Boeing awarded $198.6M for B-52 Radar Modernization, a sole-source contract for initial design

Contract Overview

Contract Amount: $198,582,677 ($198.6M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2019-06-27

End Date: 2026-12-23

Contract Duration: 2,736 days

Daily Burn Rate: $72.6K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: B-52 RADAR MODERNIZATION PROGRAM SUPPLIER INITIAL DESIGN PHASE 2B

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $198.6 million to THE BOEING COMPANY for work described as: B-52 RADAR MODERNIZATION PROGRAM SUPPLIER INITIAL DESIGN PHASE 2B Key points: 1. Contract awarded to a single, established supplier, raising questions about price competition. 2. Significant investment in modernizing a legacy aircraft platform, indicating long-term defense strategy. 3. The contract's cost-plus-fixed-fee structure may incentivize cost overruns. 4. Performance is rated as 'OK', suggesting no major issues but room for improvement. 5. This contract falls within the aircraft manufacturing sector, a critical component of defense. 6. The duration of the contract extends over several years, implying a phased development approach.

Value Assessment

Rating: fair

The contract's value of $198.6 million for an initial design phase appears substantial. Without comparable sole-source contracts for similar radar modernization efforts, a precise value-for-money assessment is challenging. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex R&D, carries inherent risks of cost escalation. Benchmarking against industry standards for aircraft component design and development would be necessary for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This approach is often used when a specific contractor possesses unique capabilities or intellectual property essential for the project, or in cases of urgent need. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices through market forces. The justification for a sole-source award would typically involve demonstrating that only one responsible source can provide the required services.

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 beneficiary is the U.S. Air Force, which will receive modernized B-52 bombers. The contract delivers initial design services for a critical radar system upgrade. The geographic impact is centered around the contractor's facilities, likely in Oklahoma. This contract supports specialized engineering and technical jobs within the aerospace industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee structure may lead to higher than anticipated costs.
Sole-source award limits price negotiation and potential savings.
Long contract duration increases exposure to potential scope creep or changing requirements.
Reliance on a single supplier for critical technology development poses a risk if issues arise.
Performance rating of 'OK' suggests potential for further optimization and efficiency gains.

Positive Signals

Award to a well-established contractor (Boeing) with extensive experience in aerospace.
Focus on modernizing a strategic asset (B-52) enhances long-term defense capabilities.
Clear definition of initial design phase provides a focused objective.
Contract duration allows for thorough development and testing of complex systems.

Sector Analysis

The aerospace and defense sector is characterized by high R&D costs, long product development cycles, and significant government procurement. The B-52 radar modernization falls within the aircraft manufacturing sub-sector. This contract represents a strategic investment in maintaining the operational relevance of a key strategic bomber fleet. Comparable spending benchmarks would involve other major aircraft system upgrades, which often run into hundreds of millions or billions of dollars over their lifecycle.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false and 'sb': false. The prime contractor, Boeing, is a large aerospace company. While large prime contractors are often required to subcontract a portion of their work to small businesses, the specifics of such arrangements are not detailed in the provided data. The absence of a direct set-aside means that small businesses would likely participate as subcontractors rather than direct awardees.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force and the Department of Defense. The 'st': 'OK' and 'sn': 'OKLAHOMA' likely refer to performance and location status, suggesting a generally satisfactory performance level. Transparency is facilitated through contract databases like FPDS. Accountability measures would include milestone reviews, performance reporting, and potential audits by the Government Accountability Office (GAO) or the Department of Defense's Inspector General, especially given the CPFF structure.

Related Government Programs

B-52 Bomber Sustainment Programs
Airborne Radar Systems Development
Aerospace Manufacturing Contracts
Department of Defense Major Weapon System Modernization

Risk Flags

Sole-source award may result in higher costs.
Cost-plus-fixed-fee structure carries risk of cost overruns.
Long contract duration increases potential for scope creep.
Performance rated 'OK' indicates potential for improvement.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $198.6 million to THE BOEING COMPANY. B-52 RADAR MODERNIZATION PROGRAM SUPPLIER INITIAL DESIGN PHASE 2B

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 $198.6 million.

What is the period of performance?

Start: 2019-06-27. End: 2026-12-23.

What is the historical spending pattern for B-52 radar modernization efforts?

Historical spending on B-52 radar modernization is not explicitly detailed in the provided data. However, the B-52 platform has undergone numerous upgrades and sustainment efforts over its long service life. Previous radar system upgrades or related avionics modernizations would likely have involved significant investment, potentially in the tens to hundreds of millions of dollars, depending on the scope and technological advancements at the time. The current contract for the 'Supplier Initial Design Phase 2B' suggests a continuation or a new phase of modernization, building upon prior sustainment and upgrade activities. Comprehensive historical data would require analysis of past defense budgets and specific program awards related to the B-52's electronic warfare and radar systems over several decades.

How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for similar R&D projects?

The Cost-Plus-Fixed-Fee (CPFF) contract type is common for research and development (R&D) or complex projects where the scope is not fully defined at the outset. In a CPFF contract, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This contrasts with fixed-price contracts, where the price is set regardless of the final cost, offering greater cost certainty to the government but potentially higher risk for the contractor. Incentive fee contracts aim to motivate contractor performance by adjusting the fee based on achieving specific targets. For R&D, CPFF is often chosen to encourage innovation and exploration without the contractor bearing excessive financial risk, but it places the burden of cost control on the government's oversight.

What are the specific risks associated with a sole-source award for critical defense technology?

Sole-source awards for critical defense technology carry several significant risks. Primarily, the absence of competition can lead to inflated prices, as the government lacks the leverage of multiple bids to negotiate the best value. This can result in taxpayers paying more than necessary. Secondly, it can reduce the incentive for the sole-source contractor to innovate or improve efficiency, as there is no competitive pressure. Furthermore, it creates a dependency on a single supplier, which can be problematic if the contractor faces financial difficulties, production issues, or decides to exit the market. This dependency also limits the government's options for future upgrades or replacements, potentially locking it into a specific technology or vendor.

What is the expected impact of this radar modernization on the B-52's operational capabilities?

The modernization of the B-52's radar system is expected to significantly enhance its operational capabilities, particularly in contested environments. Modern radar technology offers improved target detection, tracking, and identification, especially against advanced threats. This includes better resolution, longer range, and the ability to operate effectively in challenging weather or electronic warfare conditions. Enhanced situational awareness for the aircrew is a key benefit, allowing for more informed decision-making. Furthermore, updated radar systems often integrate better with other modern avionics and weapon systems, improving the bomber's overall effectiveness and extending its service life well into the future, ensuring its relevance as a strategic asset.

What is the track record of The Boeing Company in delivering complex defense avionics systems?

The Boeing Company has a long and extensive track record of delivering complex defense avionics systems for a wide range of military platforms. As one of the world's largest aerospace and defense contractors, Boeing has been involved in the design, development, and integration of sophisticated electronic systems, including radar, electronic warfare suites, communication systems, and mission computers for fighter jets, bombers, transport aircraft, and rotorcraft. While specific program successes and challenges vary, Boeing's overall experience in this domain is substantial. Their involvement in programs like the F-15, F/A-18, and various bomber programs demonstrates their capability to handle large-scale, technologically advanced avionics projects, though like any major contractor, they have also faced program delays and cost challenges on certain complex endeavors.

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: $213,174,592

Exercised Options: $213,174,592

Current Obligation: $198,582,677

Actual Outlays: $14,215,197

Subaward Activity

Number of Subawards: 137

Total Subaward Amount: $142,587,752

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA862819D1000

IDV Type: IDC

Timeline