Boeing awarded $64.8M contract for C-32A/C-40B mission communication system upgrades by the Air Force

Contract Overview

Contract Amount: $64,778,516 ($64.8M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2010-02-12

End Date: 2013-12-31

Contract Duration: 1,418 days

Daily Burn Rate: $45.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: C-32A/C-40B MISSION COMMUNICATION SYSTEM UPGRADE

Place of Performance

Location: WICHITA, SEDGWICK County, KANSAS, 67210

State: Kansas Government Spending

Plain-Language Summary

Department of Defense obligated $64.8 million to THE BOEING COMPANY for work described as: C-32A/C-40B MISSION COMMUNICATION SYSTEM UPGRADE Key points: 1. Contract awarded to a single, large defense contractor, raising questions about potential cost efficiencies. 2. The firm-fixed-price contract type suggests a defined scope and price, but actual costs may vary. 3. Limited competition indicates a potential lack of market pressure to drive down prices. 4. The contract duration of over three years suggests a significant, long-term project. 5. The upgrade focuses on mission communication systems, critical for aircraft operational effectiveness. 6. The contract's value is substantial within the aircraft manufacturing sector for specialized upgrades.

Value Assessment

Rating: fair

The contract value of $64.8 million for communication system upgrades appears significant. Without specific benchmarks for similar communication system overhauls on these specific aircraft platforms, a direct value-for-money assessment is challenging. However, given the sole-source nature, it is difficult to ascertain if competitive pricing pressures were fully leveraged. The firm-fixed-price structure provides some cost certainty, but the overall value hinges on the necessity and scope of the upgrades.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, The Boeing Company, was considered. This approach is typically used when a specific capability or product is required, and only one source can provide it. The lack of competition means that taxpayers did not benefit from the potential price reductions and innovation that can arise from multiple bidders vying for the contract.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible price through competitive bidding, potentially leading to higher costs for taxpayers.

Public Impact

The primary beneficiaries are the Department of Defense and specifically the Air Force, which will receive upgraded communication systems for its C-32A and C-40B aircraft. The services delivered include the modification and upgrade of critical mission communication systems, enhancing operational capabilities. The geographic impact is primarily within the operational theaters where these aircraft are deployed. Workforce implications may include specialized technical roles within The Boeing Company for the execution of the upgrade.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential innovation.
Lack of transparency in the selection process due to no-bid nature.
Potential for cost overruns if not closely managed, despite fixed-price structure.

Positive Signals

Addresses critical mission communication system needs for key aircraft.
Firm-fixed-price contract provides a degree of cost predictability.
Award to a known, experienced manufacturer of these aircraft types.

Sector Analysis

The contract falls within the aerospace and defense sector, specifically focusing on aircraft modification and avionics upgrades. The market for such specialized communication systems is often dominated by a few key players due to the high technical barriers to entry and the proprietary nature of existing systems. The $64.8 million value is significant for a single upgrade project, reflecting the complexity and criticality of the systems involved. Comparable spending benchmarks would typically involve other major aircraft modification programs within the DoD.

Small Business Impact

This contract does not appear to involve a small business set-aside, as it was awarded to The Boeing Company, a large aerospace manufacturer. There is no explicit information provided regarding subcontracting plans for small businesses. The lack of a set-aside suggests that opportunities for small businesses may be limited to direct supply chain roles within Boeing's operations for this specific contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures would be tied to the performance metrics outlined in the firm-fixed-price contract. Transparency is limited due to the sole-source nature of the award, with less public visibility into the negotiation and justification process compared to a competed contract. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

C-32A Aircraft Program
C-40B Aircraft Program
DoD Aircraft Modernization Programs
Military Communication Systems Procurement

Risk Flags

Sole-source award
Lack of competition
Potential for cost inefficiencies

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $64.8 million to THE BOEING COMPANY. C-32A/C-40B MISSION COMMUNICATION SYSTEM UPGRADE

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 $64.8 million.

What is the period of performance?

Start: 2010-02-12. End: 2013-12-31.

What is the specific nature of the mission communication system upgrade being performed by Boeing?

The contract details specify an upgrade to the 'MISSION COMMUNICATION SYSTEM' for the C-32A and C-40B aircraft. While the exact technical specifications are not publicly detailed in the provided data, these upgrades typically involve enhancing data transmission capabilities, improving encryption, integrating new communication protocols, and potentially replacing aging hardware components. The goal is to ensure secure, reliable, and high-bandwidth communication essential for command and control, intelligence gathering, and operational coordination during missions. The C-32A is a VIP transport aircraft (often used by the Vice President and senior government officials), and the C-40B is a military transport variant, both requiring robust and secure communication suites.

How does the $64.8 million contract value compare to historical spending on similar communication system upgrades for these aircraft?

Without access to historical spending data specifically for C-32A and C-40B communication system upgrades, a direct comparison is difficult. However, $64.8 million represents a substantial investment for a single upgrade contract. Major avionics and communication system overhauls on large military aircraft can range from tens to hundreds of millions of dollars, depending on the scope, complexity, and number of aircraft involved. Given that this is a sole-source award to Boeing, it suggests a unique or highly specialized upgrade requirement that may not have readily available competitive alternatives, potentially influencing the price point.

What are the primary risks associated with a sole-source contract for critical aircraft systems?

The primary risks associated with a sole-source contract for critical aircraft systems like communication upgrades include: 1. **Higher Costs:** Lack of competition can lead to prices that are not optimized, as the contractor faces less pressure to be cost-efficient. 2. **Limited Innovation:** Without competitive pressure, the contractor may have less incentive to explore novel or more cost-effective solutions. 3. **Vendor Lock-in:** The government may become dependent on a single vendor for future upgrades, maintenance, and support, potentially at premium prices. 4. **Reduced Transparency:** The justification for a sole-source award and the negotiation process are often less transparent than for competed contracts, making it harder to verify fair pricing.

What is The Boeing Company's track record with the C-32A and C-40B aircraft platforms?

The Boeing Company has a strong track record with both the C-32A and C-40B aircraft platforms, as they are derivatives of Boeing's successful 757 (C-32A) and 737 (C-40B) commercial airliners. Boeing is the original manufacturer and integrator of these aircraft for military and government use. Their extensive experience includes initial production, delivery, and likely ongoing sustainment, modification, and upgrade programs for these specific airframes. This deep familiarity with the platforms' design, systems, and operational requirements is often a key factor in sole-source justifications for complex modifications.

How might this contract impact the operational readiness and capabilities of the C-32A and C-40B fleets?

This contract is expected to significantly enhance the operational readiness and capabilities of the C-32A and C-40B fleets by upgrading their mission communication systems. Modernized communication systems are crucial for maintaining secure command and control, enabling real-time data sharing, and ensuring interoperability with other assets. For the C-32A, used for transporting high-value personnel, enhanced secure communication is paramount for mission continuity and security. For the C-40B, used for logistics and personnel transport, improved communication can enhance operational efficiency and situational awareness. Ultimately, these upgrades aim to ensure these aircraft remain effective and secure assets for 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

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4615 SOUTH OLIVER, WICHITA, KS, 04

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $64,778,516

Exercised Options: $64,778,516

Current Obligation: $64,778,516

Contract Characteristics

Cost or Pricing Data: NO

Timeline