Naval Air Systems Command awarded $384M for F-18 Hornet development, with significant R&D investment

Contract Overview

Contract Amount: $384,022,849 ($384.0M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2001-02-08

End Date: 2011-09-26

Contract Duration: 3,882 days

Daily Burn Rate: $98.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200109!000554!1700!AA4E0 !NAVAL AIR SYSTEMS COMMAND !N0001901C0074 !A!N!*!N! !20010208!20060831!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST. LOUIS (CITY) !MISSOURI !+000079000000!N!N!000000000000!AC65!RDTE/ELECTRONICS & COMMUNICATION EQ-ENG/MANUF DEV !A7 !ELECTRONICS AND COMMUNICATION !2AFX!F-18 HORNET !336413!*!*!3! ! ! !*!*!*!B!*!*!A! !D !N!U!1!001!N!1A!A!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! !Y! ! !0001!

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $384.0 million to THE BOEING COMPANY for work described as: 200109!000554!1700!AA4E0 !NAVAL AIR SYSTEMS COMMAND !N0001901C0074 !A!N!*!N! !20010208!20060831!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST. L… Key points: 1. Contract focused on research, development, testing, and evaluation for advanced electronics and communication equipment. 2. Significant portion allocated to engineering and manufacturing development for the F-18 Hornet platform. 3. Long contract duration suggests a complex, multi-year development effort. 4. Sole-source award raises questions about competition and potential cost efficiencies. 5. Contractor has a substantial track record, indicated by the large award value. 6. Geographic concentration in Missouri for contract performance.

Value Assessment

Rating: fair

The contract's value of $384 million for R&D and manufacturing development for the F-18 Hornet is substantial. Without specific benchmarks for similar development contracts for advanced aircraft electronics, it's difficult to definitively assess value for money. However, the sole-source nature of the award suggests limited opportunity for competitive pricing, which could lead to higher costs than a competed contract. The long duration also implies significant resource commitment, and the final cost will be a key indicator of efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor was solicited. This approach is typically used when a unique capability or proprietary technology is required, or when only one source is capable of meeting the government's needs. The lack of competition means that the government did not benefit from the price discovery mechanisms inherent in a competitive bidding process, potentially leading to higher prices.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to reduce costs. The government's ability to negotiate the best possible price is diminished in a sole-source scenario.

Public Impact

The primary beneficiaries are the U.S. Navy's aviation programs, specifically those utilizing the F-18 Hornet. Services delivered include research, development, engineering, and manufacturing of advanced electronics and communication equipment. Geographic impact is concentrated in St. Louis, Missouri, where the contractor is located. Workforce implications include employment for engineers, technicians, and manufacturing personnel involved in advanced aerospace development.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Long contract duration increases the risk of cost overruns and schedule delays.
Focus on R&D and manufacturing development for a specific aircraft platform may limit broader applicability of innovations.

Positive Signals

Contract supports critical defense capabilities for the F-18 Hornet platform.
Significant investment in R&D can lead to technological advancements in military aviation.
Contractor's location in Missouri supports regional employment in the aerospace sector.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft electronics and communication systems. The market for such specialized components is often characterized by high barriers to entry due to technological complexity and stringent qualification requirements. Spending in this area is critical for maintaining and upgrading military aviation fleets. Comparable spending benchmarks would typically involve other major defense contracts for aircraft system development and integration.

Small Business Impact

The data indicates this was a sole-source award to McDonnell Douglas Corporation (later acquired by Boeing), and there is no indication of a small business set-aside. Therefore, the direct impact on small businesses through this specific contract is likely minimal. However, large prime contractors often engage small businesses as subcontractors for specialized components or services, so there could be indirect subcontracting opportunities, though not explicitly mandated by this award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy and the Naval Air Systems Command. Mechanisms would include contract performance reviews, milestone tracking, and financial audits. Given the R&D and manufacturing development nature, oversight would focus on technical progress, adherence to specifications, and cost control. Inspector General involvement would be triggered by allegations of fraud, waste, or abuse.

