Boeing awarded $28.8M follow-on contract for P-8A Poseidon logistics support by the Navy

Contract Overview

Contract Amount: $28,825,019 ($28.8M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2024-09-15

End Date: 2025-09-14

Contract Duration: 364 days

Daily Burn Rate: $79.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: P-8A INTEGRATED LOGISTICS SUPPORT (ILS) FOLLOW-ON SUSTAINMENT.

Place of Performance

Location: TUKWILA, KING County, WASHINGTON, 98108

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $28.8 million to THE BOEING COMPANY for work described as: P-8A INTEGRATED LOGISTICS SUPPORT (ILS) FOLLOW-ON SUSTAINMENT. Key points: 1. This contract represents continued investment in sustainment for a critical naval aviation platform. 2. The sole-source nature of this award warrants scrutiny regarding potential price escalations. 3. Performance history of Boeing on similar sustainment contracts will be a key indicator of value. 4. The P-8A Poseidon is a vital asset for maritime patrol and reconnaissance missions. 5. Sustainment spending is crucial for maintaining the operational readiness of the P-8A fleet.

Value Assessment

Rating: fair

The contract value of $28.8 million for a one-year sustainment period for the P-8A ILS appears reasonable on its face, but without detailed cost breakdowns or comparisons to previous years' sustainment costs, a definitive value-for-money assessment is difficult. Given the sole-source nature, there's a risk of inflated pricing compared to a competitive environment. Benchmarking against sustainment contracts for similar large military aircraft would provide better context.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating that the Department of the Navy determined only The Boeing Company could provide the necessary integrated logistics support for the P-8A aircraft. This approach bypasses the competitive bidding process, which typically drives down costs and encourages innovation. The lack of competition here means taxpayers do not benefit from potential cost savings that a multi-bidder scenario might yield.

Taxpayer Impact: The absence of competition means taxpayers are likely paying a premium, as there was no pressure on Boeing to offer its lowest possible price. This also limits opportunities for other companies to demonstrate their capabilities in supporting this critical platform.

Public Impact

The primary beneficiaries are the U.S. Navy's P-8A Poseidon fleet, ensuring operational readiness. Services delivered include integrated logistics support, crucial for maintaining aircraft availability. The geographic impact is national, supporting naval aviation operations across various theaters. Workforce implications include continued employment for personnel involved in logistics and sustainment at Boeing and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and may lead to higher costs for taxpayers.
Lack of transparency in cost build-up due to sole-source nature.
Dependence on a single contractor for critical logistics support can create long-term risks.

Positive Signals

Ensures continued operational readiness of the vital P-8A Poseidon fleet.
Leverages Boeing's established expertise and intimate knowledge of the P-8A platform.
Provides stability and predictability in sustainment planning for the Navy.

Sector Analysis

The P-8A Poseidon is a key platform in the defense sector, specifically within military aircraft manufacturing and support. The market for specialized military aircraft sustainment is often dominated by the original equipment manufacturers due to proprietary knowledge and complex systems integration. Boeing, as the prime contractor for the P-8A, holds a unique position in this niche. Comparable spending benchmarks would involve looking at sustainment contracts for other large, complex military platforms like the F-35 or C-17.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false and 'sb': false. While Boeing is the prime contractor, there may be subcontracting opportunities for small businesses within the broader logistics and support chain. However, the primary award is to a large corporation, and the direct impact on the small business ecosystem is likely indirect unless specific subcontracting plans are mandated and monitored.

Oversight & Accountability

Oversight for this contract will likely fall under the Department of the Navy's contracting and program management offices. Accountability measures are typically embedded in the contract terms, including performance metrics and reporting requirements. Transparency may be limited due to the sole-source nature and the proprietary information involved in logistics support. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

P-8A Poseidon Aircraft Program
Naval Aviation Sustainment Programs
Defense Logistics Support Contracts
Aircraft Engine and Engine Parts Manufacturing

Risk Flags

Sole-source award
Potential for cost overruns
Lack of competitive benchmarking

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.8 million to THE BOEING COMPANY. P-8A INTEGRATED LOGISTICS SUPPORT (ILS) FOLLOW-ON SUSTAINMENT.

