contracts?
Boeing has been the sole manufacturer of the C-17 Globemaster III since its inception and has historically been the primary provider of sustainment services. Their track record is extensive, encompassing production, upgrades, and ongoing maintenance for the global C-17 fleet. This long-standing relationship suggests a deep understanding of the aircraft's complex systems and operational requirements. However, the lack of competition in sustainment over the years means that performance metrics and cost-effectiveness are often evaluated internally or through limited government reviews rather than direct market comparisons.
How does the pricing of this sole-source contract compare to potential competitive bids?
Direct comparison of this sole-source contract's pricing to potential competitive bids is not feasible without access to proprietary cost data and market analysis. Sole-source awards inherently bypass the price discovery mechanism of competitive bidding, which typically drives down costs. The government relies on negotiation and cost-reimbursement structures, along with audits, to ensure reasonableness. Without competitive benchmarks, it is challenging to definitively state if this $112.9 million award represents optimal value for taxpayers compared to what might have been achieved through a competed process.
What are the primary risks associated with a sole-source sustainment contract for critical aircraft?
The primary risks associated with a sole-source sustainment contract for critical aircraft like the C-17 include potential cost overruns due to the absence of competitive pressure, reduced incentive for contractor efficiency, and a lack of innovation. There's also a risk of vendor lock-in, where the government becomes overly reliant on a single provider, potentially limiting future flexibility. Furthermore, without open competition, ensuring the most advanced or cost-effective sustainment solutions are being employed can be more challenging, requiring robust government oversight and negotiation.
How effective is the C-17 sustainment program in ensuring the operational readiness of the U.S. Air Force's air mobility fleet?
The C-17 sustainment program, managed by Boeing, is generally considered effective in maintaining the operational readiness of the U.S. Air Force's air mobility fleet. The C-17 is a critical asset for strategic airlift, and its availability is paramount. Historical performance suggests that Boeing has met the demands for keeping these aircraft flying. However, the effectiveness is often measured against internal readiness goals and availability rates rather than direct comparisons to alternative sustainment models. Continuous monitoring and performance metrics are key to ensuring ongoing effectiveness.
What are the historical spending patterns for C-17 sustainment, and how does this award fit within that trend?
Historical spending on C-17 sustainment has been substantial, reflecting the aircraft's importance and the complexity of its maintenance requirements. Annual sustainment costs can run into hundreds of millions of dollars across the entire fleet. This $112.9 million award represents a significant portion of the total sustainment budget for a specific period (April 2018 to September 2024). While specific year-over-year spending can fluctuate based on maintenance needs, upgrades, and contract actions, this award aligns with the established trend of significant, ongoing investment required to maintain the C-17 fleet's operational capability.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: COST PLUS FIXED FEE (U)
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: $148,386,632
Exercised Options: $148,386,632
Current Obligation: $112,910,432
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: 2018-04-16
Current End Date: 2024-09-30
Potential End Date: 2024-09-30 00:00:00
Last Modified: 2026-01-12
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