Navy Awards Boeing $45M for F/A-18E/F Aircraft Production, Facing Limited Competition
Contract Overview
Contract Amount: $44,982,095 ($45.0M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2024-04-16
End Date: 2026-06-30
Contract Duration: 805 days
Daily Burn Rate: $55.9K/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 $45.0 million to THE BOEING COMPANY for work described as: F/A-18E/F OP24 PPP SLM AIRCRAFT Key points: 1. Significant contract value for advanced fighter aircraft production. 2. Sole-source award to Boeing raises concerns about price discovery. 3. Potential for cost overruns due to Cost Plus Incentive Fee contract type. 4. Aircraft Manufacturing sector sees substantial defense spending.
Value Assessment
Rating: questionable
The $44.98 million award for F/A-18E/F aircraft production is difficult to benchmark without detailed cost breakdowns. The Cost Plus Incentive Fee structure suggests potential for costs to exceed initial estimates, especially given the lack of competition.
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 limits price discovery and may result in higher costs for taxpayers compared to a competitive procurement process.
Taxpayer Impact: The lack of competition on this significant contract could lead to suboptimal pricing, impacting taxpayer value.
Public Impact
Ensures continued production of critical naval fighter aircraft. Supports jobs within the aerospace manufacturing sector. Potential for increased defense readiness with updated aircraft.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Incentive Fee contract type
- Lack of transparency in pricing
Positive Signals
- Supports critical defense capabilities
- Long-term production for essential aircraft
Sector Analysis
The Department of the Navy's spending in the Aircraft Manufacturing sector is substantial, reflecting the high cost of advanced military platforms. This award aligns with typical defense procurement patterns for complex aircraft.
Small Business Impact
This contract does not appear to directly benefit small businesses, as it is a sole-source award to a large prime contractor. Subcontracting opportunities for small businesses would depend on Boeing's procurement practices.
Oversight & Accountability
The Department of Defense, specifically the Department of the Navy, is responsible for overseeing this contract. Robust oversight is crucial to manage costs and ensure performance 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 price competition.
- Cost Plus Incentive Fee contract type carries risk of cost overruns.
- Potential for reduced taxpayer value due to lack of competition.
- Limited transparency on total contract cost and performance metrics.
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 $45.0 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 $45.0 million.
What is the period of performance?
Start: 2024-04-16. End: 2026-06-30.
What is the projected total cost for the full production run of F/A-18E/F aircraft under this contract type, and how does it compare to similar historical contracts?
The current award is for $44.98 million, but the total cost for the full production run is not specified. Cost Plus Incentive Fee contracts carry inherent risks of cost growth. A detailed comparison to historical contracts would require access to more granular cost data and contract terms to assess value effectively.
What are the specific risks associated with the Cost Plus Incentive Fee (CPIF) contract type for this aircraft production, and how are they being mitigated?
CPIF contracts incentivize both the contractor and the government to control costs, but they also carry risks of cost overruns if targets are not met or if the incentive structure is not well-defined. Mitigation strategies typically involve stringent oversight, clear performance metrics, and robust negotiation of target costs and fee structures.
How does the lack of competition in this sole-source award impact the government's ability to ensure cost-effectiveness and technological advancement?
Sole-source awards inherently limit price competition, potentially leading to higher costs for the government. While Boeing is a sole provider for certain aspects of the F/A-18, the lack of competition reduces pressure to innovate on cost and may limit the government's leverage in negotiating advanced features or upgrades.
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: $44,982,095
Exercised Options: $44,982,095
Current Obligation: $44,982,095
Subaward Activity
Number of Subawards: 13
Total Subaward Amount: $2,671,278
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: 2024-04-16
Current End Date: 2026-06-30
Potential End Date: 2026-06-30 00:00:00
Last Modified: 2026-01-08
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