Navy awards $58.5M to Boeing for EA-18G Growler retrofit kits, with no competition

Contract Overview

Contract Amount: $58,508,229 ($58.5M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2019-11-04

End Date: 2025-11-30

Contract Duration: 2,218 days

Daily Burn Rate: $26.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: EA-18G RETROFIT GROUP B KITS

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $58.5 million to THE BOEING COMPANY for work described as: EA-18G RETROFIT GROUP B KITS Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential cost savings. 2. Significant duration of 2218 days suggests a long-term need for these critical aircraft components. 3. The contract is for Aircraft Manufacturing, a sector with high barriers to entry and specialized expertise. 4. Fixed-price contract type aims to control costs, but the lack of competition limits benchmarking. 5. Delivery order indicates a phased approach to fulfilling the requirement over several years. 6. The contract's value, while substantial, needs to be assessed against the total lifecycle cost of the EA-18G program.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its sole-source nature and the specialized components involved. Without competitive bids, it's difficult to ascertain if the $58.5 million represents a fair market price. The fixed-price contract type offers some cost control, but the absence of competition means there's less pressure on the contractor to offer the most economical solution. Further analysis would require comparing the unit cost of these kits to historical data for similar retrofits or to the cost of components for other advanced military aircraft.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, The Boeing Company, was solicited. This approach is typically used when a unique product or service is required, or when only one responsible source is available. The lack of competition means that taxpayers did not benefit from the price reductions and innovations that typically arise from a competitive bidding process. This can lead to higher prices than might be achieved in an open market.

Taxpayer Impact: The absence of competition means taxpayers may be paying a premium for these EA-18G retrofit kits, as there was no market pressure to drive down costs. This could represent a less efficient use of federal funds compared to a competitively awarded contract.

Public Impact

The primary beneficiaries are the U.S. Navy's EA-18G Growler fleet, ensuring these electronic warfare aircraft remain operational and effective. The contract delivers critical retrofit kits necessary for maintaining and upgrading the avionics and systems of the EA-18G. This contract supports the operational readiness of a key component of the U.S. naval air power, impacting national security. Workforce implications are likely within The Boeing Company's aerospace manufacturing facilities, particularly in Missouri, supporting skilled labor in the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits transparency and potential for cost savings.
Long contract duration could mask potential cost overruns or scope creep if not managed tightly.
Reliance on a single contractor for critical components poses supply chain risk.

Positive Signals

Fixed-price contract type provides some cost certainty.
Award to a prime defense contractor like Boeing suggests established capability and experience.
Retrofit kits are essential for maintaining the operational effectiveness of advanced military aircraft.

Sector Analysis

The EA-18G Growler is a specialized electronic warfare aircraft, and the manufacturing of its retrofit kits falls within the broader aerospace and defense sector. This sector is characterized by high technological complexity, significant R&D investment, and long product lifecycles. The market for such specialized components is often concentrated among a few large, established defense contractors due to stringent qualification requirements and security clearances. Comparable spending benchmarks would likely involve other major aircraft modification or component supply contracts within the Department of Defense.

Small Business Impact

This contract does not appear to include a small business set-aside, as indicated by 'sb': false. Given the sole-source nature and the specialized manufacturing required for EA-18G retrofit kits, it is unlikely that small businesses would be primary awardees. However, The Boeing Company, as the prime contractor, may engage small businesses as subcontractors for specific components or services, contributing to the broader small business ecosystem within the defense supply chain.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy's contracting and program management offices. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified kits. Transparency is limited due to the sole-source award, but contract modifications and performance reports would be subject to internal review. The Inspector General of the Department of Defense may have jurisdiction for audits and investigations into potential fraud, waste, or abuse.

Related Government Programs

EA-18G Growler Program
Naval Air Systems Command (NAVAIR) Contracts
Aerospace Manufacturing Contracts
Defense Contractor Support Services
Electronic Warfare Systems Procurement

Risk Flags

Sole-source award
Lack of competitive pricing
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $58.5 million to THE BOEING COMPANY. EA-18G RETROFIT GROUP B KITS

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 $58.5 million.

What is the period of performance?

Start: 2019-11-04. End: 2025-11-30.

What is the track record of The Boeing Company in delivering similar aircraft retrofit kits for the EA-18G or comparable platforms?

