DoD Awards Boeing $396M for C-17 Sustainment Labor, Sole-Sourced Contract
Contract Overview
Contract Amount: $396,445,772 ($396.4M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2018-10-01
End Date: 2022-09-26
Contract Duration: 1,456 days
Daily Burn Rate: $272.3K/day
Competition Type: NOT COMPETED
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: C-17 SUSTAINMENT LABOR
Place of Performance
Location: HUNTINGTON BEACH, ORANGE County, CALIFORNIA, 92647
Plain-Language Summary
Department of Defense obligated $396.4 million to THE BOEING COMPANY for work described as: C-17 SUSTAINMENT LABOR Key points: 1. Significant contract value of $396.4M for C-17 sustainment. 2. Sole-sourced award to The Boeing Company raises competition concerns. 3. Fixed Price Incentive contract type may incentivize cost overruns. 4. Contract duration of 1456 days spans over 4 years. 5. No small business participation noted in this award.
Value Assessment
Rating: questionable
The contract's fixed-price incentive structure, coupled with a sole-source award, makes a direct pricing assessment difficult without competitive benchmarks. The total award value of $396.4M for sustainment labor over four years requires careful scrutiny against industry standards for similar aircraft maintenance contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to The Boeing Company. This lack of competition limits price discovery and potentially leads to higher costs for the government compared to a competitively bid contract.
Taxpayer Impact: The absence of competition in this sole-source award may result in taxpayers paying a premium for C-17 sustainment labor.
Public Impact
Ensures continued operational readiness of the C-17 Globemaster III fleet. Supports critical logistics and airlift capabilities for the Department of Defense. Potential for increased costs due to sole-source nature of the award. Impacts the defense industrial base, specifically aircraft manufacturing and sustainment.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price discovery.
- Fixed-price incentive contract type can lead to cost overruns.
- Lack of small business participation.
Positive Signals
- Ensures critical sustainment for C-17 aircraft.
- Long-term contract provides stability for sustainment operations.
Sector Analysis
This contract falls within the Defense sector, specifically supporting aircraft manufacturing and sustainment. Spending benchmarks for C-17 sustainment are highly dependent on fleet size, age, and operational tempo, but a $396M award over four years suggests significant ongoing support requirements.
Small Business Impact
This specific award does not indicate any participation from small businesses. The prime contractor, The Boeing Company, is a large aerospace corporation. Further analysis would be needed to determine if subcontracting opportunities were offered to small businesses.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and efficient use of taxpayer funds. The Defense Contract Management Agency (DCMA) is responsible for overseeing contract performance and compliance.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition
- Potential for cost overruns (FPI)
- No small business participation
- High contract value
- Long contract duration
Tags
aircraft-manufacturing, department-of-defense, ca, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $396.4 million to THE BOEING COMPANY. C-17 SUSTAINMENT LABOR
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 $396.4 million.
What is the period of performance?
Start: 2018-10-01. End: 2022-09-26.
What is the basis for the sole-source justification for this C-17 sustainment labor contract?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the need for compatibility with existing systems that only one contractor can provide. For C-17 sustainment, Boeing, as the original manufacturer, likely possesses unique technical data, specialized tooling, and institutional knowledge essential for maintaining the aircraft's airworthiness and operational readiness, making competition impractical or cost-prohibitive.
How does the Fixed Price Incentive (FPI) contract type potentially impact cost control for this sustainment effort?
An FPI contract establishes a target cost, target profit, and a price ceiling. The government and contractor share in any cost savings or overruns between the target cost and the ceiling. While it incentivizes the contractor to control costs, the shared risk can also lead to higher initial estimates and potential for cost overruns if not managed diligently. The government's share in overruns means taxpayers could bear a portion of increased expenses.
What is the long-term strategic value of this sole-source sustainment contract for the C-17 fleet?
The long-term strategic value lies in maintaining the operational readiness and lifespan of the C-17 Globemaster III, a critical asset for global mobility and power projection. Ensuring continuous sustainment prevents degradation of the fleet, supports ongoing military operations, and preserves a vital national capability. However, the sole-source nature raises questions about long-term cost-effectiveness and potential reliance on a single provider.
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: FA852615R9242
Pricing Type: FIXED PRICE INCENTIVE (L)
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: $398,034,289
Exercised Options: $398,034,289
Current Obligation: $396,445,772
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: 2018-10-01
Current End Date: 2022-09-26
Potential End Date: 2022-09-26 00:00:00
Last Modified: 2025-11-04
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