Boeing awarded $144M for B-52 Radar Modernization, facing no competition

Contract Overview

Contract Amount: $144,115,116 ($144.1M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2018-11-28

End Date: 2021-06-30

Contract Duration: 945 days

Daily Burn Rate: $152.5K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: B-52 RADAR MODERNIZATION PROGRAM (RMP); DO GREEN

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $144.1 million to THE BOEING COMPANY for work described as: B-52 RADAR MODERNIZATION PROGRAM (RMP); DO GREEN Key points: 1. The contract's sole-source nature raises concerns about potential overpricing and lack of innovation. 2. Performance has been rated 'OK', suggesting no immediate issues but not exceptional value. 3. The fixed-fee structure on a cost-plus basis can incentivize cost overruns. 4. This program is critical for maintaining the B-52 bomber fleet's operational readiness. 5. The duration of 945 days indicates a significant, multi-year effort. 6. The contract is part of broader sustainment and modernization efforts for aging Air Force assets.

Value Assessment

Rating: questionable

Benchmarking value for this sole-source contract is challenging due to the absence of competitive bids. The 'OK' performance rating suggests the contractor is meeting basic requirements, but without comparison points, it's difficult to ascertain if the $144 million represents a fair price for the services rendered. The cost-plus fixed-fee structure, while common for complex R&D, carries inherent risks of cost escalation if not tightly managed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to The Boeing Company. The absence of competition means there was no opportunity for other qualified vendors to bid, potentially limiting price discovery and innovation. This approach is typically justified when a single source possesses unique capabilities or when urgency precludes a full competition.

Taxpayer Impact: Taxpayers may be paying a premium due to the lack of competitive pressure to drive down costs. Without competing bids, there is less assurance that the government is receiving the best possible value for its investment.

Public Impact

The primary beneficiaries are the U.S. Air Force and its B-52 bomber fleet, ensuring continued operational capability. Services delivered include the modernization of radar systems, crucial for navigation, targeting, and electronic warfare. The geographic impact is primarily within the United States, focusing on defense manufacturing and Air Force bases. Workforce implications include skilled labor in aerospace engineering, manufacturing, and program management at Boeing facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential for cost savings.
Cost-plus fixed-fee contract type can lead to cost overruns if not meticulously managed.
Lack of competition may stifle innovation in radar technology development.
Performance rated 'OK' indicates meeting minimum standards but not exceeding expectations.

Positive Signals

Boeing is a long-standing, experienced contractor with a deep understanding of the B-52 platform.
The contract addresses a critical need for modernizing aging military hardware.
Fixed fee component provides some cost certainty compared to pure cost-plus contracts.

Sector Analysis

The aerospace and defense sector is characterized by high R&D costs, long product lifecycles, and significant government procurement. This contract for radar modernization fits within the broader category of aircraft manufacturing and sustainment, a substantial segment of the defense industrial base. Comparable spending benchmarks are difficult to establish precisely due to the specialized nature of military avionics, but modernization programs for major weapon systems often run into hundreds of millions or billions of dollars.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there explicit information regarding subcontracting plans for small businesses. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless Boeing actively engages small businesses for specific components or services.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices, with potential involvement from the Air Force Audit Agency and the Government Accountability Office (GAO). The 'OK' performance rating suggests that day-to-day oversight is functioning, but the lack of competition limits the ability to assess value for money through market mechanisms. Transparency is moderate, as contract awards are public, but detailed cost breakdowns and performance metrics may be less accessible.

Related Government Programs

B-52 Bomber Sustainment
Air Force Avionics Modernization Programs
Defense Radar Technology Development
Aircraft Component Manufacturing

Risk Flags

Sole-source award
Cost-plus contract type
Potential for cost overruns
Lack of competitive benchmarking

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $144.1 million to THE BOEING COMPANY. B-52 RADAR MODERNIZATION PROGRAM (RMP); DO GREEN

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 $144.1 million.

What is the period of performance?

Start: 2018-11-28. End: 2021-06-30.

What is The Boeing Company's track record with similar radar modernization contracts?

The Boeing Company has a long and extensive history of working on complex defense systems, including radar and avionics modernization for various aircraft platforms. They have been the prime contractor for the B-52 program for decades, giving them intimate knowledge of the aircraft's systems. While specific details on past radar modernization contracts are often proprietary or embedded within larger program data, Boeing's general track record involves delivering sophisticated technological solutions for military applications. However, the success of such programs can vary, and performance ratings like the 'OK' on this contract suggest a need for continued monitoring to ensure optimal outcomes and value delivery over the contract's lifecycle.

How does the $144 million cost compare to other radar modernization efforts?

Directly comparing the $144 million cost of this B-52 radar modernization program to other radar modernization efforts is challenging due to the unique nature of each platform, the scope of modernization (e.g., component upgrades vs. full system replacement), and the varying levels of competition involved. Sole-source contracts, like this one, often lack the price transparency that competitive bidding provides, making external benchmarking difficult. However, major avionics and radar upgrades for large military aircraft can range from tens of millions to several billion dollars, depending on complexity and scale. Given the B-52's age and the critical role of its radar, $144 million for a significant modernization effort might be within a reasonable range, but the absence of competition prevents a definitive value assessment against market alternatives.

What are the primary risks associated with a sole-source, cost-plus fixed-fee contract for radar modernization?

The primary risks associated with a sole-source, cost-plus fixed-fee (CPFF) contract for radar modernization are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher prices than might be achieved in a competed environment. The government has less leverage to negotiate favorable terms. Secondly, the CPFF structure, while providing some cost ceiling via the fixed fee, can incentivize the contractor to incur higher costs, as their profit is based on a percentage of those costs. This can lead to cost overruns if not rigorously managed and overseen. For a complex, technology-intensive program like radar modernization, these risks are amplified, requiring robust government oversight to ensure cost control, adherence to scope, and timely delivery of a functional system.

How effective is the 'OK' performance rating in assessing program effectiveness?

An 'OK' performance rating is a standard indicator that the contractor is meeting the minimum contractual requirements and expectations. It suggests that the program is functioning as intended without significant deviations or failures. However, 'OK' is not synonymous with 'excellent' or 'highly effective.' It implies that while the contractor is fulfilling its obligations, there may not be exceptional performance, proactive problem-solving, or innovative contributions beyond the baseline requirements. For a critical modernization program, an 'OK' rating warrants continued monitoring to ensure that performance does not degrade and that the program remains on track to deliver the intended capabilities and value over its lifecycle. It provides a basic level of assurance but does not guarantee optimal program effectiveness or efficiency.

What are the historical spending patterns for B-52 modernization programs?

Historical spending on B-52 modernization programs reflects the long service life of the aircraft and the continuous need to update its systems to maintain relevance and capability. Over the decades, the B-52 has undergone numerous upgrades, including avionics, engines, and structural enhancements. Specific spending figures for individual modernization efforts can vary widely depending on the scope and technological advancements at the time. Programs like the proposed radar modernization are part of a larger, ongoing investment strategy to keep the B-52 fleet viable well into the future. Tracking precise historical spending requires aggregating data across multiple contracts and fiscal years, often involving significant sums allocated to sustainment, upgrades, and life-extension initiatives for this iconic bomber.

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 FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 6001 S AIR DEPOT BLVD, OKLAHOMA CITY, OK, 73135

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: $177,947,569

Exercised Options: $177,947,569

Current Obligation: $144,115,116

Actual Outlays: $12,670,515

Subaward Activity

Number of Subawards: 13

Total Subaward Amount: $2,890,284

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA862810D1000

IDV Type: IDC

Timeline