Boeing Awarded $50.1M for F/A-18E/F Aircraft Production Amidst Limited Competition Concerns
Contract Overview
Contract Amount: $50,148,496 ($50.1M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2024-09-04
End Date: 2026-01-22
Contract Duration: 505 days
Daily Burn Rate: $99.3K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: F/A-18E/F OP24 LOT 2 SAT & SLT SLM AIRCRAFT
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $50.1 million to THE BOEING COMPANY for work described as: F/A-18E/F OP24 LOT 2 SAT & SLT SLM AIRCRAFT Key points: 1. The contract is for the production of F/A-18E/F Super Hornet and Growler aircraft. 2. Boeing is the sole provider for this specific aircraft variant, limiting competition. 3. The contract type is Cost Plus Incentive Fee, which can lead to cost overruns. 4. This spending falls within the broader Defense sector, specifically aircraft manufacturing.
Value Assessment
Rating: fair
The contract value of $50.1M for 505 days of work appears reasonable for specialized military aircraft production. However, without detailed cost breakdowns and comparisons to similar sole-source contracts, a definitive value assessment is challenging.
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 lack of competition limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The absence of competition in this sole-source award may result in higher prices than if multiple bidders were involved, impacting taxpayer funds.
Public Impact
Ensures continued production of critical naval strike fighter aircraft. Supports jobs within the aerospace manufacturing sector, particularly in Missouri. Potential for increased costs due to lack of competitive bidding. Impacts the readiness and modernization of the U.S. Navy's air fleet.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price negotiation.
- Cost Plus Incentive Fee contract type carries inherent cost overrun risk.
- Lack of transparency in pricing due to non-competitive nature.
Positive Signals
- Ensures production of vital defense assets.
- Supports a key defense contractor and associated jobs.
Sector Analysis
This contract falls under the Defense sector, specifically Aircraft Manufacturing. The U.S. government is a major consumer of aircraft, with significant spending allocated to both military and civilian aviation needs. Benchmarks for similar sole-source military aircraft contracts are often high due to specialized requirements and limited manufacturers.
Small Business Impact
This contract was awarded directly to The Boeing Company and does not indicate any subcontracting opportunities for small businesses within the provided data. Further analysis would be needed to determine if small business participation is mandated or likely.
Oversight & Accountability
The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. The 'NOT COMPETED' status suggests a need for robust oversight to ensure fair pricing and performance, especially given the sole-source nature.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award
- Cost Plus Incentive Fee contract type
- Potential for inflated pricing due to lack of competition
- Limited transparency on cost justification
- No indication of small business participation
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 $50.1 million to THE BOEING COMPANY. F/A-18E/F OP24 LOT 2 SAT & SLT 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 (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $50.1 million.
What is the period of performance?
Start: 2024-09-04. End: 2026-01-22.
What is the justification for this contract being sole-sourced, and what steps are taken to ensure fair and reasonable pricing?
The justification for sole-sourcing typically involves unique capabilities, proprietary technology, or the inability of other firms to meet the specific requirements within the necessary timeframe. To ensure fair and reasonable pricing, the contracting agency likely conducts a thorough price analysis, comparing proposed costs to historical data, other government contracts, or commercial prices where applicable. Independent cost estimates and negotiations are also crucial components of this process.
What are the potential cost implications of the Cost Plus Incentive Fee (CPIF) contract type for this aircraft production?
A CPIF contract incentivizes both the contractor and the government to control costs. The contractor is reimbursed for allowable costs plus a fee that is adjusted based on performance against target cost and target profit. If costs are below target, the contractor's fee increases, and the government's share of savings is realized. Conversely, if costs exceed the target, the contractor's fee decreases, and the government's share of cost overruns is limited. This structure aims to balance risk and reward.
How does the lack of competition for this specific F/A-18E/F variant impact the long-term affordability of the Navy's fleet modernization plans?
The lack of competition for this sole-source contract means the Navy pays Boeing's proposed price without the downward pressure that competitive bidding would provide. Over the long term, this can lead to higher acquisition costs for the F/A-18E/F fleet, potentially straining the Navy's budget. This could necessitate difficult trade-offs, such as acquiring fewer aircraft or delaying other modernization programs to accommodate the higher per-unit costs.
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: $50,148,496
Exercised Options: $50,148,496
Current Obligation: $50,148,496
Subaward Activity
Number of Subawards: 2
Total Subaward Amount: $4,086,828
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: 2024-09-04
Current End Date: 2026-01-22
Potential End Date: 2026-01-22 00:00:00
Last Modified: 2025-03-13
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