Boeing receives $41.9M for Japan AWACS post-delivery support, raising questions about competition and value

Contract Overview

Contract Amount: $41,912,034 ($41.9M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2015-11-15

End Date: 2026-05-31

Contract Duration: 3,850 days

Daily Burn Rate: $10.9K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::OT::IGF JAPAN AWACS POST DELIVERY SUPPORT (PDS) XVII-XXIII

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $41.9 million to THE BOEING COMPANY for work described as: IGF::OT::IGF JAPAN AWACS POST DELIVERY SUPPORT (PDS) XVII-XXIII Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Long contract duration of over 10 years suggests a need for sustained support, but also locks in pricing. 3. The 'Other Computer Related Services' NAICS code is broad and may not fully capture the specialized nature of AWACS support. 4. Limited public information on performance metrics makes it difficult to assess value for money. 5. The contract's value, while significant, needs to be benchmarked against similar sustainment contracts for complex defense systems. 6. Sole-source awards can indicate unique contractor capabilities but also pose risks of complacency and inflated pricing.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the sole-source nature and lack of publicly available performance data. The fixed-price contract type provides some cost certainty, but without competitive bids, it's difficult to ascertain if the pricing reflects fair market value. The long duration could lead to cost efficiencies if managed well, but also carries the risk of price escalation if not closely monitored. Comparisons to similar sustainment contracts for complex airborne warning and control systems would be necessary for a more robust assessment.

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 typically occurs when only one contractor possesses the necessary capabilities, technology, or security clearances. While this can ensure specialized support, it significantly reduces opportunities for price negotiation and innovation that competition can drive. The lack of bidders means there's no direct market comparison to assess if the awarded price is optimal.

Taxpayer Impact: For taxpayers, sole-source awards mean less assurance of obtaining the best possible price. The absence of competition removes a key mechanism for driving down costs, potentially leading to higher overall expenditure for this critical support.

Public Impact

The primary beneficiaries are the U.S. Air Force units operating the E-3 AWACS aircraft in Japan, ensuring operational readiness. Services delivered include crucial post-delivery support, maintenance, and sustainment for the AWACS platform. The geographic impact is focused on U.S. Air Force installations in Japan, supporting national security interests in the region. Workforce implications include the need for highly skilled technical personnel to support advanced avionics and systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Long contract duration may obscure performance issues over time.
Lack of detailed performance metrics hinders value assessment.
Broad NAICS code may not reflect specialized support needs.

Positive Signals

Firm fixed-price contract provides cost certainty.
Long duration indicates a recognized need for sustained support.
Boeing is the original equipment manufacturer, likely possessing unique expertise.

Sector Analysis

The aerospace and defense sector is characterized by long product lifecycles and high R&D costs, often leading to sole-source sustainment contracts for complex platforms like the AWACS. The market for specialized military aircraft support is concentrated among a few major prime contractors. This contract fits within the broader category of defense logistics and sustainment services, which represent a significant portion of the Department of Defense's overall spending. Benchmarking would involve comparing this contract's value and terms to other long-term sustainment agreements for similar airborne platforms.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there information indicating significant subcontracting opportunities for small businesses. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal, unless Boeing actively engages small businesses for specific support elements not detailed in the award notice.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. The firm fixed-price nature provides some cost control, but the long duration necessitates continuous monitoring of performance and potential scope creep. Transparency is limited due to the sole-source nature and the proprietary information often associated with defense systems support. The Inspector General's office may conduct audits or investigations if performance or cost concerns arise.

Related Government Programs

AWACS Sustainment Programs
Airborne Early Warning and Control Systems
DoD Logistics and Maintenance Contracts
Foreign Military Sales Support

Risk Flags

Sole-source award
Long contract duration
Lack of detailed performance metrics
Broad NAICS code

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.9 million to THE BOEING COMPANY. IGF::OT::IGF JAPAN AWACS POST DELIVERY SUPPORT (PDS) XVII-XXIII

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 $41.9 million.

What is the period of performance?

Start: 2015-11-15. End: 2026-05-31.

What is Boeing's track record with AWACS sustainment contracts, particularly for international partners?

