Boeing awarded $69.4M R&D contract for software development by the Air Force
Contract Overview
Contract Amount: $69,382,300 ($69.4M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2021-11-29
End Date: 2026-11-21
Contract Duration: 1,818 days
Daily Burn Rate: $38.2K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: SOFTWARE DEVELOPMENT
Place of Performance
Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245
Plain-Language Summary
Department of Defense obligated $69.4 million to THE BOEING COMPANY for work described as: SOFTWARE DEVELOPMENT Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Significant investment in research and development for advanced software capabilities. 3. Long contract duration of 1818 days suggests a complex, multi-phase project. 4. The contract's value places it in the upper tier for R&D software development. 5. Performance is tied to a Cost Plus Fixed Fee structure, incentivizing cost control. 6. Geographic focus on California for this specific award.
Value Assessment
Rating: fair
The contract's Cost Plus Fixed Fee (CPFF) structure allows for cost overruns, which can impact overall value. Benchmarking against similar sole-source R&D contracts is difficult due to unique project scopes. However, the fixed fee component provides some cost certainty for the government. The absence of competition inherently reduces the government's ability to secure the lowest possible price.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This approach is often used when a specific contractor possesses unique capabilities or intellectual property essential for the project. The lack of a competitive bidding process means that the government did not benefit from multiple proposals to drive down costs or explore alternative solutions.
Taxpayer Impact: Sole-source awards limit the government's leverage in price negotiations, potentially leading to higher costs for taxpayers compared to a competed contract.
Public Impact
The primary beneficiary is the Department of the Air Force, which will receive advanced software development services. This contract supports research and development efforts, potentially leading to enhanced military capabilities. The geographic impact is concentrated in California, where the contractor will likely perform the work. The contract may indirectly support a specialized workforce in software engineering and R&D within the aerospace sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pressure on pricing.
- CPFF contract type can lead to cost escalations if not managed closely.
- Lack of transparency in the justification for sole-source award.
Positive Signals
- Award to a major defense contractor with established capabilities.
- Focus on R&D suggests investment in future technological advancements.
- Clear performance period and fee structure provide some predictability.
Sector Analysis
This contract falls within the broader Information Technology and Defense sectors, specifically focusing on Research and Development for software. The market for specialized defense software development is dominated by a few large aerospace and defense contractors. The value of this contract is substantial, reflecting the complexity and strategic importance of the software being developed. Comparable spending benchmarks are difficult to establish precisely due to the R&D nature and sole-source award.
Small Business Impact
This contract does not appear to involve small business set-asides. As a sole-source award to a large prime contractor, there is a potential for subcontracting opportunities for small businesses, but this is not guaranteed or mandated by the contract structure itself. The impact on the small business ecosystem is likely minimal unless the prime contractor actively engages small businesses for specialized components or services.
Oversight & Accountability
Oversight will be managed by the Department of the Air Force contracting and program management offices. Accountability measures are tied to the Cost Plus Fixed Fee structure, requiring detailed reporting and justification of costs. Transparency may be limited due to the sole-source nature of the award, with justifications for the procurement method typically being the primary public disclosure.
Related Government Programs
- Department of Defense Research and Development Contracts
- Air Force Software Development Programs
- Aerospace and Defense Contractor Awards
- Cost Plus Fixed Fee Contracts
Risk Flags
- Sole-source award may limit competition and increase costs.
- Cost Plus Fixed Fee structure can incentivize cost overruns.
- Lack of detailed scope in summary data makes value assessment difficult.
Tags
software-development, research-and-development, department-of-defense, air-force, the-boeing-company, sole-source, cost-plus-fixed-fee, california, large-contract, information-technology, defense-sector
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $69.4 million to THE BOEING COMPANY. SOFTWARE DEVELOPMENT
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 $69.4 million.
What is the period of performance?
Start: 2021-11-29. End: 2026-11-21.
What specific software capabilities is this contract intended to develop?
The provided data indicates the contract is for 'SOFTWARE DEVELOPMENT' under NAICS code 541715 (Research and Development in the Physical, Engineering, and Life Sciences). While the specific software capabilities are not detailed in the summary data, R&D contracts of this nature typically aim to develop advanced, often classified, software for defense applications. This could include areas such as command and control systems, intelligence analysis tools, simulation and training software, or advanced mission planning systems. The long duration and significant funding suggest a project with substantial technical challenges and strategic importance to the Air Force.
What is the justification for awarding this contract on a sole-source basis?
Sole-source awards are typically justified when only one responsible source is capable of providing the required supplies or services. For a large defense contractor like The Boeing Company, this could be due to unique proprietary technology, existing system integration expertise, or a requirement to leverage prior R&D investments. The specific justification would be documented in a Justification and Approval (J&A) document, which is usually publicly available but not included in this summary data. Without the J&A, it's presumed that Boeing possesses unique capabilities essential for this particular software development effort that cannot be replicated by other firms.
How does the Cost Plus Fixed Fee (CPFF) structure impact cost control and value for money?
The CPFF contract type involves the government paying the contractor's allowable costs plus a fixed fee representing profit. This structure is often used for R&D where the scope or costs are uncertain. While the fixed fee provides some predictability for the contractor's profit, it can incentivize cost overruns as the contractor is reimbursed for all allowable costs. Effective government oversight, including rigorous cost monitoring and auditing, is crucial to ensure value for money. The 'value for money' is thus heavily dependent on the government's ability to manage the contractor's costs and ensure the final product meets the defined objectives.
What is the historical spending pattern for similar software development R&D contracts by the Department of the Air Force?
Historical spending on software development R&D by the Department of the Air Force is substantial and has been increasing, driven by the need for modernization and advanced capabilities. The Air Force frequently awards large contracts for software, both for new development and sustainment. While specific historical data for comparable sole-source R&D software contracts is not provided here, the general trend indicates a significant and growing investment in this area. The $69.4 million awarded to Boeing is a considerable sum, placing it among significant R&D investments, but the Air Force's overall R&D budget encompasses many such projects.
What are the potential risks associated with a sole-source, CPFF contract for software R&D?
Key risks include potential cost overruns due to the CPFF structure, where the contractor is reimbursed for all allowable costs, potentially leading to higher-than-expected expenditures. The sole-source nature eliminates competitive pressure, which can reduce the incentive for the contractor to offer the most competitive pricing. There's also a risk of scope creep if the R&D objectives are not clearly defined and managed. Furthermore, reliance on a single contractor can create vendor lock-in and limit future flexibility. Effective program management and oversight are critical to mitigate these risks.
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 › Space R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 900 N PACIFIC COAST HWY, EL SEGUNDO, CA, 90245
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $104,224,321
Exercised Options: $104,224,321
Current Obligation: $69,382,300
Subaward Activity
Number of Subawards: 92
Total Subaward Amount: $21,736,003
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA880621D0001
IDV Type: IDC
Timeline
Start Date: 2021-11-29
Current End Date: 2026-11-21
Potential End Date: 2026-11-21 00:00:00
Last Modified: 2026-01-13
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