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 $28.8 million.

What is the period of performance?

Start: 2024-09-15. End: 2025-09-14.

What is Boeing's track record with P-8A sustainment and similar logistics contracts?

The Boeing Company has been the prime contractor for the P-8A Poseidon since its inception, including its development and production. Their track record with P-8A sustainment is therefore extensive, as they possess deep institutional knowledge of the aircraft's systems and maintenance requirements. Historically, Boeing has managed complex logistics support for numerous military aircraft programs, often involving global supply chains and extensive technical support. While specific performance metrics for this follow-on contract are not publicly detailed, their long-standing relationship with the Navy and their role as the original equipment manufacturer suggest a capability to fulfill the requirements. However, past performance reviews and any incurred costs or delays on previous P-8A sustainment efforts would provide a more nuanced understanding of their effectiveness and efficiency in this specific role.

How does the $28.8 million cost compare to previous years' P-8A sustainment spending?

Direct comparison of the $28.8 million figure to previous years' spending on P-8A Integrated Logistics Support (ILS) is challenging without access to historical contract data. This figure represents a single delivery order for a 364-day period, suggesting it's part of a larger, potentially multi-year sustainment effort. Annual sustainment costs for complex military platforms can fluctuate based on operational tempo, parts availability, and emergent maintenance needs. To benchmark this value, one would need to examine the total obligated amounts for ILS across previous fiscal years for the P-8A program, as well as the specific services included in each year's contract. The 'br': 79190 value provided might represent a benchmark or a previous contract value, but its context is unclear without further data. A comprehensive analysis would require trend data to identify any significant deviations or escalations in sustainment costs.

What are the primary risks associated with a sole-source sustainment contract for the P-8A?

The primary risk associated with this sole-source award is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, The Boeing Company may not have the same incentive to minimize costs as they would in a competitive environment, potentially leading to higher expenditures for the Department of the Navy. Another significant risk is contractor lock-in; the Navy becomes heavily reliant on Boeing for critical logistics support, making it difficult and costly to switch providers in the future, even if performance or pricing becomes unsatisfactory. Furthermore, sole-source contracts can sometimes lead to less transparency in cost accounting, making it harder for the government to verify the reasonableness of charges. Finally, there's a risk that innovation in sustainment practices might be stifled, as the incumbent contractor may have less motivation to invest in developing more efficient or cost-effective support methods.

How does the P-8A's role in naval operations influence sustainment requirements and spending?

The P-8A Poseidon is a multi-mission maritime aircraft critical for intelligence, surveillance, reconnaissance (ISR), anti-submarine warfare (ASW), and anti-surface warfare (ASUW). Its extensive operational deployment tempo, often in demanding environments, directly influences sustainment requirements. High operational tempo necessitates robust and continuous logistics support to ensure aircraft availability and mission readiness. This includes timely maintenance, repair, and overhaul of complex systems, as well as the availability of spare parts. Consequently, the P-8A's vital role translates into significant and ongoing sustainment spending. The need for the aircraft to be ready for rapid deployment in various global theaters means that the Navy prioritizes maintaining its operational capability, making sustainment a non-negotiable and substantial part of the overall program budget.

What is the typical contract type for P-8A sustainment, and what are the implications of this 'COST PLUS FIXED FEE' award?

The contract type for this specific award is 'COST PLUS FIXED FEE' (CPFF). This type of contract is often used when the costs are difficult to estimate precisely, as is common in complex logistics and support services. Under a CPFF contract, the contractor (Boeing) is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. The 'fixed fee' portion is negotiated upfront and does not change unless the contract scope is formally modified. The implications for the government are that it bears the risk of cost overruns, as all allowable costs are reimbursed. However, the fixed fee provides the contractor with a defined profit margin. For sustainment services, CPFF can incentivize the contractor to perform the work efficiently to manage costs, as their profit is fixed regardless of the total cost incurred. It requires diligent government oversight to ensure costs are allowable and reasonable.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

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: $33,280,485

Exercised Options: $28,826,598

Current Obligation: $28,825,019

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $301,007

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