Boeing awarded $41.8M for F/A-18E/F aircraft production, with contract performance extending into 2027

Contract Overview

Contract Amount: $41,784,522 ($41.8M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2025-09-23

End Date: 2027-05-29

Contract Duration: 613 days

Daily Burn Rate: $68.2K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: F/A-18E/F OP25 LOT6 SLM AIRCRAFT

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $41.8 million to THE BOEING COMPANY for work described as: F/A-18E/F OP25 LOT6 SLM AIRCRAFT Key points: 1. Contract awarded on a cost-plus incentive fee basis, allowing for shared cost savings and potential for increased profit. 2. Sole-source award indicates a lack of competitive bidding, potentially impacting price negotiation. 3. The contract duration of 613 days suggests a focused production effort for a specific lot of aircraft. 4. This award falls under the broader category of aircraft manufacturing, a critical component of defense spending. 5. The contract's value, while significant, needs to be contextualized against the total lifecycle cost of the F/A-18E/F program.

Value Assessment

Rating: fair

The contract's cost-plus incentive fee structure aims to control costs by incentivizing the contractor to stay within budget. However, without a competitive bidding process, it is difficult to benchmark the pricing against market alternatives. The total award value of $41.8 million for a specific lot of aircraft needs to be assessed in relation to the overall program costs and the unit cost of previous or similar lots. Further analysis would require access to detailed cost breakdowns and historical pricing data for the F/A-18E/F program.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one responsible source is available or when there is a compelling justification for not seeking competition. The lack of competition means that the government did not benefit from the price discovery mechanisms inherent in a competitive bidding process, potentially leading to higher costs than if multiple vendors had vied for the contract.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive pressure to drive down prices. The government's negotiating position is weakened without alternative offers.

Public Impact

The primary beneficiaries are the U.S. Navy, which will receive advanced F/A-18E/F Super Hornet aircraft. This contract supports the continued production and modernization of a key naval aviation asset. The contract's impact is primarily within the aerospace manufacturing sector, supporting jobs and supply chains. The delivery of these aircraft enhances the Navy's operational readiness and strategic capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
Cost-plus incentive fee contracts can lead to cost overruns if not managed carefully.
Reliance on a single contractor for critical defense platforms can create supply chain vulnerabilities.

Positive Signals

Contract supports a critical defense platform for the U.S. Navy.
Incentive fee structure aims to align contractor and government cost objectives.
Long-term program support ensures continued operational capability.

Sector Analysis

The aerospace and defense industry is characterized by high barriers to entry, significant R&D investment, and long production cycles. The F/A-18E/F Super Hornet is a mature platform, and this contract represents ongoing production and sustainment efforts within this sector. The market for fighter aircraft is dominated by a few major prime contractors, with extensive supply chains. Spending in this area is driven by national security requirements and technological advancements.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the nature of prime defense contracting for major aircraft platforms, the primary contractor, The Boeing Company, is a large business. Subcontracting opportunities for small businesses may exist within Boeing's supply chain, but this contract itself does not directly allocate funds to small businesses through a set-aside mechanism.

Oversight & Accountability

Oversight for this contract will be provided by the Department of the Navy, likely through its contracting officers and program management teams. The cost-plus incentive fee structure necessitates close monitoring of costs and performance to ensure the government receives value. Transparency may be limited due to the sole-source nature and the proprietary information involved in defense manufacturing. The Inspector General's office within the Department of Defense would have jurisdiction for audits and investigations if any issues arise.

Related Government Programs

F/A-18E/F Super Hornet Program
Naval Aviation Procurement
Defense Aircraft Manufacturing Contracts
Cost-Plus Incentive Fee Contracts

Risk Flags

Sole-source award
Cost-plus contract type

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.8 million to THE BOEING COMPANY. F/A-18E/F OP25 LOT6 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 $41.8 million.

What is the period of performance?

Start: 2025-09-23. End: 2027-05-29.

What is the historical spending trend for the F/A-18E/F program under The Boeing Company?

