DoD Awards Boeing $3.9B for F-15EX Lot 5 Advanced Procurement, Facing Limited Competition
Contract Overview
Contract Amount: $3,932,715,048 ($3.9B)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2023-09-27
End Date: 2029-04-30
Contract Duration: 2,042 days
Daily Burn Rate: $1.9M/day
Competition Type: NOT COMPETED
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: F-15EX LOT 5 ADVANCED PROCUREMENT
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $3.93 billion to THE BOEING COMPANY for work described as: F-15EX LOT 5 ADVANCED PROCUREMENT Key points: 1. Significant investment in advanced aircraft manufacturing for national defense. 2. Sole reliance on Boeing for F-15EX production raises competition concerns. 3. Long-term contract duration (2029) requires ongoing oversight. 4. High value contract necessitates careful cost management and performance monitoring.
Value Assessment
Rating: fair
The contract value of $3.9B for advanced procurement is substantial. Benchmarking against similar advanced procurement contracts for major defense platforms is difficult without more granular data, but the scale suggests a significant investment. The fixed-price incentive structure aims to control costs while incentivizing performance.
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. This lack of competition limits price discovery and potentially increases costs for the government, as there is no market pressure to drive down prices. The Air Force likely justified this approach due to specialized capabilities or existing production lines.
Taxpayer Impact: The sole-source nature of this award means taxpayers may not benefit from competitive pricing, potentially leading to higher overall expenditure for the F-15EX program.
Public Impact
Modernization of the Air Force's fighter fleet with advanced F-15EX aircraft. Supports high-tech manufacturing jobs within the aerospace sector. Ensures continued strategic airpower capabilities for national security. Potential for cost overruns due to lack of competitive bidding.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price negotiation.
- Long contract duration increases exposure to market and technological changes.
- Fixed-price incentive contracts can still lead to cost overruns if not managed carefully.
Positive Signals
- Procurement of advanced, critical defense assets.
- Supports a key defense contractor and associated supply chain.
- Addresses a stated need for Air Force modernization.
Sector Analysis
This contract falls within the Defense sector, specifically Aircraft Manufacturing. Spending benchmarks for advanced procurement of major defense platforms are highly variable, but $3.9B represents a significant portion of annual defense procurement budgets, reflecting the complexity and cost of modern fighter jets.
Small Business Impact
The data indicates this contract was awarded directly to The Boeing Company and does not mention any subcontracting to small businesses. Further investigation would be needed to determine if small business participation is planned or required through subcontracting opportunities.
Oversight & Accountability
The Department of the Air Force is responsible for oversight of this contract. Given the sole-source nature and significant value, robust oversight mechanisms are crucial to ensure cost control, adherence to specifications, and timely delivery. Regular performance reviews and audits are essential.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award limits competitive pricing.
- Potential for cost growth under fixed-price incentive contract.
- Long-term contract duration (over 5 years) increases risk exposure.
- Dependence on a single supplier for critical defense asset.
Tags
aircraft-manufacturing, department-of-defense, mo, delivery-order, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $3.93 billion to THE BOEING COMPANY. F-15EX LOT 5 ADVANCED PROCUREMENT
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 $3.93 billion.
What is the period of performance?
Start: 2023-09-27. End: 2029-04-30.
What specific advanced capabilities does this F-15EX Lot 5 procurement enable, and how do they justify the sole-source award?
The F-15EX is designed with advanced avionics, weapons capacity, and longer range compared to previous models. Advanced procurement for Lot 5 likely focuses on integrating next-generation sensors, electronic warfare systems, or specific munitions. The sole-source award is typically justified by the unique production capabilities and established infrastructure Boeing possesses for the F-15 platform, minimizing risks associated with technology transfer and production ramp-up for a new supplier.
What are the primary risks associated with the fixed-price incentive (FPI) contract type for this advanced procurement, and how are they mitigated?
The primary risk with FPI contracts is that while they incentivize cost control, the government may still end up paying more than initially anticipated if the contractor incurs higher costs than projected, up to a ceiling. Mitigation strategies include rigorous target cost setting, clear performance metrics, effective negotiation of the sharing formula, and close government monitoring of contractor costs and progress throughout the contract lifecycle to ensure alignment with objectives.
How does the $3.9B investment in F-15EX Lot 5 align with the Air Force's broader strategic goals and fleet modernization plans?
This investment directly supports the Air Force's goal of modernizing its tactical fighter fleet, providing a platform capable of carrying advanced weapons and operating in contested environments. The F-15EX is intended to complement the F-22 and F-35, offering a different set of capabilities, particularly in terms of payload and range. This procurement ensures the Air Force maintains a robust air combat capability while other modernization efforts, like the Next Generation Air Dominance (NGAD) program, mature.
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: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Address: 6200 JS 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: $3,933,723,413
Exercised Options: $3,933,723,413
Current Obligation: $3,932,715,048
Subaward Activity
Number of Subawards: 1583
Total Subaward Amount: $1,263,073,835
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA863420D2704
IDV Type: IDC
Timeline
Start Date: 2023-09-27
Current End Date: 2029-04-30
Potential End Date: 2029-04-30 00:00:00
Last Modified: 2025-12-17
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