The Boeing Company has a long and extensive history as a prime contractor for the U.S. military, including significant involvement with the EA-18G Growler program. As the manufacturer of the aircraft, Boeing is inherently positioned to provide the necessary retrofit kits. Their track record typically involves delivering complex systems and components under various contract types. While specific performance data for this particular retrofit kit contract is not detailed here, Boeing's overall performance in the defense sector is generally characterized by large-scale production capabilities and deep integration with military platforms. However, like any major defense contractor, they have faced scrutiny and challenges on specific programs regarding cost, schedule, and performance. For this contract, the sole-source nature means performance will be evaluated against the agreed-upon specifications and delivery schedule rather than through direct comparison with competitors.

How does the $58.5 million contract value compare to historical spending on EA-18G retrofit kits or similar aircraft modernization efforts?

Direct historical spending comparisons for this specific 'EA-18G RETROFIT GROUP B KITS' are difficult without access to detailed contract databases and specific line-item information over time. The $58.5 million award is for a single contract with a long duration (2218 days), suggesting it covers a significant quantity or a complex set of upgrades. To provide a meaningful comparison, one would need to analyze the total obligated amounts for similar retrofit kits across different fiscal years, potentially looking at the average cost per kit or the total program spend for EA-18G modernization. Benchmarking against modernization efforts for other advanced military aircraft, such as F-35 or F-22 upgrades, could offer a broader perspective on the scale of investment in maintaining cutting-edge platforms, but direct cost-per-unit comparisons would require detailed specification alignment.

What are the primary risks associated with a sole-source award for critical aircraft components like these retrofit kits?

The primary risks associated with a sole-source award for critical aircraft components are diminished price competition, potential for inflated costs, and reduced incentive for contractor innovation or efficiency. Without competing bids, the government lacks a benchmark to ensure it is receiving the best possible price for the kits. This can lead to overspending federal funds. Furthermore, a sole-source contract can reduce the contractor's motivation to find cost-saving measures or accelerate delivery, as there is no competitive pressure. There's also a risk of vendor lock-in, where the government becomes dependent on a single supplier, potentially limiting future flexibility. Finally, the lack of transparency inherent in sole-source procurements can make it harder to identify potential inefficiencies or questionable pricing practices.

How effective is the firm-fixed-price contract type in controlling costs for long-duration, specialized manufacturing contracts like this one?

The firm-fixed-price (FFP) contract type is generally considered effective in controlling costs for specialized manufacturing, especially when the scope of work is well-defined. It shifts the risk of cost overruns to the contractor, as they are obligated to deliver the specified goods or services for the agreed-upon price. For this EA-18G retrofit kit contract, the FFP structure provides the Navy with a degree of cost certainty. However, the effectiveness can be diminished in sole-source situations where the initial price negotiation might not be as competitive. Additionally, for very long-duration contracts, there's a risk that unforeseen economic factors or changes in material costs could impact the contractor's profitability, potentially leading to requests for equitable adjustments or a less aggressive approach to cost management if margins are squeezed. Clear specifications and robust oversight are crucial to maximizing the cost-control benefits of FFP.

What is the significance of the 'Aircraft Manufacturing' (NAICS 336411) classification for this contract?

The NAICS code 336411, 'Aircraft Manufacturing,' signifies that this contract is for the production of complete aircraft or parts thereof. This classification indicates a high level of technical expertise, specialized facilities, and adherence to stringent quality control and safety standards required in the aerospace industry. Companies operating under this code are typically involved in complex assembly, fabrication of airframes, engines, and critical components. For the EA-18G retrofit kits, this classification underscores the specialized nature of the work, likely involving advanced materials, precision engineering, and integration with sophisticated avionics and electronic warfare systems. It also suggests that the primary contractor, The Boeing Company, possesses the necessary infrastructure and certifications to perform such high-stakes manufacturing.

What are the potential implications of this contract on the future sustainment and modernization of the EA-18G Growler fleet?

This contract for retrofit kits is crucial for the continued sustainment and modernization of the EA-18G Growler fleet. By providing necessary upgrades, these kits help ensure the aircraft remain technologically relevant and operationally effective against evolving threats in the electronic warfare domain. The long duration suggests a planned, phased approach to upgrading a significant portion of the fleet. Successful execution of this contract will directly impact the readiness and capability of naval aviation's electronic attack mission. Furthermore, the data and experience gained from producing and integrating these kits could inform future sustainment strategies and potential upgrades, ensuring the EA-18G's longevity and effectiveness well into the future.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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: $58,589,448

Exercised Options: $58,508,229

Current Obligation: $58,508,229

Actual Outlays: $116,622

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $19,745,696

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