Boeing Awarded $98M for Pegasus Advanced Communications Suite, Facing Limited Competition
Contract Overview
Contract Amount: $98,114,834 ($98.1M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2023-03-30
End Date: 2027-03-30
Contract Duration: 1,461 days
Daily Burn Rate: $67.2K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: BLOCK 1 PEGASUS ADVANCED COMMUNICATIONS SUITE ENGINEERING AND MANUFACTURING DEVELOPMENT
Place of Performance
Location: TUKWILA, KING County, WASHINGTON, 98108
Plain-Language Summary
Department of Defense obligated $98.1 million to THE BOEING COMPANY for work described as: BLOCK 1 PEGASUS ADVANCED COMMUNICATIONS SUITE ENGINEERING AND MANUFACTURING DEVELOPMENT Key points: 1. Significant investment in advanced communications technology for the Air Force. 2. Sole-source award to Boeing raises questions about price discovery and competition. 3. Long-term contract duration (4 years) suggests a critical, ongoing need. 4. Potential for cost overruns given the Cost Plus Incentive Fee contract type.
Value Assessment
Rating: questionable
The contract's Cost Plus Incentive Fee structure, combined with a sole-source award, makes a direct pricing assessment difficult without further data on cost drivers and performance metrics. Benchmarking against similar advanced communications systems is challenging due to the specialized nature of the Pegasus suite.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was awarded on a sole-source basis to The Boeing Company. This limits competitive pressure, potentially leading to higher costs than if multiple vendors had competed. The lack of competition hinders robust price discovery.
Taxpayer Impact: Taxpayer funds are being used for this significant investment. Without competitive bidding, there's a risk of overpayment, impacting the overall value for taxpayer money.
Public Impact
Enhances critical communication capabilities for Air Force operations. Supports advanced aircraft manufacturing and technological development. Long-term commitment indicates strategic importance for national defense. Potential for follow-on contracts or upgrades based on this development.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- Cost Plus Incentive Fee contract type can lead to cost overruns.
- Long contract duration increases exposure to price fluctuations.
- Lack of transparency in price discovery.
Positive Signals
- Addresses critical need for advanced communications.
- Invests in high-tech aerospace manufacturing.
- Supports a key defense contractor.
- Potential for technological advancement.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on advanced communications systems for aircraft. Spending in this area is typically high due to the complexity and critical nature of military technology, with significant R&D investment.
Small Business Impact
The award was made to The Boeing Company, a large prime contractor. There is no indication of subcontracting opportunities for small businesses within the provided data, suggesting limited direct impact on the small business sector for this specific award.
Oversight & Accountability
The Department of the Air Force is the awarding agency. Oversight will be crucial to monitor costs, performance, and adherence to contract terms, especially given the sole-source nature and incentive fee structure to ensure accountability.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award.
- Cost Plus Incentive Fee contract.
- Long contract duration.
- Potential for scope creep.
- Lack of competitive benchmarking.
- Dependency on a single contractor.
Tags
aircraft-manufacturing, department-of-defense, wa, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $98.1 million to THE BOEING COMPANY. BLOCK 1 PEGASUS ADVANCED COMMUNICATIONS SUITE ENGINEERING AND MANUFACTURING DEVELOPMENT
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 $98.1 million.
What is the period of performance?
Start: 2023-03-30. End: 2027-03-30.
What specific technological advancements does the Pegasus suite offer, and how do these justify the sole-source award and associated cost?
The Pegasus Advanced Communications Suite likely incorporates cutting-edge technologies for secure, high-bandwidth, and resilient communication essential for modern air combat and intelligence, surveillance, and reconnaissance (ISR) missions. Justification for a sole-source award would typically hinge on unique, proprietary technology developed by Boeing, specialized integration requirements with existing Air Force platforms, or critical national security needs that preclude a lengthy competitive process. The associated cost is intended to cover extensive research, development, engineering, and manufacturing efforts for these advanced capabilities.
What are the potential risks associated with the Cost Plus Incentive Fee (CPIF) contract type for this advanced system, and how will they be mitigated?
The CPIF structure incentivizes both the contractor and the government to control costs, but it also carries risks. If targets are set too high or too low, it can lead to excessive profits for Boeing or insufficient motivation to reduce costs. Mitigation strategies include rigorous target cost setting, robust performance metrics, independent cost reviews, and clear incentive fee structures that align Boeing's profit with achieving cost savings and performance goals for the Pegasus suite.
How will the effectiveness of the Pegasus Advanced Communications Suite be measured, and what are the key performance indicators (KPIs) to ensure mission success?
Effectiveness will be measured through a combination of technical performance tests, operational assessments, and user feedback. Key Performance Indicators (KPIs) will likely include data throughput rates, signal reliability in contested environments, latency, security compliance, system integration success with existing platforms, and overall mission impact. Regular reviews and demonstrations will ensure the suite meets the demanding operational requirements of the Air Force.
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
Pricing Type: COST PLUS INCENTIVE FEE (V)
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: $184,173,743
Exercised Options: $184,173,743
Current Obligation: $98,114,834
Subaward Activity
Number of Subawards: 23
Total Subaward Amount: $21,274,021
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: 2023-03-30
Current End Date: 2027-03-30
Potential End Date: 2027-03-30 00:00:00
Last Modified: 2025-09-29
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