Boeing awarded $45.9M for F/A-18E/F Service Life Modifications, a sole-source contract

Contract Overview

Contract Amount: $45,898,751 ($45.9M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2019-11-26

End Date: 2024-04-30

Contract Duration: 1,617 days

Daily Burn Rate: $28.4K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: F/A-18E/F SERVICE LIFE MODS -SAN ANTONIO

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $45.9 million to THE BOEING COMPANY for work described as: F/A-18E/F SERVICE LIFE MODS -SAN ANTONIO Key points: 1. Contract awarded to The Boeing Company for critical aircraft sustainment. 2. Sole-source award indicates limited competition, potentially impacting price. 3. Contract duration of over 1600 days suggests a long-term sustainment need. 4. Cost-plus-fixed-fee structure may incentivize cost increases. 5. Focus on service life modifications highlights aging fleet requirements. 6. This contract supports the Department of the Navy's aviation readiness.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source contract is challenging without comparable bids. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex sustainment, can lead to higher final costs than fixed-price contracts if not managed closely. The total award amount of $45.9 million over approximately 4.5 years suggests a significant investment in maintaining the operational readiness of the F/A-18E/F fleet. Without competitive data, it's difficult to definitively assess if this represents excellent value for money, but the necessity of sustainment for aging platforms often leads to higher costs.

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 specific contractor possesses unique capabilities, proprietary knowledge, or when urgency and limited availability of alternatives preclude full and open competition. The lack of competition means that price discovery through market forces was not utilized, potentially leading to less favorable pricing for the government compared to a competed scenario.

Taxpayer Impact: For taxpayers, sole-source awards mean that the government cannot leverage competitive pressures to drive down costs. This can result in higher overall spending for essential services and equipment, as the government relies on the awarded contractor's proposed pricing without the benefit of competing offers.

Public Impact

The primary beneficiaries are the U.S. Navy personnel who operate and maintain the F/A-18E/F Super Hornet aircraft. The contract delivers essential services for extending the service life of critical fighter aircraft. Geographic impact is primarily at naval air stations where these aircraft are based and maintained. Workforce implications include sustainment engineers, technicians, and support staff at Boeing and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing advantages for the government.
Cost-plus-fixed-fee contract type can incentivize higher costs if not rigorously managed.
Long contract duration requires sustained oversight to ensure performance and cost control.

Positive Signals

Contract addresses critical sustainment needs for a key naval aviation platform.
Boeing's established expertise with the F/A-18E/F platform suggests a high likelihood of successful execution.
Service life modifications are essential for maintaining fleet readiness and extending aircraft operational lifespan.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and long product lifecycles. Aircraft manufacturing and sustainment, particularly for military platforms like the F/A-18E/F, are dominated by a few large prime contractors. This contract fits within the broader defense sustainment market, which is crucial for maintaining the operational readiness of aging military fleets. Comparable spending benchmarks for similar service life extension programs can vary widely based on aircraft type, scope of work, and contract structure, but typically represent substantial investments.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. The prime contractor, The Boeing Company, is a large aerospace firm. While large prime contractors are often required to subcontract portions of their work to small businesses, the specific subcontracting plan and its impact on the small business ecosystem are not detailed in the provided data. Without further information on subcontracting goals, it's difficult to assess the direct impact on small businesses.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a sole-source award, there may be increased scrutiny on cost reasonableness and performance metrics. The contract type (CPFF) necessitates robust government oversight to monitor costs, ensure efficiency, and prevent cost overruns. Inspector General jurisdiction would apply to investigate fraud, waste, or abuse related to the contract.

Related Government Programs

F/A-18 Hornet Program
Naval Aviation Sustainment Programs
Defense Contractor Logistics Support
Aircraft Service Life Extension Programs

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 $45.9 million to THE BOEING COMPANY. F/A-18E/F SERVICE LIFE MODS -SAN ANTONIO

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 $45.9 million.

What is the period of performance?

Start: 2019-11-26. End: 2024-04-30.

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

The Boeing Company has a long-standing relationship with the U.S. Navy as the prime contractor for the F/A-18E/F Super Hornet program. This includes original production and ongoing sustainment, maintenance, and upgrade services. Boeing has consistently been involved in ensuring the operational readiness and extending the service life of this critical platform. Their extensive experience with the aircraft's design, manufacturing, and operational requirements positions them as a key partner for sustainment efforts. Historical data from previous contracts would likely show a pattern of performance, though specific metrics on cost, schedule, and quality for past sustainment efforts would require deeper analysis of contract performance reports and award fee evaluations.

How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for sustainment?

The Cost-Plus-Fixed-Fee (CPFF) contract type is often used for complex research, development, or sustainment efforts where the scope of work may evolve or is not precisely defined at the outset. Under CPFF, the government reimburses the contractor for allowable costs incurred, plus a predetermined fixed fee representing profit. This contrasts with fixed-price contracts, where the price is set upfront, shifting more risk to the contractor. While CPFF provides flexibility and can incentivize contractors to perform work that might be difficult to scope initially, it also carries a higher risk of cost overruns for the government if not managed diligently. The fixed fee, however, provides some cost certainty regarding the contractor's profit margin.

What are the primary risks associated with sole-source defense contracts?

Sole-source defense contracts carry several inherent risks. The most significant is the lack of price competition, which can lead to higher costs for the government as market pressures to offer competitive pricing are absent. This can result in a less favorable value for taxpayer money. Another risk is potential complacency from the contractor, as there is no direct competitive threat to incentivize innovation or efficiency improvements. Furthermore, sole-source awards can create vendor lock-in, making it difficult and costly to switch providers in the future. Ensuring fair and reasonable pricing requires extensive government negotiation and cost analysis, which can be resource-intensive.

What is the significance of 'Service Life Modifications' for military aircraft?

Service Life Modifications (SLMs) are crucial for extending the operational lifespan of military aircraft beyond their originally designed service life. Aircraft are subjected to extreme stresses during flight operations, leading to fatigue and wear in structural components. SLMs involve extensive inspections, repairs, and upgrades to address this fatigue, reinforce critical structures, and incorporate modernizations. This process allows the military to continue utilizing expensive platforms for longer periods, delaying the need for costly new aircraft procurements. It is essential for maintaining fleet readiness and ensuring that aging aircraft can safely perform their missions.

How does this contract fit into the broader F/A-18E/F program spending history?

This $45.9 million contract for F/A-18E/F Service Life Modifications represents a component of the overall lifecycle costs associated with the Super Hornet program. The F/A-18E/F program, including procurement and sustainment, has historically represented a significant portion of the Navy's aviation budget. Annual spending on sustainment, upgrades, and modifications for the Super Hornet fleet can fluctuate based on fleet readiness needs, modernization priorities, and the availability of funding. This specific contract addresses a critical sustainment requirement, ensuring the continued operational capability of a key strike fighter. Analyzing its place requires comparing it to other sustainment contracts and the overall program budget over time.

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: $45,898,751

Exercised Options: $45,898,751

Current Obligation: $45,898,751

Actual Outlays: $7,442,402

Subaward Activity

Number of Subawards: 12

Total Subaward Amount: $9,354,614

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