Air Force awards $325M Boeing contract for F-15SA modernization Block Cycle Upgrade 3
Contract Overview
Contract Amount: $32,494,773 ($32.5M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2021-03-31
End Date: 2023-04-30
Contract Duration: 760 days
Daily Burn Rate: $42.8K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: NON-ACAT, F15SA MODERNIZATION, BLOCK CYCLE UPGRADE 3 (BCU3)
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $32.5 million to THE BOEING COMPANY for work described as: NON-ACAT, F15SA MODERNIZATION, BLOCK CYCLE UPGRADE 3 (BCU3) Key points: 1. Significant investment in F-15SA modernization, focusing on Block Cycle Upgrade 3. 2. Sole-source award to The Boeing Company, raising questions about competition. 3. Contract type is Cost Plus Fixed Fee, which can lead to cost overruns. 4. Potential for taxpayer impact due to the large contract value and fee structure.
Value Assessment
Rating: questionable
The contract value of $325M for a modernization effort needs further scrutiny. Without competitive bidding, it's difficult to assess if this price is fair market value compared to similar aircraft upgrade contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis to The Boeing Company. This lack of competition limits price discovery and may result in a higher cost to the government than if multiple vendors had bid.
Taxpayer Impact: The sole-source nature of this award means taxpayers may not be receiving the best possible price for this critical aircraft modernization.
Public Impact
Modernization of F-15SA fleet ensures continued air superiority capabilities. Investment supports advanced avionics and systems for a key fighter jet. Potential impact on readiness and operational effectiveness of the Air Force. Long-term sustainment and upgrade costs for the F-15 fleet.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price negotiation.
- Cost Plus Fixed Fee contract type carries inherent cost overrun risk.
- Lack of transparency in pricing due to non-competitive award.
Positive Signals
- Essential modernization of critical Air Force assets.
- Supports advanced technological capabilities for the F-15SA.
- Contract awarded to a known and experienced defense contractor.
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, specifically for defense avionics and modernization. Spending benchmarks for similar sole-source modernization contracts are often high, but competitive bids typically yield better value.
Small Business Impact
The contract was awarded directly to The Boeing Company, a large prime contractor. There is no indication of subcontracting opportunities for small businesses within the provided data.
Oversight & Accountability
The Department of the Air Force is responsible for overseeing this contract. Given the sole-source nature and cost-plus fee structure, robust oversight is crucial to ensure cost control and effective execution.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Potential for cost overruns
- Lack of competitive benchmarking
- Limited transparency in pricing
Tags
aircraft-manufacturing, department-of-defense, mo, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $32.5 million to THE BOEING COMPANY. NON-ACAT, F15SA MODERNIZATION, BLOCK CYCLE UPGRADE 3 (BCU3)
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 $32.5 million.
What is the period of performance?
Start: 2021-03-31. End: 2023-04-30.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair pricing without competition?
The justification for a sole-source award typically involves unique capabilities or urgent needs. Without detailed documentation, it's difficult to assess the validity of the sole-source justification. Steps to ensure fair pricing might include historical cost analysis or independent government cost estimates, but these are less effective than competitive benchmarking.
What are the specific risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this modernization effort?
The CPFF structure incentivizes the contractor to incur costs, as their fee is a percentage of those costs. This can lead to cost overruns if not tightly managed. The government bears the risk of cost increases, while the contractor has less incentive to control expenses compared to fixed-price contracts.
How will the effectiveness of the Block Cycle Upgrade 3 be measured, and what are the key performance indicators for this modernization?
Effectiveness is typically measured against defined performance metrics and operational requirements. Key indicators could include improvements in system reliability, enhanced mission capabilities, reduced maintenance downtime, and successful integration of new technologies. Formal testing and operational assessments post-upgrade are crucial.
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: 6200 JAMES S MCDONNELL BLVD, SAINT LOUIS, MO, 63134
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: $32,494,773
Exercised Options: $32,494,773
Current Obligation: $32,494,773
Subaward Activity
Number of Subawards: 11
Total Subaward Amount: $17,583,784
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA863421D2703
IDV Type: IDC
Timeline
Start Date: 2021-03-31
Current End Date: 2023-04-30
Potential End Date: 2023-04-30 00:00:00
Last Modified: 2024-06-14
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