Boeing awarded $26.4M for P-8A flight operations support, with contract ending December 2023

Contract Overview

Contract Amount: $26,414,655 ($26.4M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2019-09-26

End Date: 2023-12-04

Contract Duration: 1,530 days

Daily Burn Rate: $17.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THE PURPOSE OF THIS EFFORT IS FOR THE CONTRACTOR TO PERFORM ACTIVITIES REQUIRED TO SUPPORT GOVERNMENT FLIGHT OPERATIONS ON THE 737 P-8A FLIGHT TEST AIRCRAFT AND THE PATUXENT RIVER NAVAL AIR STATION SYSTEM INTEGRATION LAB (PAXSIL).

Place of Performance

Location: TUKWILA, KING County, WASHINGTON, 98108

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $26.4 million to THE BOEING COMPANY for work described as: THE PURPOSE OF THIS EFFORT IS FOR THE CONTRACTOR TO PERFORM ACTIVITIES REQUIRED TO SUPPORT GOVERNMENT FLIGHT OPERATIONS ON THE 737 P-8A FLIGHT TEST AIRCRAFT AND THE PATUXENT RIVER NAVAL AIR STATION SYSTEM INTEGRATION LAB (PAXSIL). Key points: 1. Contract focuses on critical support for government flight operations of the P-8A aircraft. 2. The contract duration spans over 1500 days, indicating a long-term support requirement. 3. A Cost Plus Fixed Fee (CPFF) pricing structure was utilized, which can present cost control challenges. 4. The contract was not competed, raising questions about potential cost efficiencies and market fairness. 5. The primary contractor, Boeing, is the original manufacturer of the P-8A aircraft. 6. The contract value is relatively modest within the broader defense aerospace sector. 7. Support is centered at the Patuxent River Naval Air Station System Integration Lab (PAXSIL).

Value Assessment

Rating: fair

The contract value of $26.4 million for supporting flight operations and a system integration lab appears reasonable for a specialized defense asset like the P-8A. However, without specific benchmarks for similar support contracts or detailed cost breakdowns, a precise value-for-money assessment is challenging. The CPFF structure necessitates close oversight to ensure costs remain controlled and justified. Comparing this to other sustainment contracts for complex aircraft systems would provide better context.

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 taken when a single contractor possesses unique capabilities or intellectual property essential for the requirement, such as the original equipment manufacturer. The lack of competition means there was no opportunity for price discovery through a bidding process, potentially leading to higher costs than a competed contract.

Taxpayer Impact: Taxpayers may not have received the benefit of competitive pricing, which could have driven down costs. The absence of competition also limits transparency into whether the government secured the best possible value.

Public Impact

The primary beneficiaries are the U.S. Navy personnel operating and testing the P-8A aircraft. Services delivered include essential support for flight operations and the system integration lab. The geographic impact is concentrated at the Patuxent River Naval Air Station in Maryland. Workforce implications include the need for specialized technical and operational personnel to support the aircraft and lab.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
CPFF contract type requires robust oversight to manage costs effectively.
Sole-source award limits transparency in pricing and value determination.

Positive Signals

Contract supports a critical national defense asset (P-8A Poseidon).
Boeing, as the OEM, possesses unique expertise for this aircraft.
Contract ensures continued operational readiness and testing capabilities.

Sector Analysis

The defense aerospace sector is characterized by high barriers to entry, complex technological requirements, and significant government investment. Contracts for aircraft sustainment and support are a substantial part of this market. The P-8A Poseidon is a key maritime patrol and reconnaissance aircraft, and its operational readiness is crucial. Spending on such support activities is typical for major defense platforms, often involving long-term contracts with the original equipment manufacturers due to specialized knowledge and infrastructure.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. Given the sole-source nature and the specialized requirements for supporting a major defense aircraft like the P-8A, it is unlikely that significant subcontracting opportunities for small businesses would be mandated or readily available through this specific award. The primary focus is on the prime contractor's capabilities.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The CPFF structure necessitates diligent financial oversight to scrutinize costs and ensure they are reasonable and allocable to the contract. Transparency is generally limited in sole-source awards, but contract performance reports and audits would serve as accountability measures.

Related Government Programs

P-8A Poseidon Aircraft Program
Naval Air Systems Command (NAVAIR) Contracts
Defense Logistics Agency (DLA) Aviation Support
Aircraft Maintenance and Repair Services

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Potential for cost overruns without strong oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.4 million to THE BOEING COMPANY. THE PURPOSE OF THIS EFFORT IS FOR THE CONTRACTOR TO PERFORM ACTIVITIES REQUIRED TO SUPPORT GOVERNMENT FLIGHT OPERATIONS ON THE 737 P-8A FLIGHT TEST AIRCRAFT AND THE PATUXENT RIVER NAVAL AIR STATION SYSTEM INTEGRATION LAB (PAXSIL).

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 $26.4 million.

What is the period of performance?

Start: 2019-09-26. End: 2023-12-04.

What is the historical spending trend for P-8A flight operations support with Boeing?

Historical spending data for this specific contract indicates a total value of $26,414,655.45 over its duration from September 26, 2019, to December 4, 2023. This represents an average annual spend of approximately $6.6 million. Without access to prior contracts for similar support or broader P-8A sustainment spending, it's difficult to establish a trend. However, this figure provides a baseline for the cost associated with maintaining flight operations and integration lab support for this critical aircraft platform during the specified period.

How does the Cost Plus Fixed Fee (CPFF) structure impact cost control for this contract?

The Cost Plus Fixed Fee (CPFF) structure allows the contractor (Boeing) to recover all allowable costs incurred, plus a predetermined fixed fee representing profit. While this structure is often used when the scope of work is not precisely defined or involves inherent uncertainties, it places a significant burden on the government to meticulously monitor and audit the contractor's costs. Without robust oversight, there is a risk of cost overruns, as the contractor has less incentive to control expenses compared to fixed-price contracts. The fixed fee, however, provides a predictable profit margin for the contractor.

What are the risks associated with a sole-source award for critical aircraft support?

Sole-source awards, like this one for P-8A flight operations support, carry inherent risks. The primary risk is the potential for inflated pricing due to the absence of competitive pressure. Without multiple bidders vying for the contract, the government may not achieve the best possible value. Additionally, sole-source contracts can reduce transparency in the procurement process and may limit opportunities for innovation or alternative solutions that could be brought forward by a more competitive market. There's also a risk of contractor complacency if performance is not rigorously monitored.

What is Boeing's track record in supporting the P-8A Poseidon program?

Boeing is the original manufacturer of the P-8A Poseidon aircraft, giving them unparalleled expertise and institutional knowledge regarding its systems, performance, and maintenance requirements. Their track record in developing and producing the P-8A is extensive, having delivered numerous aircraft to the U.S. Navy and international partners. This deep involvement suggests a strong capability to provide the necessary flight operations support and integration lab services. However, like any large defense contractor, specific performance metrics and past issues on other contracts would provide a more nuanced view of their overall track record.

Are there alternative aircraft or support solutions that could have been considered?

Given that the P-8A Poseidon is a highly specialized maritime patrol and reconnaissance aircraft, and Boeing is its original equipment manufacturer (OEM), the scope of alternative support solutions is likely limited. The contract specifically addresses support for the P-8A flight test aircraft and its integration lab. While other aircraft platforms exist for different missions, they are not direct substitutes for the P-8A's unique capabilities. The decision for a sole-source award suggests that Boeing's proprietary knowledge and direct involvement with the P-8A were deemed essential, making direct competition for this specific support function challenging.

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: 6200 JS 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: $30,674,497

Exercised Options: $26,414,655

Current Obligation: $26,414,655

Actual Outlays: $3,593,957

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $593,598

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001916G0001

IDV Type: BOA

Timeline