Boeing awarded $63.3M for F/A-18E/F Super Hornet sustainment, a sole-source contract for Lot 3
Contract Overview
Contract Amount: $63,272,646 ($63.3M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2024-09-04
End Date: 2026-05-15
Contract Duration: 618 days
Daily Burn Rate: $102.4K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: F/A-18E/F SLM AIRCRAFT OP24 SAT LOT 3
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $63.3 million to THE BOEING COMPANY for work described as: F/A-18E/F SLM AIRCRAFT OP24 SAT LOT 3 Key points: 1. Contract awarded to a single supplier, raising questions about price competitiveness. 2. Sustainment services are critical for maintaining fleet readiness of a key naval aircraft. 3. The contract type (Cost Plus Incentive Fee) allows for shared risk and reward. 4. Long-term sustainment is essential for operational effectiveness and lifecycle management. 5. This award represents a portion of ongoing support for the F/A-18E/F program. 6. The duration of the contract is over 600 days, indicating a significant support period.
Value Assessment
Rating: fair
This contract for F/A-18E/F sustainment is a sole-source award, making direct value-for-money comparisons difficult without access to competitive bids or historical pricing data for similar sustainment efforts. The Cost Plus Incentive Fee (CPIF) structure suggests an attempt to control costs by incentivizing the contractor to meet certain performance targets while sharing cost savings or overruns. However, the absence of competition inherently limits the government's ability to ensure the lowest possible price.
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. Sole-source awards typically occur when only one responsible source can provide the required supplies or services. This could be due to proprietary technology, unique capabilities, or the nature of sustainment for a specific platform where the original manufacturer is the only viable option. The lack of competition means that price discovery through market forces was not utilized.
Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of competitive bidding. While sole-source contracts can be justified for specialized needs, they require robust oversight to ensure fair pricing and prevent cost overruns.
Public Impact
The U.S. Navy benefits from continued operational readiness of its F/A-18E/F Super Hornet fleet. Services include sustainment, maintenance, and support for a critical naval aviation platform. The geographic impact is primarily related to naval aviation bases and operational areas. Workforce implications include skilled technicians and engineers at Boeing facilities supporting the aircraft.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source nature limits competitive pressure on pricing.
- CPIF contract type requires careful monitoring to ensure cost control and incentive effectiveness.
- Reliance on a single contractor for critical sustainment could pose long-term supply chain risks.
Positive Signals
- Boeing is the original equipment manufacturer, possessing unique knowledge of the F/A-18E/F.
- Sustainment is crucial for maintaining the operational readiness of a key defense asset.
- CPIF contract structure can align contractor and government interests towards efficiency.
Sector Analysis
The aerospace and defense sector is characterized by high barriers to entry, complex supply chains, and significant government investment. Sustainment contracts, like this one for the F/A-18E/F, are a substantial part of the defense budget, ensuring the longevity and operational capability of major weapon systems. The market for aircraft sustainment is often dominated by the original equipment manufacturers due to specialized knowledge and technical data.
Small Business Impact
This contract does not appear to have a small business set-aside. As a sole-source award to a large prime contractor, the primary impact on small businesses would be through potential subcontracting opportunities. The extent of small business participation will depend on Boeing's subcontracting plan and the specific requirements of the sustainment services.
Oversight & Accountability
Oversight for this contract will likely be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The CPIF contract type necessitates close monitoring of costs and performance metrics to ensure that incentives are driving desired outcomes and that taxpayer funds are used efficiently. Transparency may be limited due to the sole-source nature and proprietary information.
Related Government Programs
- F/A-18E/F Super Hornet Program
- Naval Aviation Readiness Programs
- Aerospace Defense Sustainment Contracts
- Cost Plus Incentive Fee Contracts
Risk Flags
- Sole-source award
- Potential for cost overruns
- Limited competition
Tags
defense, department-of-defense, navy, aircraft-manufacturing, f-18-super-hornet, sustainment, sole-source, cost-plus-incentive-fee, missouri, large-business, delivery-order
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $63.3 million to THE BOEING COMPANY. F/A-18E/F SLM AIRCRAFT OP24 SAT LOT 3
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 $63.3 million.