Related Government Programs

F-18 Hornet Program
Naval Aviation Research and Development
Aerospace Electronics Manufacturing
Defense Contractor Support Services

Risk Flags

Sole-source award
Potential for cost overruns
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $384.0 million to THE BOEING COMPANY. 200109!000554!1700!AA4E0 !NAVAL AIR SYSTEMS COMMAND !N0001901C0074 !A!N!*!N! !20010208!20060831!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST. LOUIS (CITY) !MISSOURI !+000079000000!N!N!000000000000!AC65!RDTE/ELECTRONICS & COMMUNICATION EQ-ENG/MANUF DEV !A7 !ELECTRONICS AND COMMUNICATION !2AFX!F-18 HORNET !336413!*!*!3! ! ! !*!*!*!B!*!*!A!

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 Navy).

What is the total obligated amount?

The obligated amount is $384.0 million.

What is the period of performance?

Start: 2001-02-08. End: 2011-09-26.

What was the specific technological advancement or capability improvement sought by the Naval Air Systems Command through this contract for the F-18 Hornet?

The contract data indicates the focus was on 'RDTE/ELECTRONICS & COMMUNICATION EQ-ENG/MANUF DEV' for the F-18 Hornet. This suggests the Naval Air Systems Command sought advancements in the aircraft's electronic systems and communication equipment, likely encompassing areas such as radar, electronic warfare, navigation systems, or data links. The 'Engineering and Manufacturing Development' aspect implies the contract aimed not just at research but also at developing and potentially producing these improved systems, ensuring they were integrated and functional on the F-18 platform. The specific nature of these advancements would be detailed in the contract's Statement of Work, which is not provided in the summary data.

How does the $384 million award value compare to other R&D contracts for similar advanced aircraft electronics?

Directly comparing the $384 million award value requires access to a database of similar R&D contracts for advanced aircraft electronics, including their scope, duration, and technological complexity. However, for major defense platforms like the F-18, significant investment in system upgrades and development is common. This figure represents a substantial commitment, suggesting a complex and lengthy development cycle. Without specific comparable contract data, it's challenging to definitively state if this value is high or low. Factors influencing cost include the novelty of the technology, the number of development phases, and the required testing and validation processes. The sole-source nature also complicates direct value comparisons.

What are the primary risks associated with a sole-source contract of this magnitude and duration?

The primary risks associated with a sole-source contract of this magnitude ($384 million) and duration (initial award Feb 2001, with potential for extensions up to Aug 2006, and final delivery in 2011) include: 1. Cost Overruns: Without competitive pressure, the contractor may have less incentive to control costs, potentially leading to prices higher than in a competitive environment. 2. Lack of Innovation: The absence of multiple bidders can stifle innovation, as there is no competitive drive to develop novel or more cost-effective solutions. 3. Performance Issues: If the sole-source contractor faces technical challenges or performance issues, the government has limited alternative options for recourse or replacement without significant disruption. 4. Reduced Transparency: Sole-source awards can sometimes lack the transparency inherent in competitive bidding processes, making it harder to scrutinize pricing and value.

What is the historical spending pattern for the F-18 Hornet program or similar aircraft electronics development by the Department of the Navy?

Historical spending on the F-18 Hornet program, and defense programs in general, often involves substantial, multi-year investments in research, development, and procurement. The Department of the Navy has consistently allocated significant funds to maintain and modernize its fleet, including upgrades to platforms like the F-18. Contracts for electronics and communication systems development are a critical component of this spending. While specific historical figures for this exact contract type are not provided, the overall trend for major defense platforms involves large-scale R&D efforts, often spanning decades and involving billions of dollars across various contracts for different systems and upgrades. This $384 million award fits within the expected pattern of significant investment in advanced military aircraft technology.

What is the track record of McDonnell Douglas Corporation (and later Boeing) in delivering complex aerospace R&D contracts for the U.S. military?

McDonnell Douglas Corporation, and subsequently The Boeing Company after its acquisition, has a long and extensive track record of delivering complex aerospace R&D and manufacturing contracts for the U.S. military. Both entities have been prime contractors on numerous major defense programs, including fighter jets, bombers, helicopters, and associated systems. They possess significant expertise in aircraft design, systems integration, electronics development, and large-scale manufacturing. While specific performance metrics for every contract are not publicly detailed, their continued role as a major defense contractor indicates a generally successful history of meeting government requirements, albeit sometimes facing challenges common to large, complex defense projects such as cost overruns or schedule delays, which are often addressed through contract modifications and oversight.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Address: J S MCDONNELL BLVD, SAINT LOUIS, MO, 63166

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline