DoD Awards $262M Boeing Contract for KC-46 Software Sustainment, Raising Competition Concerns
Contract Overview
Contract Amount: $262,155,662 ($262.2M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2023-01-29
End Date: 2029-04-03
Contract Duration: 2,256 days
Daily Burn Rate: $116.2K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: KC-46 SOFTWARE SUSTAINMENT ORGANIC CAPABILITY STANDUP
Place of Performance
Location: TUKWILA, KING County, WASHINGTON, 98108
Plain-Language Summary
Department of Defense obligated $262.2 million to THE BOEING COMPANY for work described as: KC-46 SOFTWARE SUSTAINMENT ORGANIC CAPABILITY STANDUP Key points: 1. Significant contract value for sustainment of a key military aircraft. 2. Sole-source award to Boeing, the original manufacturer, limits competitive pricing. 3. Potential risk of higher costs due to lack of competition. 4. Spending falls within the Aircraft Manufacturing sector.
Value Assessment
Rating: questionable
The $262 million contract value for software sustainment is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential market rates for similar sustainment services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis to The Boeing Company, the original manufacturer. This approach bypasses competitive processes, potentially leading to less favorable pricing and reduced innovation.
Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for software sustainment services that could potentially be acquired at a lower cost through a competitive process.
Public Impact
Ensures continued operational readiness of the KC-46 tanker fleet. Potential for cost overruns impacts overall defense budget allocation. Reliance on a single vendor for critical software maintenance.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- High contract value
Positive Signals
- Ensures sustainment of critical aircraft
- Firm fixed price contract type
Sector Analysis
This contract falls under the Aircraft Manufacturing sector, specifically for sustainment of the KC-46 tanker. Spending benchmarks for similar sustainment contracts can vary widely based on system complexity and vendor.
Small Business Impact
The contract was awarded directly to The Boeing Company, and there is no indication of subcontracting opportunities for small businesses in the provided data. This limits potential benefits for the small business sector.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and performance. The Department of the Air Force should monitor expenditures and vendor performance diligently.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award limits competition.
- Potential for inflated costs due to lack of competitive pressure.
- High contract value increases financial risk.
- Dependency on a single vendor for critical software.
Tags
aircraft-manufacturing, department-of-defense, wa, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $262.2 million to THE BOEING COMPANY. KC-46 SOFTWARE SUSTAINMENT ORGANIC CAPABILITY STANDUP
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 $262.2 million.
What is the period of performance?
Start: 2023-01-29. End: 2029-04-03.
What is the justification for awarding this contract sole-source, and what steps are being taken to ensure fair pricing?
The justification for a sole-source award typically relates to unique capabilities or proprietary technology held by the original manufacturer. To ensure fair pricing, the agency should conduct thorough price analyses, potentially using historical data or independent cost estimates, and negotiate aggressively with the vendor. Regular performance reviews and audits are also crucial for accountability.
What are the long-term risks associated with relying solely on Boeing for KC-46 software sustainment?
The primary long-term risk is vendor lock-in, which can lead to escalating costs over time as competition is stifled. There's also a risk of reduced innovation if Boeing faces no pressure to develop more efficient or advanced sustainment solutions. Furthermore, dependence on a single entity can create vulnerabilities if that entity experiences financial difficulties or strategic shifts.
How does this contract contribute to the overall effectiveness and readiness of the KC-46 fleet?
This contract is critical for maintaining the operational effectiveness and readiness of the KC-46 tanker fleet by ensuring the software systems are up-to-date, secure, and functional. Reliable software sustainment is essential for the aircraft's mission capabilities, including aerial refueling and strategic airlift. Without this support, the fleet's operational availability and performance could be significantly compromised.
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: 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: $268,529,760
Exercised Options: $262,155,662
Current Obligation: $262,155,662
Subaward Activity
Number of Subawards: 40
Total Subaward Amount: $18,744,907
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA860919D0007
IDV Type: IDC
Timeline
Start Date: 2023-01-29
Current End Date: 2029-04-03
Potential End Date: 2029-04-03 00:00:00
Last Modified: 2024-12-20
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