Air Force awards Boeing $108.6M for C-17 Globemaster III depot maintenance, a sole-source contract
Contract Overview
Contract Amount: $108,653,703 ($108.7M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2025-11-01
End Date: 2026-10-31
Contract Duration: 364 days
Daily Burn Rate: $298.5K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: FY26 C-17 GLOBEMASTER III DEPOT MAINTENANCE
Place of Performance
Location: SAN ANTONIO, BEXAR County, TEXAS, 78226
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $108.7 million to THE BOEING COMPANY for work described as: FY26 C-17 GLOBEMASTER III DEPOT MAINTENANCE Key points: 1. This contract represents a significant investment in maintaining critical airlift capabilities. 2. The sole-source nature of this award warrants scrutiny regarding potential cost efficiencies. 3. Performance will be assessed over a 364-day period, indicating a focused maintenance cycle. 4. The contract is for depot-level maintenance, suggesting complex and specialized repair work. 5. Geographic focus on Texas (TX) highlights a concentration of maintenance operations. 6. The cost-plus-fixed-fee structure requires careful monitoring to control overall expenditures.
Value Assessment
Rating: fair
Benchmarking the value of this sole-source contract is challenging without competitive data. The cost-plus-fixed-fee (CPFF) pricing structure means that actual costs will be reimbursed plus a fixed fee, which can lead to cost overruns if not managed tightly. While the total award amount is substantial, it reflects the complexity of depot maintenance for a large military aircraft like the C-17. Without comparable contract data or a competitive bidding process, it's difficult to definitively assess if this represents excellent value for money.
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, technology, or is the original equipment manufacturer. While this ensures specialized expertise, it limits the potential for price competition and may result in higher costs compared to a fully competed contract. The lack of competition means the government cannot leverage market forces to drive down prices.
Taxpayer Impact: The absence of competition means taxpayers may not benefit from the most cost-effective pricing. The government relies on negotiation and oversight to ensure a fair price, which is less effective than market-driven price discovery.
Public Impact
The U.S. Air Force benefits from the continued operational readiness of its C-17 Globemaster III fleet. This contract ensures the availability of critical strategic airlift capabilities for global deployment. The maintenance services will be performed in Texas, supporting the regional aerospace industry and workforce. The contract supports specialized technical jobs in aircraft maintenance and repair.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition, potentially increasing costs for taxpayers.
- Cost-plus-fixed-fee structure requires robust oversight to prevent cost escalation.
- Lack of transparency in pricing due to non-competitive nature.
- Dependence on a single contractor for critical maintenance could pose supply chain risks.
- Potential for scope creep in CPFF contracts if not managed diligently.
Positive Signals
- Ensures specialized expertise for complex C-17 maintenance, critical for mission readiness.
- Boeing's established track record with the C-17 program suggests familiarity and efficiency.
- Fixed fee component provides some cost predictability compared to pure cost-reimbursement.
- Contract duration allows for planned maintenance scheduling and resource allocation.
- Focus on depot maintenance ensures thorough and comprehensive upkeep of aircraft systems.
Sector Analysis
The aerospace and defense sector is characterized by high barriers to entry, complex supply chains, and significant government investment. Depot maintenance for large military aircraft like the C-17 is a specialized niche within this sector, often dominated by original equipment manufacturers or highly specialized MRO (Maintenance, Repair, and Overhaul) providers. The total addressable market for such services is substantial, driven by the need to maintain aging fleets and ensure operational readiness. This contract fits within the broader category of aerospace manufacturing and maintenance services, where government contracts form a significant portion of revenue for key players.
Small Business Impact
This contract was not set aside for small businesses and was awarded to a large prime contractor, The Boeing Company. There is no indication of specific subcontracting plans for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem is likely minimal, although Boeing may engage small businesses as subcontractors for specific components or services. The absence of a small business set-aside means opportunities for smaller, specialized firms to compete directly for this work are limited.
Oversight & Accountability
Oversight for this contract will primarily fall under the Department of the Air Force contracting and program management offices. Given the cost-plus-fixed-fee structure, rigorous financial oversight and auditing will be crucial to monitor expenditures and ensure the fixed fee remains appropriate. The contract's performance period and delivery order nature suggest ongoing monitoring of milestones and deliverables. While specific Inspector General (IG) involvement isn't detailed, the Department of Defense's IG office generally has jurisdiction over major defense contracts for potential fraud, waste, and abuse.
