DoD's $66.5M R&D contract with Boeing for advanced aircraft development shows significant investment in innovation

Contract Overview

Contract Amount: $66,549,455 ($66.5M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2006-07-27

End Date: 2010-10-31

Contract Duration: 1,557 days

Daily Burn Rate: $42.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Place of Performance

Location: SAINT LOUIS, ST. LOUIS County, MISSOURI, 63134, UNITED STATES OF AMERICA

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $66.5 million to THE BOEING COMPANY for work described as: Key points: 1. Contract awarded for advanced aircraft research and development, indicating a focus on future military capabilities. 2. Sole-source award suggests limited market alternatives or unique contractor qualifications. 3. Long duration of the contract (over 4 years) implies complex, multi-phase research objectives. 4. Cost-plus-fixed-fee structure incentivizes contractor efficiency while managing cost uncertainty. 5. High dollar value signifies a substantial commitment to technological advancement in aerospace. 6. Awarded by the Department of the Air Force, aligning with strategic airpower modernization goals.

Value Assessment

Rating: fair

Benchmarking the value of this specific R&D contract is challenging due to the unique nature of advanced aerospace development. However, the $66.5 million awarded over its duration represents a significant investment. Without comparable sole-source R&D contracts for similar advanced aircraft technologies, a direct value-for-money assessment is difficult. The cost-plus-fixed-fee (CPFF) structure, while common for R&D, carries inherent risks of cost overruns if not meticulously managed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating that the Department of the Air Force identified The Boeing Company as the only responsible source capable of meeting the government's requirements. This could be due to proprietary technology, unique expertise, or specific integration needs. The lack of competition means that price discovery through market forces was bypassed, potentially leading to higher costs than if multiple bidders had competed.

Taxpayer Impact: Sole-source awards limit taxpayer benefit from competitive pricing. The government relies on robust negotiation and oversight to ensure fair value when competition is absent.

Public Impact

The primary beneficiaries are the Department of the Air Force and the U.S. military, gaining access to potentially cutting-edge aerospace technology. The contract supports research and development activities, aiming to advance aircraft capabilities. Geographic impact is concentrated around Boeing's research facilities, primarily in Missouri. Workforce implications include employment for highly skilled engineers, scientists, and technicians within Boeing and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost-plus-fixed-fee contracts can lead to cost overruns if not closely monitored.
Long contract duration increases exposure to changing technological landscapes and requirements.
Lack of public detail on specific R&D objectives makes performance assessment difficult.

Positive Signals

Award to a major defense contractor like Boeing suggests access to significant technical expertise.
Focus on R&D indicates investment in future technological superiority.
Contract duration allows for in-depth research and development of complex systems.

Sector Analysis

This contract falls within the Aerospace and Defense sector, specifically focusing on Research and Development (R&D) for advanced aircraft. The R&D spending in this sector is critical for maintaining technological superiority and national security. Comparable spending benchmarks are difficult to establish for highly specialized, sole-source R&D efforts, but the overall defense R&D budget is substantial, reflecting the importance of innovation.

Small Business Impact

This contract does not appear to have a small business set-aside component, as it was awarded to a large prime contractor, The Boeing Company. There is no explicit information regarding subcontracting plans for small businesses. The focus on advanced R&D may limit opportunities for small businesses unless they are part of Boeing's specialized supply chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Air Force's contracting and program management offices. Accountability measures would be tied to the achievement of R&D milestones outlined in the contract. Transparency is limited due to the sole-source nature and the classified or proprietary aspects often associated with advanced defense R&D. Inspector General (IG) jurisdiction would apply for investigations into fraud, waste, or abuse.

Related Government Programs

Advanced Aircraft Development Programs
Aerospace Research and Development
Department of Defense Research Contracts
Air Force Technology Modernization

Risk Flags

Sole-source award lacks competitive transparency.
Cost-plus-fixed-fee structure carries inherent cost overrun risk.
Long contract duration may lead to scope creep or obsolescence.
Limited public information on specific R&D goals hinders performance assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $66.5 million to THE BOEING COMPANY. See the official description on USAspending.

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 $66.5 million.

What is the period of performance?

Start: 2006-07-27. End: 2010-10-31.

What specific technological advancements is this contract intended to achieve for future aircraft?

The provided data does not specify the exact technological advancements targeted by this contract. However, given the 'Research and Development in the Physical, Engineering, and Life Sciences' NAICS code (541710) and the awardee (The Boeing Company), it is highly probable that the contract aims to explore and develop next-generation capabilities for military aircraft. This could encompass areas such as advanced aerodynamics, propulsion systems, materials science, stealth technology, avionics, or autonomous flight systems. The long duration and significant funding suggest a complex, multi-faceted research effort rather than a single incremental improvement.

Why was this contract awarded on a sole-source basis, and what are the implications for cost?

Sole-source awards are typically justified when only one responsible source is available or capable of meeting the government's needs. For advanced R&D in aerospace, this could stem from proprietary technology, unique expertise, or critical integration requirements that only a specific contractor possesses. The implication for cost is a lack of competitive pressure, which can potentially lead to higher prices than if multiple bidders had vied for the contract. The government relies on negotiation and stringent oversight to mitigate this risk and ensure fair and reasonable pricing.

How does the Cost Plus Fixed Fee (CPFF) contract type influence risk and incentive for the contractor?

The Cost Plus Fixed Fee (CPFF) contract type means the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is common for R&D where the scope and final costs are uncertain. It shifts much of the cost risk to the government, as the contractor is guaranteed their fee regardless of final cost. However, it incentivizes the contractor to control costs to maximize their profit margin, as the fee is fixed. Effective government oversight is crucial to ensure costs are reasonable and allocable.

What is the historical spending trend for similar R&D contracts within the Department of the Air Force?

Analyzing historical spending trends for similar R&D contracts within the Department of the Air Force requires access to extensive contract databases. However, it is generally understood that the Air Force consistently invests significant resources in R&D to maintain technological superiority. Spending in this area can fluctuate based on strategic priorities, emerging threats, and technological breakthroughs. Contracts for advanced aircraft development, especially sole-source ones, represent a substantial portion of this R&D investment, reflecting the high cost and complexity of aerospace innovation.

What oversight mechanisms are in place to ensure the successful completion of R&D objectives within the contract's timeframe?

Oversight for this contract would involve a multi-layered approach. The Air Force program office would be responsible for monitoring progress against defined R&D milestones, reviewing technical reports, and ensuring adherence to the contract's Statement of Work. Contracting officers would oversee financial aspects, ensuring costs are allowable and reasonable. Regular meetings between government and contractor personnel, technical reviews, and potentially independent government cost estimates would be employed. The long duration necessitates adaptive oversight to manage evolving research challenges and ensure alignment with strategic goals.

What is the potential impact of this contract on the broader aerospace R&D ecosystem and small business participation?

As a sole-source award to a major prime contractor, this contract's direct impact on the broader aerospace R&D ecosystem might be limited in terms of fostering broad competition. However, it signifies continued investment in critical defense technologies, which can stimulate innovation within specialized fields. Small business participation is likely indirect, potentially through subcontracting opportunities if Boeing identifies specific needs that smaller, specialized firms can fulfill. Without explicit subcontracting goals, the extent of small business involvement remains uncertain, though large primes often leverage niche expertise from smaller companies.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: J S MCDONNELL BLVD, SAINT LOUIS, MO, 63166

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline