Boeing Awarded $302M for Saudi AWACS Modernization, Facing Limited Competition
Contract Overview
Contract Amount: $302,294,994 ($302.3M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2017-10-16
End Date: 2026-03-26
Contract Duration: 3,083 days
Daily Burn Rate: $98.1K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: ROYAL SAUDI AIRFORCE (RSAF) AIRBORNE WARNING AND CONTROL SYSTEM (AWACS) MODERNIZATION PROGRAM (RAMP) PHASE I
Place of Performance
Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135
State: Oklahoma Government Spending
Plain-Language Summary
Department of Defense obligated $302.3 million to THE BOEING COMPANY for work described as: ROYAL SAUDI AIRFORCE (RSAF) AIRBORNE WARNING AND CONTROL SYSTEM (AWACS) MODERNIZATION PROGRAM (RAMP) PHASE I Key points: 1. The contract is for the Royal Saudi Air Force AWACS Modernization Program (RAMP) Phase I. 2. The Boeing Company is the sole awardee, indicating limited competition. 3. The contract type is Fixed Price Incentive, which can shift risk to the government if costs exceed targets. 4. The program falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector.
Value Assessment
Rating: questionable
The contract value of $302.3 million is significant. Without benchmarks for similar modernization programs or specific cost breakdowns, assessing value for money is difficult. The Fixed Price Incentive structure requires careful monitoring to ensure costs remain controlled.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract is explicitly stated as 'NOT AVAILABLE FOR COMPETITION,' suggesting a sole-source or limited competition scenario, likely due to specialized technology or existing platform integration. This limits price discovery and potentially increases costs for the taxpayer.
Taxpayer Impact: The lack of competition raises concerns about the optimal use of taxpayer funds, as alternative, potentially lower-cost solutions may not have been explored.
Public Impact
This contract supports a foreign military sale, impacting international relations and defense capabilities. Modernization of critical airborne warning and control systems enhances operational effectiveness for the RSAF. The significant contract value represents a substantial allocation of resources towards defense technology and services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition
- Fixed Price Incentive contract type
- Foreign military sale context
Positive Signals
- Supports modernization of critical defense assets
- Long-term engagement with a key international partner
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on aircraft parts and auxiliary equipment manufacturing. Spending in this sector is often characterized by high R&D costs, long production cycles, and significant government procurement, especially for foreign military sales.
Small Business Impact
The data indicates the prime contractor is The Boeing Company. There is no information provided regarding the involvement or subcontracting opportunities for small businesses in this specific contract.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Air Force and the Department of Defense, particularly concerning the execution of the foreign military sale and adherence to contract terms. The Fixed Price Incentive structure necessitates close monitoring of cost performance.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Limited competition may lead to higher costs.
- Fixed Price Incentive contract type carries cost overrun risk for the government.
- Foreign military sales can be subject to geopolitical shifts and changing international relations.
- Long contract duration increases exposure to economic fluctuations and technological obsolescence.
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, ok, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $302.3 million to THE BOEING COMPANY. ROYAL SAUDI AIRFORCE (RSAF) AIRBORNE WARNING AND CONTROL SYSTEM (AWACS) MODERNIZATION PROGRAM (RAMP) PHASE I
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 $302.3 million.
What is the period of performance?
Start: 2017-10-16. End: 2026-03-26.
What specific technological advancements does this modernization program entail, and how do they justify the cost?
The program aims to upgrade the Royal Saudi Air Force's Airborne Warning and Control System (AWACS) capabilities. Specific advancements likely include enhanced radar systems, improved communication suites, modernized avionics, and potentially upgraded command and control software. These upgrades are intended to provide superior situational awareness, longer detection ranges, and better interoperability with allied forces, justifying the investment by maintaining a technological edge.
Given the limited competition, what mechanisms are in place to ensure cost reasonableness and prevent potential overruns?
The contract's Fixed Price Incentive (FPI) structure inherently includes a target cost, target profit, and a ceiling price. Cost sharing mechanisms between the government and contractor are defined, meaning both parties bear a portion of any cost variances. Robust government oversight, including Earned Value Management (EVM) and regular audits, is crucial to monitor performance, identify deviations early, and ensure the final cost does not exceed the ceiling.
How does this modernization program align with broader US foreign policy and defense cooperation objectives in the region?
This program aligns with US foreign policy by strengthening the defense capabilities of a key regional partner, Saudi Arabia. Enhancing the RSAF's AWACS capabilities contributes to regional stability and security, potentially deterring adversaries and improving interoperability for joint operations. It also supports the US defense industrial base by providing significant contracts to American companies like Boeing.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
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: $324,801,775
Exercised Options: $324,801,775
Current Obligation: $302,294,994
Subaward Activity
Number of Subawards: 125
Total Subaward Amount: $98,117,964
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2017-10-16
Current End Date: 2026-03-26
Potential End Date: 2026-03-26 00:00:00
Last Modified: 2025-11-25
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