Related Government Programs
- C-17 Globemaster III Sustainment Contracts
- Air Mobility Command Aircraft Maintenance
- Department of Defense Depot Maintenance Programs
- Aerospace Manufacturing and Repair Services
Risk Flags
- Sole-source award
- Cost-plus-fixed-fee pricing
- Potential for cost overruns
- Limited price competition
Tags
defense, department-of-defense, department-of-the-air-force, aircraft-manufacturing, depot-maintenance, sole-source, cost-plus-fixed-fee, large-contract, texas, c-17-globemaster-iii, boeing
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $108.7 million to THE BOEING COMPANY. FY26 C-17 GLOBEMASTER III DEPOT MAINTENANCE
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 $108.7 million.
What is the period of performance?
Start: 2025-11-01. End: 2026-10-31.
What is The Boeing Company's track record with C-17 Globemaster III maintenance and sustainment?
The Boeing Company is the original manufacturer of the C-17 Globemaster III and has a long-standing track record of providing sustainment, maintenance, and upgrade services for the aircraft. They have been instrumental in ensuring the operational readiness of the C-17 fleet for the U.S. Air Force and international partners. Their experience encompasses depot-level maintenance, component repair, logistics support, and engineering services. This deep familiarity with the aircraft's systems and potential issues positions them as a key provider for complex maintenance tasks. Past performance on similar contracts would typically be reviewed during a competitive procurement, but in a sole-source scenario, the government relies on existing knowledge and potentially specific performance metrics from previous engagements.
How does the cost-plus-fixed-fee (CPFF) pricing structure compare to other contract types for depot maintenance?
The Cost-Plus-Fixed-Fee (CPFF) structure reimburses the contractor for allowable costs incurred, plus a predetermined fixed fee representing profit. This differs from fixed-price contracts, where the contractor agrees to a set price regardless of actual costs, and cost-reimbursement contracts (without a fixed fee), where profit is also subject to negotiation or ceilings. For complex, uncertain work like depot maintenance, CPFF can be advantageous as it allows for flexibility if unforeseen issues arise, and the fixed fee provides some cost predictability for the government compared to pure cost-plus contracts. However, it places a greater burden on the government to meticulously track and audit costs to prevent overruns and ensure the fee remains fair. It generally offers less incentive for the contractor to control costs compared to fixed-price arrangements.
What are the primary risks associated with a sole-source award for critical aircraft maintenance?
The primary risks associated with a sole-source award for critical aircraft maintenance include a lack of price competition, which can lead to higher costs for the government and taxpayers. There's also a reduced incentive for the contractor to innovate or improve efficiency, as they face no direct competitive pressure. Dependence on a single supplier can create vulnerabilities in the supply chain and increase risks if the contractor experiences financial difficulties, labor disputes, or operational disruptions. Furthermore, without competitive proposals, it can be more challenging for the government to benchmark pricing and ensure it is receiving fair market value. Robust contract management, negotiation, and oversight are essential to mitigate these risks.
What is the historical spending pattern for C-17 Globemaster III depot maintenance?
Historical spending on C-17 Globemaster III depot maintenance has been substantial, reflecting the operational demands and lifespan of the aircraft fleet. The U.S. Air Force relies on these aircraft for strategic airlift, necessitating regular and comprehensive maintenance. Annual spending can fluctuate based on the specific maintenance cycles required for individual aircraft, fleet-wide upgrades, and the availability of depot facilities and personnel. Contracts for C-17 sustainment, including depot maintenance, are often multi-year and can run into hundreds of millions or even billions of dollars over the life of the program. This specific $108.6 million award for FY26 is part of this ongoing, significant investment in maintaining the C-17 fleet's readiness.
How does the geographic location in Texas impact the contract's execution and oversight?
The contract's execution and oversight are influenced by its Texas location primarily through the proximity of maintenance facilities and potentially the availability of a skilled aerospace workforce in the region. Texas has a significant presence in the aerospace and defense industry, which can facilitate access to specialized labor, parts, and support services. For oversight, having the work performed in a specific geographic area allows for more focused on-site inspections, quality assurance checks, and progress monitoring by government representatives stationed nearby or through regional contracting offices. However, it also concentrates the risk associated with any local disruptions, such as natural disasters or labor issues, that could impact the contractor's ability to perform.
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: 4060 N LAKEWOOD BLVD, LONG BEACH, CA, 90808
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: $201,647,374
Exercised Options: $201,647,374
Current Obligation: $108,653,703
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA852621D0001
IDV Type: IDC
Timeline
Start Date: 2025-11-01
Current End Date: 2026-10-31
Potential End Date: 2026-10-31 00:00:00
Last Modified: 2026-03-26
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