Boeing awarded $36.8M for F/A-18E/F aircraft sustainment, a sole-source contract

Contract Overview

Contract Amount: $36,853,687 ($36.9M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2024-08-20

End Date: 2026-06-30

Contract Duration: 679 days

Daily Burn Rate: $54.3K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: F/A-18E/F OP24 PPP SLM AIRCRAFT

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $36.9 million to THE BOEING COMPANY for work described as: F/A-18E/F OP24 PPP SLM AIRCRAFT Key points: 1. Contract awarded to The Boeing Company for sustainment of F/A-18E/F aircraft. 2. This is a sole-source award, raising questions about price competition. 3. The contract duration is 679 days, ending in June 2026. 4. The contract type is Cost Plus Incentive Fee (CPIF), which can incentivize cost control. 5. The award is a delivery order under an existing contract. 6. The specific product service code (PSC) is not provided, limiting detailed analysis. 7. The contract is managed by the Department of the Navy.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without comparable sole-source sustainment contracts for the F/A-18E/F. The Cost Plus Incentive Fee (CPIF) structure aims to align contractor and government interests in managing costs, but the absence of competition inherently limits the government's ability to secure the lowest possible price. Further analysis would require detailed cost breakdowns and performance history of the contractor on similar sustainment efforts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to The Boeing Company. This approach is typically used when only one source can provide the required goods or services, often due to proprietary technology, unique capabilities, or existing platform sustainment responsibilities. The lack of competition means that price discovery through market forces was not utilized, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive bidding. Without competing offers, the government cannot be assured it is receiving the best possible price for these critical aircraft sustainment services.

Public Impact

The primary beneficiaries are the U.S. Navy and Marine Corps, who rely on the F/A-18E/F for tactical aviation capabilities. Services delivered include sustainment activities crucial for maintaining the operational readiness of the F/A-18E/F fleet. The geographic impact is primarily within the United States, supporting naval aviation bases and operations. Workforce implications include the continued employment of skilled personnel at Boeing facilities involved in aircraft sustainment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
CPIF contract type requires careful monitoring to ensure cost efficiency.
Lack of detailed PSC hinders granular performance analysis.
Contract duration of nearly two years necessitates ongoing oversight.

Positive Signals

Awarded to the original equipment manufacturer, ensuring specialized knowledge for sustainment.
CPIF structure includes incentives for cost control.
Delivery order under an existing contract suggests a pre-established relationship and framework.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and long product lifecycles. Sustainment contracts, like this one for the F/A-18E/F, are critical for maintaining the operational readiness of complex military platforms. Spending in this area is substantial, with governments often relying on original equipment manufacturers (OEMs) for specialized support due to the intricate nature of the systems. Comparable spending benchmarks are difficult to establish precisely due to the proprietary nature of sustainment services and the unique configurations of military aircraft.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor is The Boeing Company, a large aerospace firm. While Boeing may utilize small businesses in its supply chain for sustainment activities, this specific award does not directly benefit small businesses through a set-aside. The subcontracting opportunities for small businesses would depend on Boeing's internal procurement practices and the specific needs of the sustainment effort.

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, scrutiny on cost reasonableness and performance is particularly important. The CPIF structure includes specific incentive targets that require monitoring. Transparency may be limited due to the sole-source nature, but contract performance reports and financial reviews are standard oversight mechanisms. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

F/A-18E/F Super Hornet Program
Naval Aviation Readiness Programs
Aircraft Depot Maintenance Contracts
Aerospace Component Sustainment

Risk Flags

Sole-source award
Potential for cost overruns in CPIF contracts
Limited transparency due to sole-source nature

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.9 million to THE BOEING COMPANY. F/A-18E/F OP24 PPP 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 $36.9 million.

What is the period of performance?

Start: 2024-08-20. End: 2026-06-30.

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

Analyzing historical spending for F/A-18E/F sustainment requires accessing detailed contract data over multiple fiscal years. Typically, sustainment costs for major weapon systems like the Super Hornet represent a significant portion of the total lifecycle cost. These costs can fluctuate based on operational tempo, fleet size, aging of the aircraft, and the specific sustainment strategies employed (e.g., organic depot maintenance vs. contractor logistics support). Without specific historical data for this contract vehicle or similar ones, it's difficult to provide precise figures. However, it is common for sustainment costs to increase as aircraft age and require more extensive repairs and component replacements. The Department of the Navy aims to balance readiness requirements with budgetary constraints, often leading to complex contract structures and negotiations to manage these long-term costs.

How does the Cost Plus Incentive Fee (CPIF) structure typically perform in aircraft sustainment contracts?

The Cost Plus Incentive Fee (CPIF) contract type is designed to encourage cost control by establishing a target cost, a target profit, and a sharing formula for savings or overruns. In aircraft sustainment, this means the contractor (Boeing) is incentivized to perform the work within the target cost. If costs are lower than the target, both the government and the contractor share in the savings, with the contractor earning a higher profit. Conversely, if costs exceed the target, the contractor's profit is reduced, and they may even absorb some of the overrun. The effectiveness of CPIF hinges on the accuracy of the initial cost targets and the clarity of the performance metrics. For sustainment, it can be effective if well-defined metrics for availability, reliability, or turnaround time are tied to the incentive fee, alongside cost targets.

What are the risks associated with sole-source sustainment contracts for major defense platforms?

Sole-source sustainment contracts for major defense platforms like the F/A-18E/F carry several inherent risks. The most significant is the lack of price competition, which can lead to inflated costs as the government cannot leverage market forces to secure the best value. This can result in taxpayers paying more than necessary for essential services. Another risk is vendor lock-in; the original equipment manufacturer (OEM) may become the only viable source for parts, technical data, and expertise, reducing the government's flexibility and bargaining power over time. This can also stifle innovation, as there is less incentive for the sole-source provider to develop more cost-effective sustainment methods if they are guaranteed the business. Furthermore, reliance on a single provider can create supply chain vulnerabilities if that provider experiences financial difficulties or production issues.

What is The Boeing Company's track record in F/A-18 sustainment?

The Boeing Company has a long-standing track record as the prime contractor and manufacturer of the F/A-18 family of aircraft, including the E/F variants. As such, they possess unique technical knowledge, proprietary data, and manufacturing capabilities essential for the aircraft's sustainment. Their performance history in sustainment contracts is extensive, encompassing various aspects from component repair to full-system support. While specific performance metrics for individual contracts are often sensitive or not publicly disclosed, Boeing generally holds significant contracts for the sustainment of naval aviation platforms. Evaluating their track record involves reviewing past performance evaluations, delivery order completion rates, and any documented issues related to cost overruns or schedule delays on similar contracts. Given their OEM status, they are typically the default provider for complex sustainment needs.

How does the $36.8M award compare to the overall F/A-18E/F sustainment budget?

The $36.8 million award represents a specific delivery order for sustainment activities related to the F/A-18E/F aircraft, scheduled to be completed by June 2026. To compare this to the overall sustainment budget, one would need to know the total annual or multi-year budget allocated by the Department of the Navy for F/A-18E/F sustainment. The total budget encompasses all contracts, organic depot maintenance, spare parts procurement, and personnel costs associated with keeping the fleet operational. This $36.8 million is likely a component of a larger, overarching sustainment program. Without access to the Navy's comprehensive F/A-18E/F sustainment budget figures, it's impossible to determine the precise percentage this award represents. However, sustainment for major combat aircraft fleets typically runs into hundreds of millions, if not billions, of dollars annually across all contract types and internal resources.

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: $36,853,687

Exercised Options: $36,853,687

Current Obligation: $36,853,687

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $1,026,272

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