Air Force awards $62.2M contract for F-117 engine support to Boeing, bypassing competition

Contract Overview

Contract Amount: $62,179,129 ($62.2M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2018-06-27

End Date: 2020-09-30

Contract Duration: 826 days

Daily Burn Rate: $75.3K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FMS REQUIREMENT FOR F-117 ENGINES, QUICK EXCHANGE KITS, AND ENGINE SUPPORT HANDLING EQUIPMENT

Place of Performance

Location: HUNTINGTON BEACH, ORANGE County, CALIFORNIA, 92647

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $62.2 million to THE BOEING COMPANY for work described as: FMS REQUIREMENT FOR F-117 ENGINES, QUICK EXCHANGE KITS, AND ENGINE SUPPORT HANDLING EQUIPMENT Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential value. 2. Significant investment in specialized support equipment for a legacy aircraft program. 3. Focus on sustainment for the F-117 fleet, indicating continued operational reliance. 4. The contract's duration and value suggest a critical need for these components. 5. Lack of competition may limit opportunities for other qualified suppliers to enter the market. 6. Performance-based contract type (FIRM FIXED PRICE) aims to control costs, but initial price is unbenchmarked due to sole-source award.

Value Assessment

Rating: questionable

The contract value of $62.2 million for F-117 engine support, quick exchange kits, and handling equipment is substantial. However, without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar contracts. The sole-source nature of the award means the government did not explore potential cost savings that could arise from multiple bidders vying for the contract. This lack of comparison makes it challenging to definitively assess the value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of the Air Force did not conduct a competitive solicitation. The specific justification for this approach is not detailed in the provided data. A sole-source award typically occurs when only one responsible source is available or when urgency or other factors preclude full and open competition. The absence of multiple bidders means the government did not benefit from price competition, which could lead to higher costs compared to a competed contract.

Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competition. Without competing offers, there is less assurance that the price reflects the lowest possible cost for the required goods and services.

Public Impact

The primary beneficiaries are the Department of the Air Force and its operational units relying on the F-117 aircraft. The contract delivers essential components and support equipment for maintaining the F-117 engine fleet. Services are likely delivered to Air Force installations where F-117 aircraft are based or maintained. The contract supports specialized jobs within The Boeing Company related to aircraft manufacturing and sustainment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential cost savings for taxpayers.
Contract is for a legacy aircraft (F-117), raising questions about long-term strategic investment.
Lack of detailed justification for sole-source award hinders transparency.
No small business subcontracting goals are indicated, potentially limiting opportunities for smaller firms.

Positive Signals

Contract awarded to a major aerospace manufacturer (Boeing) with a proven track record.
FIRM FIXED PRICE contract type provides cost certainty for the government.
Contract addresses critical sustainment needs for operational aircraft.
Delivery order structure allows for phased procurement and management of resources.

Sector Analysis

The aerospace and defense sector is characterized by high R&D costs, complex supply chains, and significant government procurement. Contracts for aircraft manufacturing and sustainment, like this one for F-117 engine support, represent a substantial portion of defense spending. The market is often dominated by a few large prime contractors, such as Boeing, who possess the specialized capabilities and security clearances required. Benchmarking spending in this area is challenging due to the unique nature of military platforms and the classified aspects often associated with them.

Small Business Impact

This contract was not set aside for small businesses, and the data indicates no small business participation (sb: false). The prime contractor, The Boeing Company, is a large aerospace firm. Without specific subcontracting plans or goals detailed in the award, it is unclear what opportunities, if any, will be extended to small businesses for the provision of parts, services, or support related to this contract. This could represent a missed opportunity to leverage the small business industrial base.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. As a sole-source award, the justification and negotiation process would be subject to internal review and potentially oversight by the Government Accountability Office (GAO) if protested. Transparency is limited due to the non-competitive nature; however, the contract's performance and financial aspects would be monitored by the Air Force to ensure compliance with the firm fixed price terms and delivery schedules.

Related Government Programs

Aircraft Engine Manufacturing
Aircraft Parts and Auxiliary Equipment Manufacturing
Defense Logistics Support
Aerospace Sustainment Services
F-117 Nighthawk Program

Risk Flags

Sole-source award without clear justification.
Potential for inflated pricing due to lack of competition.
Contract for a legacy aircraft system.
No indication of small business subcontracting.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $62.2 million to THE BOEING COMPANY. FMS REQUIREMENT FOR F-117 ENGINES, QUICK EXCHANGE KITS, AND ENGINE SUPPORT HANDLING EQUIPMENT

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 $62.2 million.

What is the period of performance?

Start: 2018-06-27. End: 2020-09-30.

What is the specific justification for awarding this contract on a sole-source basis to The Boeing Company?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are awarded when only one responsible source is capable of providing the required supplies or services, or when there is a compelling urgency that precludes competition. For legacy aircraft like the F-117, it's possible that Boeing is the only entity with the proprietary knowledge, tooling, or necessary certifications to produce or support these specific engine components and handling equipment. A detailed justification would normally be documented by the contracting agency (Department of the Air Force) and may be subject to review by oversight bodies if challenged.

How does the $62.2 million contract value compare to historical spending on F-117 engine support?

Historical spending data specifically for F-117 engine support, quick exchange kits, and handling equipment is not provided. However, the F-117 is a legacy aircraft, and its operational fleet size has been significantly reduced over the years. Contracts for such specialized components for a diminishing fleet can be costly due to low production volumes and the need for specialized expertise. Without comparative historical data, it's difficult to assess if this $62.2 million award represents an increase, decrease, or stable level of investment compared to previous periods. The sole-source nature also complicates direct comparison to potentially competed contracts in the past.

What are the primary risks associated with a sole-source contract of this magnitude?

The primary risks associated with a sole-source contract of this magnitude include potential overpayment due to the lack of price competition, reduced incentive for the contractor to innovate or offer cost efficiencies, and a lack of market transparency. Taxpayers may not be receiving the best possible value for their money. Additionally, there's a risk of vendor lock-in, where the government becomes overly reliant on a single supplier, potentially limiting future flexibility. Oversight becomes even more critical to ensure the price is fair and reasonable, and that the contractor meets all performance requirements.

What is the expected performance period and delivery timeline for these F-117 engine components?

The contract was awarded on June 27, 2018, with an estimated completion date of September 30, 2020. This indicates a performance period of approximately 2 years and 3 months. The contract value is $62,179,129. The data specifies this as a 'Delivery Order' (aw: DELIVERY ORDER), suggesting that the total value may cover multiple deliveries or tasks within this timeframe. The duration suggests a focused effort to procure and deliver these critical engine support items within a defined period.

What is the role of The Boeing Company in supporting the F-117 program, and does this contract align with their broader portfolio?

The Boeing Company is a major aerospace manufacturer with extensive experience in aircraft production, sustainment, and support services. While the F-117 was originally developed by Lockheed, Boeing has a significant presence in military aircraft sustainment and modernization programs. This contract for F-117 engine support, quick exchange kits, and handling equipment aligns with Boeing's capabilities in providing specialized components and logistical support for complex aerospace systems. Their role likely involves manufacturing specific parts, providing technical expertise, and ensuring the timely delivery of these critical items to maintain the operational readiness of the F-117 fleet.

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: FA852618R0007

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: $62,179,129

Exercised Options: $62,179,129

Current Obligation: $62,179,129

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA852612D0001

IDV Type: IDC

Timeline