DoD Awards $1.3B to Boeing for KC-46A Aircraft Manufacturing, Delivery Order Under Existing Contract
Contract Overview
Contract Amount: $1,305,571,332 ($1.3B)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2017-12-22
End Date: 2025-06-30
Contract Duration: 2,747 days
Daily Burn Rate: $475.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: JAPAN KC-46A
Place of Performance
Location: TUKWILA, KING County, WASHINGTON, 98108
Plain-Language Summary
Department of Defense obligated $1.31 billion to THE BOEING COMPANY for work described as: JAPAN KC-46A Key points: 1. Significant contract value of $1.3 billion for aircraft manufacturing. 2. Sole-source award to The Boeing Company, raising competition concerns. 3. Long contract duration (2017-2025) suggests ongoing program needs. 4. Firm Fixed Price contract type aims to control costs.
Value Assessment
Rating: fair
The $1.3 billion award is a substantial amount for aircraft manufacturing. Benchmarking against similar large-scale defense aircraft contracts is difficult without more specific details on the KC-46A variant and scope. The firm fixed price structure provides some cost certainty.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source or limited competition scenario. This approach may limit price discovery and potentially lead to higher costs compared to a fully competed contract. The award is a delivery order under an existing contract.
Taxpayer Impact: The lack of competition could result in taxpayers paying a premium for the KC-46A aircraft. However, the firm fixed price contract aims to mitigate cost overruns.
Public Impact
Impacts Air Force readiness and refueling capabilities. Supports a major defense contractor, The Boeing Company. Long-term program with implications for future defense spending. Potential for follow-on contracts and sustainment services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- High contract value
- Long contract duration
Positive Signals
- Firm Fixed Price contract type
- Delivery order under existing contract
Sector Analysis
This contract falls within the Defense sector, specifically Aircraft Manufacturing. Defense spending on major platforms like refueling tankers is a significant portion of the federal budget. Benchmarks for similar large aircraft programs are often in the billions.
Small Business Impact
The data indicates the award went to The Boeing Company, a large prime contractor. There is no explicit information on small business participation in this specific delivery order. Large defense contracts often involve complex subcontracting, but direct small business awards are not evident here.
Oversight & Accountability
The contract is a delivery order under an existing contract, suggesting some level of prior oversight. However, the sole-source nature warrants scrutiny to ensure fair pricing and value for taxpayer dollars. Further oversight would focus on performance and adherence to the fixed price.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competitive bidding
- Potential for inflated pricing due to sole-source nature
- Long contract duration may not reflect evolving needs
- Limited transparency on specific aircraft configuration and pricing breakdown
Tags
aircraft-manufacturing, department-of-defense, wa, delivery-order, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.31 billion to THE BOEING COMPANY. JAPAN KC-46A
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 $1.31 billion.
What is the period of performance?
Start: 2017-12-22. End: 2025-06-30.
What is the specific justification for the sole-source award of this significant delivery order for the KC-46A aircraft?
The justification for a sole-source award typically relates to unique capabilities, proprietary technology, or the need for compatibility with existing systems where only one source can meet the requirement. For the KC-46A, this could stem from its development as a derivative of a specific commercial aircraft or unique military modifications that only Boeing possesses.
How does the firm fixed price structure on this $1.3 billion delivery order ensure cost-effectiveness given the lack of competition?
While a firm fixed price (FFP) contract aims to shift cost risk to the contractor, its effectiveness in ensuring cost-effectiveness without competition is limited. The government relies on the contractor's proposed price, which may not be as competitive as in a solicited bid. Oversight is crucial to ensure the proposed costs are reasonable and reflect the FFP's intent.
What are the long-term implications of this substantial, non-competed award for the future development and acquisition of aerial refueling capabilities?
This non-competed award for a significant portion of the KC-46A program could set a precedent for future acquisitions, potentially reducing competitive opportunities for alternative refueling solutions or upgrades. It reinforces reliance on Boeing for this capability, which may impact long-term strategic sourcing and innovation within the Air Force's tanker fleet.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 7755 E MARGINAL WAY S, SEATTLE, WA, 98108
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: $1,480,283,837
Exercised Options: $1,305,571,332
Current Obligation: $1,305,571,332
Subaward Activity
Number of Subawards: 118
Total Subaward Amount: $42,789,032
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA860918G0002
IDV Type: BOA
Timeline
Start Date: 2017-12-22
Current End Date: 2025-06-30
Potential End Date: 2025-06-30 00:00:00
Last Modified: 2025-10-24
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