DoD's KC-X Tanker Program: $31.96B Spent on Boeing Aircraft Manufacturing
Contract Overview
Contract Amount: $31,960,918,249 ($32.0B)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2011-02-24
End Date: 2027-07-31
Contract Duration: 6,001 days
Daily Burn Rate: $5.3M/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: KC-X MODERNIZATION PROGRAM
Place of Performance
Location: TUKWILA, KING County, WASHINGTON, 98108
Plain-Language Summary
Department of Defense obligated $31.96 billion to THE BOEING COMPANY for work described as: KC-X MODERNIZATION PROGRAM Key points: 1. Significant investment in aircraft manufacturing for a critical defense asset. 2. Boeing is the sole contractor, raising questions about competition. 3. Long duration and fixed-price incentive contract structure present potential risks. 4. The program falls within the large-scale Defense sector.
Value Assessment
Rating: questionable
The total obligated amount is substantial. Without comparable contracts or detailed cost breakdowns, assessing value for money is difficult. The fixed-price incentive structure aims to balance cost control with performance, but its effectiveness depends on robust oversight.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Although awarded under full and open competition, Boeing is the sole contractor. This suggests that while the initial award was competitive, ongoing execution may lack competitive pressure, potentially impacting price discovery and innovation.
Taxpayer Impact: The significant expenditure represents a major allocation of taxpayer funds towards a strategic defense capability. Ensuring cost-effectiveness and program success is paramount for maximizing taxpayer return.
Public Impact
Ensures the U.S. Air Force maintains vital aerial refueling capabilities. Supports a large number of jobs in aircraft manufacturing. The program's success is critical for global military operations and power projection.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole contractor reliance
- Long-term contract duration
- Fixed-price incentive risks
Positive Signals
- Critical national security asset
- Modernization of aging fleet
Sector Analysis
The KC-X program is a major defense procurement within the aircraft manufacturing sector. Spending benchmarks for similar large-scale defense platforms are typically in the billions, making this expenditure significant but not entirely out of line for a program of this scale and strategic importance.
Small Business Impact
The data does not indicate specific subcontracting opportunities for small businesses. Large prime contractors like Boeing often engage small businesses, but the extent of their involvement is not detailed here. Further analysis would be needed to assess SMB participation.
Oversight & Accountability
The program's long duration and complexity necessitate continuous oversight from the Department of Defense. Accountability mechanisms should focus on performance metrics, cost control, and adherence to contract terms to ensure taxpayer funds are used efficiently.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Potential for cost overruns due to fixed-price incentive structure.
- Lack of ongoing competition may reduce cost-saving incentives.
- Long contract duration increases exposure to market and technological changes.
- Dependence on a single contractor poses supply chain and performance risks.
Tags
aircraft-manufacturing, department-of-defense, wa, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $31.96 billion to THE BOEING COMPANY. KC-X MODERNIZATION PROGRAM
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 $31.96 billion.
What is the period of performance?
Start: 2011-02-24. End: 2027-07-31.
What is the projected cost per aircraft, and how does it compare to industry benchmarks for similar aircraft?
The provided data aggregates total spending and does not break down costs per aircraft. To assess value, a detailed cost analysis comparing the per-unit cost of the KC-X tanker to similar commercial or military aircraft, adjusted for unique specifications and capabilities, would be necessary. This comparison is crucial for determining if the government is receiving a fair price.
What are the specific performance metrics tied to the fixed-price incentive contract, and how are they monitored?
The fixed-price incentive contract structure implies that both the contractor and the government share in cost savings or overruns based on achieving target costs and performance levels. Specific metrics and monitoring protocols are essential for effective oversight. Without this detail, it's difficult to assess the risk of cost overruns or the incentive for optimal performance.
How has the full and open competition at award translated into ongoing cost efficiencies or innovation during contract execution?
While the initial award was under full and open competition, the fact that Boeing is the sole contractor raises questions about sustained competitive pressure. True effectiveness would be demonstrated by ongoing efforts to reduce costs, improve performance, or introduce innovations throughout the contract's life, driven by either inherent program management or residual competitive dynamics.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 2
Pricing Type: FIXED PRICE INCENTIVE (L)
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: $48,807,787,101
Exercised Options: $31,964,260,504
Current Obligation: $31,960,918,249
Actual Outlays: $271,607,247
Subaward Activity
Number of Subawards: 1128
Total Subaward Amount: $2,676,844,586
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2011-02-24
Current End Date: 2027-07-31
Potential End Date: 2027-07-31 00:00:00
Last Modified: 2025-12-10
More Contracts from THE Boeing Company
- International Space Station — $22.4B (National Aeronautics and Space Administration)
- 200112!000108!9700!ZD60 !ballistic Missile Defense ORG. !HQ000601C0001 !A!N!*!N! !20001222!20080930!848025649!848025649!009256819!n!the Boeing Company !3370 E Miraloma AVE !anaheim !ca!92806!37000!089!01!huntsville !madison !alabama !+000383571022!n!n!000000000000!ad93!rdte/Other Defense-Adv Tech DEV !S1 !services !1caa!ballistic Missile Defense SYS !541710!*!*!3! ! ! !*!*!*!B!*!*!A! !A !U!R!2!001!B! !Z!Y!Z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! — $18.8B (Department of Defense)
- USN P-8A FRP II Long Lead Material — $18.1B (Department of Defense)
- 200512!010860!2100!w56hzv!tacom - Warren !w56hzv05c0724 !A!N! !Y! ! !20050923!20141231!016544780!016544780!009256819!n!the Boeing Company !J S Mcdonnell Blvd !saint Louis !mo!63166!65000!510!29!st. Louis !ST. Louis (city) !missouri !+000219245691!n!n!000000000000!az15!rdte/Other Research&development-Eng/Manuf Devel !S1 !services !301 !FCS !541330!E! !1! ! ! ! ! !20200930!B! ! !A! !d!u!u!1!001!n!1a!z!y!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! ! TAS::21 2040::TAS — $12.7B (Department of Defense)
- 200411!000011!1700!AA4M0 !naval AIR Systems Command !N0001904C0014 !A!N! !N! ! !20031229!20110930!149879157!006265946!009256819!n!mcdonnell Douglas Corporation !J S Mcdonnell Blvd !saint Louis !mo!63166!65000!510!29!st. Louis !ST. Louis (city) !missouri !+000166491870!n!y!008662099934!1510!aircraft Fixed Wing !a1a!airframes and Spares !549 !F/A-18 E/F !336411!E! !3!C!S! ! ! !99990909!B! ! !A! !d!u!k!1!001!n!1a!a!w!f! ! !N!C!N! ! ! !z!z!a!a!000!a!b!n! ! ! !Y! ! !0001! ! — $11.4B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- THE Purpose of This Modification IS to Award F-35A Lrip 15 Usaf Aircraft* Long Lead Funding — $30.1B (Lockheed Martin Corporation)