What is the period of performance?
Start: 2024-09-04. End: 2026-05-15.
What is the historical spending trend for F/A-18E/F sustainment services?
Analyzing historical spending for F/A-18E/F sustainment requires access to detailed contract databases and budget reports. Typically, sustainment costs for major platforms like the Super Hornet represent a significant portion of the total lifecycle cost. These costs can fluctuate based on fleet size, operational tempo, aging aircraft issues, and upgrades. Without specific historical data for this Lot 3 award, it's difficult to provide precise figures, but sustainment spending is generally a consistent and substantial line item in the Navy's budget, often spanning billions of dollars over the life of the platform. Trends may show increases due to aging components or decreases due to efficiency improvements or fleet reductions.
How does the Cost Plus Incentive Fee (CPIF) structure typically function in defense contracts?
A Cost Plus Incentive Fee (CPIF) contract is a type of cost-reimbursement contract where the contractor is reimbursed for allowable costs and also receives a fee that is adjusted based on the contractor's performance relative to predetermined targets. In this case, the targets likely relate to cost, schedule, or performance metrics for the F/A-18E/F sustainment. If the contractor meets or exceeds these targets, the fee increases, potentially up to a ceiling. Conversely, if performance falls short, the fee is reduced. This structure aims to incentivize the contractor to control costs and achieve specific objectives, sharing the risk and reward between the government and the contractor. Effective implementation requires clear target setting and robust performance measurement.
What are the risks associated with a sole-source sustainment contract for a major defense platform?
Sole-source sustainment contracts for major defense platforms like the F/A-18E/F carry several risks. The primary risk is the potential for higher costs due to the lack of competitive pressure. Without competing bids, the government may pay more than it would in a competitive environment. Another risk is contractor complacency, where the incumbent may have less incentive to innovate or improve efficiency. Furthermore, reliance on a single supplier can create vulnerabilities in the supply chain and increase dependence on that contractor's financial stability and strategic decisions. This can also limit the government's flexibility in seeking alternative solutions or providers if issues arise.
What is the significance of sustainment for the F/A-18E/F Super Hornet fleet's operational readiness?
Sustainment is absolutely critical for the operational readiness of the F/A-18E/F Super Hornet fleet. These services encompass maintenance, repair, overhaul, and logistics support necessary to keep the aircraft flying and mission-capable. A well-executed sustainment program ensures that the fleet meets deployment schedules, maintains its combat effectiveness, and operates safely. Without adequate sustainment, aircraft availability would decline, leading to reduced training opportunities, mission cancellations, and potential degradation of the Navy's power projection capabilities. The F/A-18E/F is a cornerstone of naval aviation, and its readiness directly impacts national security.
What is the typical role of the original equipment manufacturer (OEM) in aircraft sustainment?
The Original Equipment Manufacturer (OEM), such as Boeing for the F/A-18E/F, typically plays a central role in aircraft sustainment. OEMs possess unique design knowledge, technical data, manufacturing expertise, and proprietary tooling essential for maintaining complex aircraft. They often hold the intellectual property rights for critical components and systems. Consequently, OEMs are frequently the sole or primary source for specialized maintenance, repair, and overhaul services, as well as for the supply of spare parts. While third-party providers can sometimes offer sustainment services, the OEM's involvement is often indispensable, especially for ensuring warranty compliance, managing technical directives, and maintaining the highest levels of airworthiness.
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: $63,272,646
Exercised Options: $63,272,646
Current Obligation: $63,272,646
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $3,768,084
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: 2026-05-15
Potential End Date: 2026-05-15 00:00:00
Last Modified: 2025-04-26
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