Boeing awarded $6.27M R&D contract for advanced aerospace research by the Air Force

Contract Overview

Contract Amount: $6,829,046 ($6.8M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2024-02-14

End Date: 2027-02-07

Contract Duration: 1,089 days

Daily Burn Rate: $6.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 9

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: FORSEE

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $6.8 million to THE BOEING COMPANY for work described as: FORSEE Key points: 1. Contract focuses on cutting-edge physical and engineering sciences, aligning with critical defense modernization efforts. 2. Competition was robust, with 9 bidders vying for the contract, suggesting a healthy market for these specialized services. 3. The contract type, Cost Plus Fixed Fee, indicates potential for cost overruns but provides a defined profit margin for the contractor. 4. Performance is expected over approximately 3 years, requiring sustained focus on research and development objectives. 5. This award falls within the broader R&D sector, specifically targeting advanced physical and engineering sciences. 6. The contractor, The Boeing Company, has a significant presence in the aerospace and defense industry.

Value Assessment

Rating: good

The award amount of $6.27 million for a 3-year R&D contract appears reasonable given the specialized nature of research and development in advanced physical and engineering sciences. Benchmarking against similar contracts in this niche sector is challenging without more specific technical details, but the number of bidders suggests competitive pricing was likely achieved. The Cost Plus Fixed Fee structure, while carrying inherent risk, aims to control costs while allowing for innovation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with nine distinct bidders participating. This high level of competition is a positive indicator, suggesting that the government sought a wide range of solutions and that multiple capable firms were interested in the work. The presence of numerous bidders generally leads to better price discovery and potentially more innovative approaches as companies vie for the award.

Taxpayer Impact: A competitive bidding process for R&D contracts like this one helps ensure that taxpayer dollars are used efficiently, driving down costs and fostering innovation by selecting the most capable and cost-effective solution.

Public Impact

The primary beneficiaries are the Department of Defense and the U.S. Air Force, who will receive advancements in aerospace technology. The contract will deliver research and development services in advanced physical, engineering, and life sciences. The geographic impact is primarily centered in Missouri, where the contractor is located, potentially creating or sustaining high-skilled jobs. Workforce implications include the need for specialized scientists, engineers, and researchers to execute the R&D tasks.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can sometimes lead to higher final costs than fixed-price contracts if initial estimates are inaccurate.
The duration of the contract (over 3 years) requires ongoing monitoring to ensure research stays on track and within budget.
The specific R&D focus is broad ('Physical, Engineering, and Life Sciences'), requiring clear performance metrics to assess progress.

Positive Signals

Awarded under full and open competition with 9 bidders, indicating strong market interest and likely competitive pricing.
The contractor, The Boeing Company, is a major aerospace firm with extensive experience in defense R&D.
The contract aligns with the Air Force's strategic goals for technological advancement in aerospace.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on advanced physical, engineering, and life sciences, excluding nanotechnology and biotechnology. This is a critical area for defense innovation, supporting the development of next-generation aerospace capabilities. The market for such specialized R&D is often dominated by large, established aerospace and defense contractors, though smaller, specialized firms can also compete. Comparable spending benchmarks are difficult without knowing the precise R&D focus, but significant government investment is typical in this domain.

Small Business Impact

This contract does not appear to have a small business set-aside component (ss=false, sb=false). Given the nature of advanced aerospace R&D, the prime contract is likely awarded to a large, established entity like Boeing. However, there may be opportunities for small businesses to participate as subcontractors, depending on Boeing's subcontracting plan and the specific technical requirements of the research.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Air Force, likely through contracting officers and technical representatives. Accountability measures will be tied to the Cost Plus Fixed Fee structure, requiring detailed reporting on costs incurred and progress towards fixed fee milestones. Transparency is generally maintained through contract award databases and public reporting, though specific R&D details may be sensitive.

Related Government Programs

Aerospace Research and Development
Advanced Materials Research
Defense Science and Technology
Air Force Research Laboratory Programs
Cost-Plus Contracting

Risk Flags

Cost Overrun Risk (CPFF)
Scope Creep Potential
Long-term R&D Uncertainty

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $6.8 million to THE BOEING COMPANY. FORSEE

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 $6.8 million.

What is the period of performance?

Start: 2024-02-14. End: 2027-02-07.

What is The Boeing Company's track record with similar Cost Plus Fixed Fee R&D contracts for the Department of Defense?

