Navy Awards Boeing $65.9M for F/A-18E/F SLM Aircraft, Raising Concerns Over Sole-Source Procurement
Contract Overview
Contract Amount: $65,933,230 ($65.9M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2023-05-16
End Date: 2024-10-18
Contract Duration: 521 days
Daily Burn Rate: $126.6K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: F/A-18E/F SLM AIRCRAFT
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $65.9 million to THE BOEING COMPANY for work described as: F/A-18E/F SLM AIRCRAFT Key points: 1. Significant contract value for specialized aircraft modification. 2. Sole-source award to Boeing limits competitive pricing. 3. Cost-plus contract type introduces potential for cost overruns. 4. Aircraft manufacturing sector is critical for defense readiness.
Value Assessment
Rating: questionable
The contract value of $65.9M for the F/A-18E/F SLM modification is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential alternatives or previous similar modifications.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis to The Boeing Company, indicating a lack of competition. This method may not yield the best price discovery for the government.
Taxpayer Impact: The absence of competition in this sole-source award could lead to higher costs for taxpayers than if multiple vendors had the opportunity to bid.
Public Impact
Ensures continued readiness and modernization of the F/A-18E/F fleet. Supports a key defense contractor and its supply chain. Potential for increased costs due to lack of competition impacts overall defense budget.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source procurement
- Cost-plus contract type
- Lack of competitive pricing benchmark
Positive Signals
- Maintains critical defense platform capability
- Supports established prime contractor
Sector Analysis
This contract falls within the Defense sector, specifically aircraft manufacturing and modification. Spending benchmarks for such specialized military aircraft programs are typically high, but competitive pricing is crucial for efficiency.
Small Business Impact
The data does not indicate any specific provisions or participation by small businesses in this particular contract award. Further analysis would be needed to determine the extent of small business involvement.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny to ensure fair pricing and justification for not pursuing competitive options. Oversight is needed to monitor cost growth under the cost-plus incentive fee structure.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition.
- Cost-plus contract type can lead to cost overruns.
- Lack of competitive pricing benchmark.
- Potential for reduced price discovery.
- Need for strong government oversight on costs.
Tags
aircraft-manufacturing, department-of-defense, mo, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $65.9 million to THE BOEING COMPANY. F/A-18E/F SLM AIRCRAFT
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 $65.9 million.
What is the period of performance?
Start: 2023-05-16. End: 2024-10-18.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. The government should have conducted a price analysis based on historical data, cost estimates, and market research to ensure the pricing is fair and reasonable, even without direct competition.
What are the potential risks associated with the Cost Plus Incentive Fee (CPIF) contract type for this aircraft modification?
CPIF contracts share cost risks and rewards between the government and contractor. While incentivizing efficiency, there's a risk of cost overruns if targets are not met or if the contractor's performance is suboptimal. The government must closely monitor performance and costs to manage these risks effectively and ensure the incentive structure drives desired outcomes.
How does this specific modification (SLM) contribute to the overall effectiveness and operational readiness of the F/A-18E/F fleet?
The Specific Line Maintenance (SLM) modification likely addresses critical upgrades, repairs, or enhancements necessary to maintain the operational readiness and effectiveness of the F/A-18E/F Super Hornet fleet. Understanding the technical scope of SLM would clarify its impact on avionics, structural integrity, or mission capabilities, ensuring the aircraft remain a viable asset.
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 INCENTIVE FEE (V)
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: $65,933,230
Exercised Options: $65,933,230
Current Obligation: $65,933,230
Subaward Activity
Number of Subawards: 5
Total Subaward Amount: $5,009,683
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
Start Date: 2023-05-16
Current End Date: 2024-10-18
Potential End Date: 2024-10-18 00:00:00
Last Modified: 2024-12-17
More Contracts from THE Boeing Company
- KC-X Modernization Program — $32.0B (Department of Defense)
- International Space Station — $22.4B (National Aeronautics and Space Administration)
- 200112!000108!9700!ZD60 !ballistic Missile Defense ORG. !HQ000601C0001 !A!N!*!N! !20001222!20080930!848025649!848025649!009256819!n!the Boeing Company !3370 E Miraloma AVE !anaheim !ca!92806!37000!089!01!huntsville !madison !alabama !+000383571022!n!n!000000000000!ad93!rdte/Other Defense-Adv Tech DEV !S1 !services !1caa!ballistic Missile Defense SYS !541710!*!*!3! ! ! !*!*!*!B!*!*!A! !A !U!R!2!001!B! !Z!Y!Z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! — $18.8B (Department of Defense)
- USN P-8A FRP II Long Lead Material — $18.1B (Department of Defense)
- 200512!010860!2100!w56hzv!tacom - Warren !w56hzv05c0724 !A!N! !Y! ! !20050923!20141231!016544780!016544780!009256819!n!the Boeing Company !J S Mcdonnell Blvd !saint Louis !mo!63166!65000!510!29!st. Louis !ST. Louis (city) !missouri !+000219245691!n!n!000000000000!az15!rdte/Other Research&development-Eng/Manuf Devel !S1 !services !301 !FCS !541330!E! !1! ! ! ! ! !20200930!B! ! !A! !d!u!u!1!001!n!1a!z!y!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! ! TAS::21 2040::TAS — $12.7B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)