DoD's $73.6M AWACS Block 40/45 FRP-C contract with Boeing faces scrutiny over competition and value
Contract Overview
Contract Amount: $73,571,833 ($73.6M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2020-02-01
End Date: 2025-01-31
Contract Duration: 1,826 days
Daily Burn Rate: $40.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: AWACS BLOCK 40/45 FULL RATE PRODUCTION (FRP) COMPLETION (FRP-C)
Place of Performance
Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135
State: Oklahoma Government Spending
Plain-Language Summary
Department of Defense obligated $73.6 million to THE BOEING COMPANY for work described as: AWACS BLOCK 40/45 FULL RATE PRODUCTION (FRP) COMPLETION (FRP-C) Key points: 1. The contract's value is substantial at $73.6 million, primarily for aircraft manufacturing. 2. Sole-source award to Boeing raises concerns about competitive pricing and potential overspending. 3. The risk of cost overruns is moderate given the Cost Plus Fixed Fee (CPFF) structure. 4. This spending falls within the Defense sector, specifically aircraft manufacturing.
Value Assessment
Rating: questionable
The $73.6 million contract value for AWACS Block 40/45 FRP-C is difficult to benchmark without specific per-unit cost data. However, the sole-source nature and CPFF contract type suggest potential for higher costs compared to competitively bid fixed-price contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, awarded solely to The Boeing Company. The lack of competition limits price discovery and may result in less favorable terms for the government.
Taxpayer Impact: The absence of competition could lead to higher costs for taxpayers, as there is no market pressure to drive down prices.
Public Impact
Taxpayers may be paying a premium due to the lack of competitive bidding. The Air Force continues to invest in the AWACS platform, impacting modernization priorities. This contract supports a significant defense program, contributing to national security capabilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of competitive pricing data
Positive Signals
- Supports critical defense capability (AWACS)
- Long-term program with defined end date
Sector Analysis
This contract falls under the Defense sector, specifically aircraft manufacturing. Spending benchmarks for similar sole-source, cost-plus contracts for advanced aircraft modifications can vary widely, but competition typically yields better value.
Small Business Impact
This contract was awarded to a large prime contractor, The Boeing Company, and does not appear to have specific provisions for small business participation noted in the provided data.
Oversight & Accountability
The sole-source nature of this contract warrants close oversight to ensure costs are reasonable and the government receives fair value. Robust auditing of the CPFF elements is crucial.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competition may lead to inflated prices.
- Cost-plus contract type increases government's risk of cost overruns.
- Limited transparency on specific cost drivers and profit margins.
- Potential for contractor to prioritize profit over cost efficiency.
Tags
aircraft-manufacturing, department-of-defense, ok, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $73.6 million to THE BOEING COMPANY. AWACS BLOCK 40/45 FULL RATE PRODUCTION (FRP) COMPLETION (FRP-C)
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 $73.6 million.
What is the period of performance?
Start: 2020-02-01. End: 2025-01-31.
What is the estimated per-unit cost for the AWACS Block 40/45 upgrade, and how does it compare to historical or projected costs for similar avionics modernization programs?
Without specific per-unit cost breakdowns, it's challenging to provide an exact figure. However, sole-source, cost-plus contracts often result in higher per-unit costs compared to competitive, fixed-price awards. Benchmarking against similar avionics upgrades, especially those that were competitively procured, would be necessary to assess value.
What are the specific risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this program, and what mitigation strategies are in place?
CPFF contracts carry risks of cost overruns as the contractor is reimbursed for allowable costs plus a fixed fee. The government bears the risk of cost increases. Mitigation strategies typically involve stringent cost monitoring, detailed audits, and clear definition of work scope to prevent scope creep.
How effective is the AWACS Block 40/45 upgrade in enhancing the Air Force's airborne early warning and control capabilities, and does the sole-source award impact the pace of this effectiveness?
The Block 40/45 upgrade is intended to modernize the AWACS mission computing and communication systems, enhancing its capabilities against evolving threats. While the upgrade itself aims for effectiveness, the sole-source nature might not incentivize the most rapid or cost-effective delivery of these enhancements compared to a competitive environment.
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
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
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: $85,787,691
Exercised Options: $73,571,833
Current Obligation: $73,571,833
Actual Outlays: $1,719,277
Subaward Activity
Number of Subawards: 31
Total Subaward Amount: $3,646,181
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2020-02-01
Current End Date: 2025-01-31
Potential End Date: 2025-01-31 00:00:00
Last Modified: 2025-03-05
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