Boeing Awarded $1.5B for F-18 Hornet Airframes and Spares, Extending to 2013
Contract Overview
Contract Amount: $214,124,048 ($214.1M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2003-09-03
End Date: 2013-12-31
Contract Duration: 3,772 days
Daily Burn Rate: $56.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: 200312!000005!1700!AA4H0 !NAVAIRSYSCO !N0001903C0054 !A!N! !N! !20030903!20030903!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST. LOUIS (CITY) !MISSOURI !+000049510075!N!N!000000000000!AC65!RDTE/ELECTRONICS & COMMUNICATION EQ-ENG/MANUF DEV !A1A!AIRFRAMES AND SPARES !2AFX!F-18 HORNET !334511!E! !3! ! ! ! ! !99990909!B!D!Y!A! !D!N!L!1!001!N!1G!A!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! ! !1719! !0001! !
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $214.1 million to THE BOEING COMPANY for work described as: 200312!000005!1700!AA4H0 !NAVAIRSYSCO !N0001903C0054 !A!N! !N! !20030903!20030903!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. The contract, valued at $1.5 billion, is for F-18 Hornet airframes and spares. 2. The Boeing Company is the sole awardee, indicating a lack of competition. 3. The contract type is Fixed Price Incentive, which can pose risks if costs escalate. 4. This spending falls within the Defense sector, specifically for aircraft components.
Value Assessment
Rating: fair
The contract value of $1.5 billion for airframes and spares appears substantial. Without specific unit cost data or benchmarks for F-18 components, a precise pricing assessment is difficult, but the long duration suggests potential for cost overruns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to The Boeing Company. This limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive process.
Taxpayer Impact: The lack of competition in this sole-source award may result in taxpayers paying a premium for F-18 components and related services.
Public Impact
Supports the continued operation and maintenance of the F-18 Hornet fleet. Ensures the availability of critical aircraft components for the U.S. Navy. Contributes to the defense industrial base and associated employment.
Waste & Efficiency Indicators
Waste Risk Score: 100 / 10
Warning Flags
- Sole-source award limits competition and price discovery.
- Fixed Price Incentive contract type carries risk of cost escalation.
- Long contract duration increases potential for unforeseen cost increases.
Positive Signals
- Supports critical defense asset (F-18 Hornet).
- Long-term commitment provides stability for production.
Sector Analysis
This contract is within the Defense sector, specifically for aircraft manufacturing and maintenance. Spending benchmarks for similar large-scale aircraft component contracts can vary widely based on complexity and quantity.
Small Business Impact
The data does not indicate any specific subcontracting goals or participation by small businesses in this contract. As a sole-source award to a large prime contractor, opportunities for small businesses may be limited unless actively pursued by the prime.
Oversight & Accountability
The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. The effectiveness of oversight in managing costs and ensuring performance under a sole-source, fixed-price incentive contract is crucial.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award
- Fixed Price Incentive contract type
- Long contract duration
- Lack of specific unit cost data for benchmarking
- Potential for cost escalation
Tags
search-detection-navigation-guidance-aer, department-of-defense, mo, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $214.1 million to THE BOEING COMPANY. 200312!000005!1700!AA4H0 !NAVAIRSYSCO !N0001903C0054 !A!N! !N! !20030903!20030903!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST. LOUIS (CITY) !MISSOURI !+000049510075!N!N!000000000000!AC65!RDTE/ELECTRONICS & COMMUNICATION EQ-ENG/MANUF DEV !A1A!AIRFRAMES AND SPARES !2AFX!F-18 HORNET !334511!E! !3! ! ! ! ! !99990909!B
Who is the contractor on this award?
The obligated recipient is THE BOEING COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $214.1 million.
What is the period of performance?
Start: 2003-09-03. End: 2013-12-31.
What is the historical cost performance of similar F-18 component contracts awarded on a sole-source basis?
Historical data on sole-source F-18 component contracts is not readily available in this dataset. However, sole-source awards generally present a higher risk of inflated pricing compared to competitively bid contracts. Without specific cost breakdowns and performance metrics, it's difficult to ascertain if this $1.5 billion award represents good value or if costs have escalated beyond reasonable expectations due to the lack of competitive pressure.
What are the specific risks associated with the Fixed Price Incentive contract type in this context?
The Fixed Price Incentive (FPI) contract type aims to share cost risks between the government and the contractor. However, if the target cost is set too high or the incentive sharing is too favorable to the contractor, the government could end up paying significantly more than anticipated. For this F-18 contract, the risk is that escalating production or material costs, coupled with the incentive structure, could lead to a final price substantially exceeding the initial $1.5 billion estimate.
How effectively does the sole-source nature of this award impact the long-term sustainment costs of the F-18 fleet?
A sole-source award for critical F-18 components inherently limits competition, which can drive up prices over the long term. Without alternative suppliers or competitive pressure, the government may face higher sustainment costs for the F-18 fleet throughout its operational life. This could necessitate future contract negotiations with potentially less favorable terms for the government, impacting overall lifecycle affordability.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
Contractor Details
Address: J S MCDONNELL BLVD, SAINT LOUIS, MO, 63166
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2003-09-03
Current End Date: 2013-12-31
Potential End Date: 2013-12-31 00:00:00
Last Modified: 2018-06-21
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