Boeing awarded $31.6M for Air Force flight research, facing limited competition

Contract Overview

Contract Amount: $31,569,452 ($31.6M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2021-06-01

End Date: 2022-08-31

Contract Duration: 456 days

Daily Burn Rate: $69.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: SOUTHERN CROSS INTEGRATED FLIGHT RESEARCH EXPERIMENT-SCIFIRE

Place of Performance

Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $31.6 million to THE BOEING COMPANY for work described as: SOUTHERN CROSS INTEGRATED FLIGHT RESEARCH EXPERIMENT-SCIFIRE Key points: 1. Contract awarded to a single, large defense contractor, raising questions about competitive pricing. 2. Research and Development focus suggests potential for innovation but also inherent project risks. 3. Contract duration of 456 days indicates a medium-term project with defined deliverables. 4. The contract's value is significant within the R&D sector for specialized flight research. 5. Limited competition may impact the government's ability to secure the best value. 6. Performance is tied to a Cost Plus Fixed Fee structure, incentivizing cost control.

Value Assessment

Rating: fair

The contract value of $31.6 million for a 456-day R&D project appears substantial. Benchmarking against similar specialized flight research contracts is difficult without more specific details on the scope of work. The Cost Plus Fixed Fee (CPFF) structure, while common in R&D, can sometimes lead to higher costs if not closely managed, as the contractor is reimbursed for allowable costs plus a fixed fee. The provided data does not allow for a direct comparison of per-unit costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This limits the opportunity for multiple vendors to bid, potentially reducing price discovery and the government's leverage in negotiations. The rationale for a sole-source award, especially in R&D, often relates to unique capabilities or proprietary technology held by a specific contractor. Without further justification, this approach raises concerns about whether the government secured the most cost-effective solution.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the cost savings typically achieved through competitive bidding, potentially leading to higher overall expenditure for this research.

Public Impact

The primary beneficiary is the Department of the Air Force, which will receive advanced flight research capabilities. The contract supports research and development in advanced aerospace technologies. The geographic impact is centered in Missouri, where the contractor is located. The project is expected to advance the state of the art in flight research, potentially leading to future technological advancements and military capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and potentially increases costs for taxpayers.
Cost Plus Fixed Fee contract type can incentivize higher spending if not rigorously overseen.
Lack of detailed performance metrics makes it difficult to assess the true value for money.
The specific nature of 'flight research' is broad and could encompass high-risk, uncertain outcomes.

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 capabilities.
The fixed fee component of the CPFF contract provides some cost predictability for the government.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on physical and engineering sciences related to flight. The R&D market for defense is substantial, with significant government investment aimed at maintaining technological superiority. Contracts like this are crucial for developing next-generation aerospace capabilities. Comparable spending benchmarks would typically involve other large-scale R&D efforts in aerospace, often awarded to prime contractors with extensive research facilities and expertise.

Small Business Impact

This contract was not competed and there is no indication of small business set-asides or subcontracting requirements. As a sole-source award to a large prime contractor, it is unlikely to directly benefit small businesses through set-aside provisions. The potential for small business involvement would depend on Boeing's own subcontracting decisions, which are not detailed here.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. The Cost Plus Fixed Fee structure necessitates close monitoring of allowable costs and the contractor's progress towards defined objectives. Transparency is limited due to the sole-source nature and the proprietary aspects often associated with R&D. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Advanced Aerospace Research Programs
Department of Defense Research and Development
Air Force Science and Technology Investments
Cost-Plus-Fixed-Fee Contracts
Sole-Source Defense Procurements

Risk Flags

Sole-source award raises concerns about competition and potential cost overruns.
CPFF contract type requires robust oversight to ensure cost efficiency.
Lack of detailed scope in summary data hinders comprehensive value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.6 million to THE BOEING COMPANY. SOUTHERN CROSS INTEGRATED FLIGHT RESEARCH EXPERIMENT-SCIFIRE

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 $31.6 million.

What is the period of performance?

Start: 2021-06-01. End: 2022-08-31.

What specific research objectives does the 'SOUTHERN CROSS INTEGRATED FLIGHT RESEARCH EXPERIMENT-SCIFIRE' aim to achieve?

The provided data does not detail the specific research objectives of the SCIFIRE experiment. However, given the contract's classification under 'Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)' and its award to The Boeing Company by the Department of the Air Force, it likely pertains to advancing aerospace technologies. This could include areas such as aerodynamic efficiency, novel propulsion systems, advanced materials for aircraft, or integrated flight control systems. The 'Southern Cross' designation might hint at a geographic focus or a specific operational environment being studied. Further details would be found in the contract's statement of work.

Why was this contract awarded on a sole-source basis instead of being competed?

The data indicates this contract was awarded on a 'NOT COMPETED' basis, signifying a sole-source procurement. The specific justification for this sole-source award is not provided in the abbreviated data. Common reasons for sole-source awards in R&D include the contractor possessing unique, specialized knowledge, proprietary technology, or critical infrastructure essential for the research that cannot be replicated by other firms. Alternatively, it could be due to urgent and compelling needs where competition is not feasible, or if the research builds directly upon prior work performed by the same contractor under specific circumstances. A formal justification document would typically be required by federal acquisition regulations.

How does the Cost Plus Fixed Fee (CPFF) contract type influence cost management and contractor incentives?

The Cost Plus Fixed Fee (CPFF) contract type reimburses the contractor for all allowable costs incurred during performance, plus a predetermined fixed fee representing profit. This structure is common for R&D where the scope of work may evolve or is not fully defined at the outset. For the government, the CPFF structure provides flexibility to adapt the research as needed but requires diligent oversight to ensure costs are reasonable and allocable. For the contractor, the fixed fee provides a stable profit margin regardless of cost fluctuations, which can incentivize efficiency. However, it may offer less incentive for aggressive cost reduction compared to fixed-price contracts, as the profit is fixed.

What is the historical spending pattern for similar flight research and development contracts by the Department of the Air Force?

The provided data focuses on a single contract and does not offer historical spending patterns for similar contracts. To analyze historical spending, one would need to query federal procurement databases (like FPDS or USASpending) for contracts awarded by the Department of the Air Force (or DoD broadly) under NAICS code 541715 (Research and Development in the Physical, Engineering, and Life Sciences) or related codes, specifically looking for keywords related to 'flight research,' 'aerospace R&D,' or specific project names. Analyzing trends in award values, competition levels, and contract types over several fiscal years would reveal spending patterns.

What are the potential risks associated with a $31.6 million R&D contract awarded to a single vendor?

A significant risk associated with a $31.6 million R&D contract awarded sole-source to a single vendor is the lack of competitive pressure, which could lead to suboptimal pricing and reduced value for taxpayer money. There's also the risk of vendor lock-in, where the government becomes dependent on that specific contractor's expertise or technology. In R&D, inherent risks include technical uncertainty, where the desired outcomes may not be achieved, or cost overruns, even with a CPFF structure, if not managed effectively. The absence of multiple bidders means potentially missing out on innovative approaches or efficiencies that other firms might have offered.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA868220R0008

Offers Received: 1

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: $47,153,068

Exercised Options: $47,153,068

Current Obligation: $31,569,452

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $14,049,382

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline