Boeing awarded $36.6M for F/A-18 Integrated Product Support, a sole-source contract for critical aircraft maintenance

Contract Overview

Contract Amount: $36,581,732 ($36.6M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2024-01-01

End Date: 2024-09-30

Contract Duration: 273 days

Daily Burn Rate: $134.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: INTEGRATED PRODUCT SUPPORT (IPS) FOR ALL NAVY, MARINE CORPS, AND THE GOVERNMENT OF SPAIN, CANADA, SWITZERLAND, MALAYSIA, KUWAIT, AUSTRALIA, AND FINLAND'S F/A-18A-F AND EA-18G AIRCRAFT.

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $36.6 million to THE BOEING COMPANY for work described as: INTEGRATED PRODUCT SUPPORT (IPS) FOR ALL NAVY, MARINE CORPS, AND THE GOVERNMENT OF SPAIN, CANADA, SWITZERLAND, MALAYSIA, KUWAIT, AUSTRALIA, AND FINLAND'S F/A-18A-F AND EA-18G AIRCRAFT. Key points: 1. Contract focuses on essential product support for a key naval aircraft fleet. 2. Sole-source award raises questions about competitive pricing and value. 3. Long-term support needs for advanced aircraft present inherent risks. 4. Performance context is critical given the strategic importance of the F/A-18. 5. This contract falls within the aerospace manufacturing and defense support sector.

Value Assessment

Rating: questionable

The contract value of $36.6 million for Integrated Product Support (IPS) for F/A-18 aircraft requires careful benchmarking. As a sole-source award to The Boeing Company, direct price comparisons are difficult. However, the duration of 273 days suggests a significant per-diem cost. Without competitive bids, it's challenging to ascertain if the pricing reflects optimal value for money. Further analysis of the specific services rendered and historical support costs for similar platforms would be necessary to definitively assess value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis to The Boeing Company. This indicates that the government determined Boeing to be the only responsible source capable of providing the required integrated product support for the F/A-18 aircraft. The lack of competition means that price discovery through market forces was not utilized, potentially leading to higher costs than if multiple bidders had vied for the contract.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. The government did not benefit from the cost-saving pressures that typically arise in a competitive procurement environment.

Public Impact

The U.S. Navy and Marine Corps benefit from continued operational readiness of their F/A-18 fleets. International partners (Spain, Canada, Switzerland, Malaysia, Kuwait, Australia, Finland) also receive critical support for their F/A-18 aircraft. Services include product support, ensuring the airworthiness and functionality of these advanced aircraft. The contract supports specialized technical expertise and supply chain management within the aerospace defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Dependence on a single contractor for critical product support creates supply chain risks.
The complexity of integrated product support for advanced aircraft can lead to unforeseen cost overruns.

Positive Signals

Contract ensures continued operational readiness for a vital naval aviation platform.
Boeing's established expertise with the F/A-18 platform suggests a high likelihood of effective service delivery.
Support extends to multiple international partners, fostering interoperability and shared defense capabilities.

Sector Analysis

The aerospace and defense sector is characterized by high R&D costs, long product lifecycles, and significant government procurement. Integrated product support, as provided in this contract, is a critical component of maintaining the readiness and operational effectiveness of complex military platforms like the F/A-18. The market for such specialized support is often dominated by the original equipment manufacturers due to proprietary knowledge and technical expertise. Comparable spending benchmarks for F/A-18 support would typically be found within the Department of Defense's overall aviation sustainment budgets.

Small Business Impact

This contract does not appear to include specific small business set-asides. As a sole-source award to a large prime contractor, the primary focus is on the prime's capability. Subcontracting opportunities for small businesses may exist within the execution of this contract, but they are not explicitly mandated by the contract type. The impact on the small business ecosystem is indirect, relying on Boeing's procurement practices.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Navy, specifically the contracting officer and program management office responsible for F/A-18 sustainment. Accountability measures are typically embedded in the contract terms, including performance metrics and delivery schedules. Transparency may be limited due to the sole-source nature, but contract awards are generally reported in federal procurement databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

F/A-18 Super Hornet Sustainment
Naval Aviation Maintenance Programs
Aerospace Product Support Contracts
Defense Contractor Logistics Support
Foreign Military Sales Support

Risk Flags

Sole-source award
Potential for cost overruns
Supply chain dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.6 million to THE BOEING COMPANY. INTEGRATED PRODUCT SUPPORT (IPS) FOR ALL NAVY, MARINE CORPS, AND THE GOVERNMENT OF SPAIN, CANADA, SWITZERLAND, MALAYSIA, KUWAIT, AUSTRALIA, AND FINLAND'S F/A-18A-F AND EA-18G 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 $36.6 million.

What is the period of performance?

Start: 2024-01-01. End: 2024-09-30.

What is Boeing's track record in providing integrated product support for the F/A-18 program?

The Boeing Company has a long-standing and extensive track record in supporting the F/A-18 program, having been the original manufacturer of the aircraft. This includes providing various levels of product support, maintenance, repair, and overhaul services throughout the aircraft's lifecycle. Their deep familiarity with the F/A-18's systems, components, and operational requirements positions them as a primary, and often sole, source for specialized support. Historical performance data, often detailed in past performance evaluations during competitive procurements, would indicate their capabilities and reliability in meeting delivery schedules and technical specifications for similar support contracts.

How does the pricing of this sole-source contract compare to similar F/A-18 support contracts awarded competitively?

Direct price comparison for this sole-source contract is challenging because competitive market forces were not applied. However, analysis can be made by examining historical data for similar F/A-18 Integrated Product Support (IPS) contracts that were awarded competitively. If previous competitive awards for comparable scope and duration show significantly lower total costs or lower per-unit costs for specific support elements, it would suggest that this sole-source award may not represent the best value. Benchmarking against industry standards for aircraft sustainment, adjusted for the specific services and aircraft variant, is also crucial. The absence of competition inherently removes the pressure that drives down prices, making it imperative to scrutinize the cost elements within this award.

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

The primary risks associated with a sole-source award for critical aircraft product support include potential for inflated pricing due to lack of competition, reduced incentive for the contractor to innovate or improve efficiency, and a higher risk of vendor lock-in. Taxpayers may bear a higher cost burden without the benefit of market-driven price reductions. Furthermore, if the sole-source contractor faces financial difficulties or operational disruptions, it could severely impact the availability of essential support, jeopardizing the readiness of the F/A-18 fleet. Dependence on a single entity for critical components and expertise also creates vulnerabilities in the supply chain.

What is the expected program effectiveness given the nature of this contract?

The expected program effectiveness is likely high in terms of service delivery, given that The Boeing Company is the original equipment manufacturer and has extensive experience with the F/A-18 platform. The contract's focus on Integrated Product Support (IPS) directly addresses the sustainment needs required to maintain the operational readiness of the aircraft. Effectiveness will be measured by the contractor's ability to provide timely and accurate technical support, spare parts, and maintenance services as outlined in the contract. While pricing may be a concern due to the sole-source nature, the technical execution is expected to be robust, ensuring the F/A-18 fleets remain mission-capable.

What are the historical spending patterns for F/A-18 product support, and how does this award fit within that trend?

Historical spending on F/A-18 product support has been substantial, reflecting the complexity and operational tempo of the aircraft throughout its service life. This spending typically includes sustainment, upgrades, and maintenance, often awarded through a mix of competitive and sole-source contracts, particularly for specialized support provided by the OEM. This $36.6 million award represents a segment of the ongoing sustainment costs. Without a broader view of the total annual spend on F/A-18 IPS across all contracts, it's difficult to definitively state how this specific award fits into the overall trend. However, it aligns with the consistent need for robust product support to maintain fleet readiness.

Are there any performance metrics or key performance indicators (KPIs) defined in this contract to ensure value for money?

While the provided data does not detail specific performance metrics or KPIs, it is standard practice for such contracts, even sole-source ones, to include clauses related to performance. These typically involve adherence to delivery schedules, quality of services rendered, and technical compliance. For a sole-source award, the government relies heavily on the contractor's established reputation and the terms negotiated. Value for money in this context is often assessed post-award through monitoring delivery timelines, service quality, and comparing actual costs against negotiated rates, rather than through pre-defined competitive benchmarks. Further review of the contract document itself would be necessary to identify explicit KPIs.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

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 JAMES S 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: $36,581,732

Exercised Options: $36,581,732

Current Obligation: $36,581,732

Subaward Activity

Number of Subawards: 21

Total Subaward Amount: $6,720,627

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001921G0006

IDV Type: BOA

Timeline