Historical spending data for the F/A-18E/F program under The Boeing Company reveals a consistent and substantial investment by the Department of Defense over many years. The program has seen numerous contract awards for production, upgrades, and sustainment, reflecting the platform's long service life and critical role in naval aviation. While specific annual spending figures fluctuate based on production lots, modernization phases, and support requirements, the overall trend indicates a significant, multi-billion dollar commitment. For instance, previous lot awards have often been in the hundreds of millions of dollars, encompassing various configurations and quantities of aircraft. Analyzing these historical patterns is crucial for understanding the long-term financial commitment and for benchmarking the current award against previous investments, considering factors like inflation and technological advancements.

How does the unit cost of the F/A-18E/F aircraft in this contract compare to previous lots or similar aircraft programs?

Directly comparing the unit cost for this specific contract (OP25 LOT6 SLM AIRCRAFT) is challenging without access to detailed cost breakdowns and the exact number of aircraft procured under this $41.8 million award. However, the F/A-18E/F Super Hornet is a mature platform, and its unit costs have generally been in the range of $60-80 million in previous years, depending on the specific configuration, lot size, and contract type. Given this is a sole-source award with a cost-plus incentive fee structure, it is plausible that the unit cost might be at the higher end of historical ranges or potentially exceed them if significant program-specific cost drivers are present. Benchmarking against other contemporary fighter aircraft programs would also be necessary for a comprehensive value assessment, though direct comparisons are often complicated by differing capabilities, mission sets, and procurement strategies.

What are the primary risks associated with a sole-source, cost-plus incentive fee contract for aircraft manufacturing?

A sole-source award for aircraft manufacturing presents several key risks. Firstly, the absence of competition significantly weakens the government's negotiating power, potentially leading to inflated prices and reduced value for taxpayer money. The contractor faces less pressure to innovate or optimize production processes to reduce costs. Secondly, the cost-plus incentive fee (CPIF) structure, while designed to share risks and reward efficiency, can still lead to cost overruns if the target costs are set too high or if unforeseen technical challenges arise. The government bears a substantial portion of the costs, and the incentive fee mechanism relies heavily on accurate cost estimation and performance metrics. Finally, sole-source reliance can create dependencies and vulnerabilities in the supply chain, making the program susceptible to disruptions if the single contractor faces production issues or financial instability.

What is the expected impact of this contract on the operational readiness of the U.S. Navy's air wings?

This contract is expected to have a positive impact on the operational readiness of the U.S. Navy's air wings by ensuring the continued production and delivery of F/A-18E/F Super Hornet aircraft. The Super Hornet is a cornerstone of the Navy's carrier-based strike fighter capability, performing a wide range of missions including air superiority, multi-role attack, and reconnaissance. By fulfilling this order, the Navy replenishes its fleet, replaces aging airframes, and maintains the necessary force structure to meet its global commitments. The timely delivery of these aircraft directly contributes to the availability of combat-ready platforms, supporting training, deployment cycles, and overall mission effectiveness. This sustains the Navy's ability to project power and respond to threats.

What are the potential long-term implications of relying on The Boeing Company for this specific lot of F/A-18E/F aircraft?

The long-term implications of relying on The Boeing Company for this lot of F/A-18E/F aircraft are multifaceted. On the positive side, it ensures continuity in production for a proven and critical platform, leveraging Boeing's established expertise and infrastructure. This can lead to predictable delivery schedules and consistent quality. However, the sole-source nature of this award, if it becomes a recurring pattern for future lots, could foster a dependency that limits future competition and potentially increases long-term program costs. It also concentrates risk with a single supplier. Furthermore, the strategic decisions regarding the future of naval aviation, including the balance between the F/A-18E/F, F-35C, and potential next-generation aircraft, will be influenced by the ongoing investments and production capabilities of key contractors like Boeing.

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: $41,784,522

Exercised Options: $41,784,522

Current Obligation: $41,784,522

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $1,636,622

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