The Boeing Company has a long and extensive history of performing Cost Plus Fixed Fee (CPFF) Research and Development (R&D) contracts with the Department of Defense (DoD). As one of the largest aerospace and defense contractors globally, Boeing frequently engages in complex, long-term R&D projects that necessitate flexible contract types like CPFF. This structure is often used when the scope of work is not fully defined at the outset, allowing for adjustments as research progresses while providing the contractor with a predetermined profit margin. Boeing's experience typically involves managing significant budgets, coordinating large teams of scientists and engineers, and navigating stringent reporting requirements inherent in CPFF agreements. While specific performance metrics for past contracts are often proprietary, Boeing's continued success in securing such awards suggests a generally positive track record in delivering on R&D objectives within this contract framework, though like all large contractors, they have faced scrutiny and challenges on specific programs.

How does the $6.27 million award value compare to typical R&D spending in advanced physical and engineering sciences for the Air Force?

The $6.27 million award value for this specific R&D contract is relatively modest when considered within the broader context of the Air Force's overall Research, Development, Test, and Evaluation (RDT&E) budget. The Air Force invests billions annually in R&D across numerous domains, including advanced physical and engineering sciences. This particular contract, with a duration of approximately three years, suggests a focused research effort rather than a large-scale program. While specific benchmarks for 'Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)' are hard to pinpoint without more granular data, contracts of this size often support specific technological investigations, feasibility studies, or component development. Larger, more comprehensive R&D programs or system developments would typically command significantly higher funding levels, often in the tens or hundreds of millions of dollars.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D, and how are they mitigated?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract, particularly for R&D, is cost overrun. Because the contractor is reimbursed for allowable costs plus a fixed fee, there is less incentive to control expenses compared to fixed-price contracts. If the R&D effort proves more complex or costly than initially estimated, the total cost to the government can escalate beyond initial projections. Another risk is scope creep, where the research objectives may expand without adequate adjustments to the fee or timeline. Mitigation strategies employed by the government include robust oversight, detailed cost tracking and auditing, clearly defined performance metrics and milestones, and strong technical monitoring by government representatives. The fixed fee itself provides some incentive for the contractor to manage costs efficiently to maximize their profit margin within the agreed-upon fee. Regular reviews and clear communication channels are crucial for managing R&D challenges.

Given the 'full and open competition' and 9 bidders, what does this imply about the market maturity for this specific R&D area?

The fact that this contract was awarded under 'full and open competition' with nine bidders suggests a relatively mature and accessible market for the specific R&D services sought. A high number of bidders indicates that multiple companies possess the necessary technical capabilities, resources, and understanding of the requirements to compete effectively. This maturity implies that the field of research is not overly specialized or dominated by a few proprietary technologies, allowing for broader participation. It also suggests that the government's solicitation was clear and well-defined, enabling a diverse range of potential offerors to respond. For taxpayers, a competitive market generally leads to better pricing, increased innovation as companies differentiate their offerings, and a wider selection of qualified contractors, reducing reliance on any single entity.

How does the PSC code (or lack thereof) and NAICS code (541715) inform our understanding of the contract's purpose and scope?

The NAICS code 541715, 'Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology),' clearly defines the broad scientific and technical domain of this contract. It indicates that the work involves systematic study to gain new knowledge and understanding in areas like physics, chemistry, materials science, mechanical engineering, electrical engineering, and various life sciences, excluding specific fields like nano and biotech. The absence of a specific Product Service Code (PSC) is notable. PSCs are typically used to categorize the goods or services being procured. The lack of a specific PSC might suggest that the contract is for a very unique or broadly defined R&D effort that doesn't neatly fit into standard categories, or it could be an administrative oversight. However, the NAICS code provides a strong indication that the contract is focused on fundamental or applied research and development activities rather than production or routine services.

What are the potential implications of this contract being awarded to The Boeing Company in Missouri?

Awarding this R&D contract to The Boeing Company in Missouri has several potential implications. Economically, it signifies continued investment in the state's aerospace and defense sector, potentially supporting or creating high-skilled jobs for engineers, scientists, and technicians. It reinforces Missouri's position as a hub for aerospace innovation and manufacturing. For Boeing, it represents an opportunity to leverage its existing infrastructure and workforce in the state for cutting-edge research, potentially leading to future technological advancements and follow-on contracts. It also means that federal R&D funding is being channeled into a specific region, contributing to the local economy and technological ecosystem. The presence of a major defense contractor like Boeing often spurs related economic activity and supports a network of local suppliers and service providers.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Solicitation ID: HR001123S0023

Offers Received: 9

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: $17,288,030

Exercised Options: $11,047,737

Current Obligation: $6,829,046

Actual Outlays: $511,970

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline