Boeing awarded $40.9M for F/A-18E/F Super Hornet sustainment, with contract ending Dec 2025

Contract Overview

Contract Amount: $40,984,572 ($41.0M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2020-05-22

End Date: 2025-12-31

Contract Duration: 2,049 days

Daily Burn Rate: $20.0K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: F/A-18E/F SLM AT SAT FY20

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $41.0 million to THE BOEING COMPANY for work described as: F/A-18E/F SLM AT SAT FY20 Key points: 1. Contract awarded as a sole-source action, limiting competitive pricing benefits. 2. Pricing structure is Cost Plus Fixed Fee, which can lead to cost overruns. 3. The contract duration is substantial, spanning over 2000 days. 4. This award represents a portion of broader sustainment efforts for the Super Hornet fleet. 5. The geographic location of performance is Missouri. 6. The contract is for sustainment, indicating ongoing operational support rather than new development.

Value Assessment

Rating: fair

The contract value of $40.9 million for sustainment of F/A-18E/F aircraft appears to be within a reasonable range for such complex military hardware. However, without specific details on the scope of work (e.g., number of aircraft, types of maintenance, parts included), a precise value-for-money assessment is challenging. The Cost Plus Fixed Fee (CPFF) pricing structure introduces inherent risk, as it incentivizes the contractor to incur costs to achieve a fixed profit, potentially leading to higher overall expenditures than a fixed-price contract. Benchmarking against similar sustainment contracts for advanced fighter jets would be necessary for a more definitive comparison.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of the Navy did not conduct a competitive bidding process. This typically occurs when only one responsible source is available or when urgency dictates a non-competitive award. The lack of competition means that the government did not benefit from the price discovery and potential cost savings that a competitive environment can foster. It is crucial to understand the justification for this sole-source award to ensure it was indeed necessary and that alternatives were not overlooked.

Taxpayer Impact: Taxpayers may not have received the best possible price due to the absence of competition. Sole-source awards can sometimes result in higher costs compared to competitively bid contracts, as the contractor faces less pressure to minimize expenses.

Public Impact

The primary beneficiaries are the U.S. Navy and Marine Corps, who rely on the F/A-18E/F Super Hornet for tactical air power. Services delivered include sustainment, which encompasses maintenance, repair, and potentially upgrades to ensure aircraft readiness. The geographic impact is centered in Missouri, where the contractor, The Boeing Company, will perform the work. This contract supports a significant segment of the aerospace manufacturing and defense industrial base, potentially sustaining jobs within that sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns and reduced incentive for efficiency.
Sole-source award limits competitive pressure, potentially resulting in higher prices for taxpayers.
Long contract duration (over 2000 days) increases exposure to potential cost escalations and scope creep.
Lack of detailed scope of work makes it difficult to fully assess value for money.
Reliance on a single contractor for critical sustainment could pose supply chain or operational risks if not managed proactively.

Positive Signals

Awarding sustainment contracts is crucial for maintaining the operational readiness of critical defense assets like the F/A-18E/F.
The Boeing Company is a long-standing and experienced defense contractor with a proven track record in aircraft manufacturing.
The contract is for sustainment, indicating a focus on keeping existing platforms operational, which is often more cost-effective than procuring entirely new fleets.
The fixed fee component of the CPFF contract provides some level of cost certainty for the government regarding the contractor's profit margin.

Sector Analysis

The F/A-18E/F Super Hornet is a key component of the U.S. Navy's carrier-based strike fighter capability. The market for military aircraft manufacturing and sustainment is highly specialized, dominated by a few large defense contractors. Boeing is a primary manufacturer of this platform, making them a logical, albeit sole-source, provider for its ongoing sustainment. Spending on military aircraft sustainment represents a significant portion of the Department of Defense's overall budget, reflecting the high operational tempo and lifecycle costs of advanced aviation assets. Comparable spending benchmarks would typically involve analyzing other major aircraft sustainment contracts within the DoD.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss' (small business subcontracting) flag is also false. This suggests that small business participation, either as prime contractors or through subcontracting opportunities, may be limited for this specific award. While Boeing is a large prime contractor, the absence of explicit small business goals or set-asides means that the direct economic benefit to the small business ecosystem from this particular contract is likely minimal, unless Boeing proactively engages small businesses in its supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are typically embedded within the contract terms, including performance metrics, reporting requirements, and the CPFF structure itself, which requires detailed cost justification. Transparency is often limited for sole-source defense contracts due to national security considerations and proprietary information. The Inspector General for the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

F/A-18 Hornet Program
Naval Aviation Readiness Programs
Defense Contractor Sustainment Services
Aircraft Maintenance and Repair Contracts
Department of Defense Aircraft Procurement

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Potential for cost overruns
Lack of competitive pricing pressure

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.0 million to THE BOEING COMPANY. F/A-18E/F SLM AT SAT FY20

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 $41.0 million.

What is the period of performance?

Start: 2020-05-22. End: 2025-12-31.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED' and is 'sole-source'. The specific justification for this sole-source award is not detailed in the provided data snippet. Typically, sole-source justifications are documented by the procuring agency (in this case, the Department of the Navy) and can include reasons such as: only one responsible source exists, urgent and compelling needs that preclude full and open competition, or specific national security requirements. Without access to the official justification document (e.g., a Justification and Approval or J&A), it is impossible to definitively state the reason. However, for complex, specialized military platforms like the F/A-18E/F, the original equipment manufacturer (OEM), such as Boeing, is often the only entity capable of providing certain types of sustainment or unique parts, leading to sole-source awards.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types for aircraft sustainment?

Cost Plus Fixed Fee (CPFF) contracts are common in defense contracting, especially for complex projects where the scope of work may evolve or is not fully defined at the outset. Under CPFF, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This structure shifts much of the cost risk to the government, as the contractor is incentivized to incur costs to achieve the fixed profit, potentially leading to higher total costs than fixed-price contracts. Compared to Firm-Fixed-Price (FFP) contracts, which offer the government the best price certainty but place cost risk on the contractor, CPFF provides more flexibility for evolving requirements but less cost control. For sustainment, where the exact maintenance needs can fluctuate, CPFF can be advantageous for ensuring aircraft readiness, but it requires robust government oversight to manage costs effectively. Other variations like Cost Plus Incentive Fee (CPIF) aim to balance cost control with flexibility by adjusting the fee based on performance metrics.

What is the historical spending trend for F/A-18E/F sustainment by the Department of the Navy?

The provided data snippet focuses on a single delivery order valued at approximately $40.9 million for F/A-18E/F SLM AT SAT FY20. To assess historical spending trends, a broader dataset encompassing multiple years and all contracts (including prime contracts, modifications, and delivery orders) related to F/A-18E/F sustainment would be required. Generally, sustainment costs for major weapon systems like the Super Hornet are substantial and ongoing throughout the platform's lifecycle. Factors influencing these costs include the size of the fleet, operational tempo (flight hours), aging of the aircraft, availability of spare parts, and the complexity of required maintenance and upgrades. Historical data would likely show significant annual expenditures, potentially fluctuating based on fleet readiness needs, depot maintenance schedules, and specific upgrade initiatives. Analyzing trends would involve looking at total obligated amounts year-over-year for sustainment-related contract actions.

What are the key performance indicators (KPIs) typically used to measure the success of F/A-18E/F sustainment contracts?

Key Performance Indicators (KPIs) for F/A-18E/F sustainment contracts are designed to ensure the aircraft remain mission-capable and operational. Common KPIs include: 1. **Mission Capable (MC) Rate:** The percentage of aircraft that are available to perform their intended missions at any given time. This is a critical metric for fleet readiness. 2. **Supply Availability:** The rate at which necessary parts and components are available when needed for maintenance and repair, impacting turnaround times. 3. **Aircraft Availability:** Similar to MC rate, but may focus on overall availability for scheduled maintenance or training, not just combat missions. 4. **Mean Time Between Failures (MTBF):** Measures the average time between successive system failures, indicating reliability. 5. **Mean Time To Repair (MTTR):** Measures the average time required to repair a system after a failure, indicating maintainability. 6. **Cost per Flying Hour:** Tracks the total cost associated with operating and maintaining the aircraft for each hour flown, a key indicator of cost-efficiency. 7. **Schedule Compliance:** Adherence to planned maintenance schedules and delivery timelines for parts or services. These KPIs help the government assess the contractor's performance and ensure the value for money invested in sustainment.

What is Boeing's track record with similar F/A-18 sustainment contracts?

The Boeing Company has a long and extensive track record as the prime contractor for the F/A-18 family of aircraft, including the E/F Super Hornet variant. They are responsible for the original production and have historically been awarded numerous contracts for sustainment, including maintenance, repair, overhaul (MRO), and logistics support. Boeing's performance on these contracts is generally viewed within the context of the defense industry's complexities. They have delivered significant sustainment services over the years, contributing to the operational readiness of the Super Hornet fleet. However, like many large defense contractors managing complex programs, there can be instances of contract disputes, cost challenges, or performance issues that are subject to government oversight and review. Accessing specific performance evaluations or past performance reviews would provide a more granular assessment of their track record on similar contracts.

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

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: $40,984,572

Exercised Options: $40,984,572

Current Obligation: $40,984,572

Actual Outlays: $4,051,668

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $6,117,746

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0001918D0001

IDV Type: IDC

Timeline