Boeing, as the original equipment manufacturer (OEM) for the E-3 AWACS, has a long-standing track record of providing sustainment services for this platform globally. This includes numerous contracts with the U.S. Air Force and various international partners operating the AWACS. Historically, these contracts have been critical for maintaining the operational readiness of the E-3 fleet. However, the nature of sole-source, long-term sustainment contracts means that performance can vary, and detailed public assessments of Boeing's performance on specific contracts, especially international ones like this Japan PDS XVII-XXIII, are often limited. While Boeing generally possesses the requisite expertise, the absence of competitive bidding on this specific contract prevents a direct comparison of its performance against potential alternatives.

How does the $41.9 million value compare to similar post-delivery support contracts for complex military aircraft?

Directly comparing the $41.9 million value of this contract is challenging without more specific details on the scope of services and the duration it covers. However, for complex, long-duration sustainment of major defense platforms, such figures are not uncommon. For instance, sustainment contracts for other large airborne platforms like tankers or bombers can run into hundreds of millions or even billions of dollars over their lifespan. The key differentiator here is the sole-source award and the specific focus on post-delivery support for the AWACS in Japan. A more meaningful comparison would involve analyzing the 'per-year' cost or 'per-aircraft' cost for similar AWACS sustainment contracts, or contracts for other airborne early warning systems, ideally those that were competitively procured to establish a clearer benchmark for value for money.

What are the primary risks associated with a sole-source award for this type of long-term support?

The primary risks associated with a sole-source award for long-term support, such as the Japan AWACS PDS contract, revolve around cost and performance. Without competition, there is less incentive for the contractor (Boeing) to offer the lowest possible price, potentially leading to cost overruns or inflated pricing compared to a competitive scenario. This can result in a lower value for taxpayer money. Furthermore, a lack of competition can reduce the urgency for the contractor to innovate or improve service delivery, potentially leading to complacency. There's also a risk that the government becomes overly reliant on a single provider, making it difficult to switch or negotiate favorable terms in the future. Robust contract management and oversight are crucial to mitigate these risks.

What does the 'Other Computer Related Services' NAICS code imply about the nature of the support provided?

The North American Industry Classification System (NAICS) code 541519, 'Other Computer Related Services,' is a broad category that encompasses a wide range of IT and computer services not elsewhere classified. For a contract supporting a complex system like the AWACS, this code might include services such as software maintenance, system integration, IT support, data processing, and potentially cybersecurity-related services. However, its broadness means it may not fully capture the highly specialized, mission-critical, and hardware-integrated nature of supporting an advanced military aircraft platform. More specific codes related to aerospace engineering, defense system maintenance, or avionics support might have been more descriptive, but 541519 is often used when a contract spans multiple service types or when a more precise classification is difficult.

What are the implications of the contract's long duration (ending in 2026, starting in 2015) for program effectiveness and cost?

The contract's long duration, spanning from November 2015 to May 2026 (over 10 years), has several implications. Positively, it suggests a stable, long-term requirement for AWACS support in Japan, allowing for consistent operational readiness and potentially enabling the contractor to achieve economies of scale or specialized efficiencies over time. It also provides predictability for both the government and the contractor. However, a long duration also increases the risk of cost escalation if inflation or unforeseen technical challenges arise, especially under a fixed-price contract where adjustments might be limited. It also means that the government is locked into this specific support arrangement for an extended period, potentially missing out on newer technologies or more cost-effective solutions that might emerge later in the contract lifecycle. Effective program management and periodic reviews are essential to ensure continued value and relevance.

Are there any indications of performance issues or concerns related to this specific contract or similar Boeing AWACS support contracts?

Based on the provided data, there are no explicit indications of performance issues or concerns directly tied to this specific 'IGF JAPAN AWACS POST DELIVERY SUPPORT (PDS) XVII-XXIII' contract. The 'st' and 'sn' fields are marked as 'OK'. However, the lack of detailed performance metrics in the public domain makes a definitive assessment difficult. For long-term, sole-source defense contracts, performance can be a nuanced issue. While major failures might trigger formal concerns, subtle issues like missed response times, incremental cost increases not captured by the base price, or less-than-optimal technical solutions can persist without being flagged publicly. A thorough review would require access to internal performance reports, user feedback, and potentially IG audits, which are not available in this summary data.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

Product/Service Code: SPECIAL STUDIES/ANALYSIS, NOT R&D › SPECIAL STUDIES - NOT R and D

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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: $52,125,922

Exercised Options: $41,912,034

Current Obligation: $41,912,034

Subaward Activity

Number of Subawards: 58

Total Subaward Amount: $10,051,144

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline