Navy awards $34M for F/A-18 training system upgrades, a sole-source contract to Boeing

Contract Overview

Contract Amount: $34,070,981 ($34.1M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2018-12-20

End Date: 2024-02-06

Contract Duration: 1,874 days

Daily Burn Rate: $18.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THE PURPOSE OF THIS NEW DELIVERY ORDER UNDER INDEFINITE DELIVERY INDEFINITE QUANTITY (IDIQ) CONTRACT N61340-19-D-0906 IS FOR THE DESIGN, PRODUCTION, INSTALLATION AND TEST OF THE H14 SYSTEM CONFIGURATION SET (SCS)/OPERATIONAL FLIGHT PROGRAM (OFP) CONFIGURATION FOR F/A-18 E/F AND EA-18G TACTICAL OPERATIONAL FLIGHT TRAINERS (TOFTS). ADDITIONALLY, THIS DELIVERY ORDER EFFORT WILL UPGRADE ALL RELEVANT FLEET REPLACEMENT SQUADRONS (FRS) COURSEWARE ELEMENTS TO H14 AS REQUIRED TO SUPPORT SYLLABUS EVENTS. FRS SELF-PACED INTERACTIVE COURSEWARE (ICW) WILL ALSO BE ANALYZED, AND UPGRADED TO SUPPORT FRS SYLLABUS LECTURE EVENTS THAT RELY ON THE ICW AS PREREQUISITES. IN ADDITION, THE F/A-18E/F AND EA-18G INSTRUCTOR-LED LECTURES USED BY THE STRIKE FIGHTER AND ELECTRONIC ATTACK WEAPONS SCHOOLS (SFWSL, SFWSP, AND EAWS) TO SUPPORT STRIKE FIGHTER ADVANCED READINESS PROGRAM (SFARP) AND GROWLER ELECTRONIC WARFARE ADVANCED READINESS PROGRAMS (EWARP) WILL BE UPGRADED TO H14 SCS/OFP.

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $34.1 million to THE BOEING COMPANY for work described as: THE PURPOSE OF THIS NEW DELIVERY ORDER UNDER INDEFINITE DELIVERY INDEFINITE QUANTITY (IDIQ) CONTRACT N61340-19-D-0906 IS FOR THE DESIGN, PRODUCTION, INSTALLATION AND TEST OF THE H14 SYSTEM CONFIGURATION SET (SCS)/OPERATIONAL FLIGHT PROGRAM (OFP) CONFIGURATION FOR F/A-18 E/F AND E… Key points: 1. This contract focuses on critical upgrades to flight training systems for the F/A-18 E/F and EA-18G aircraft. 2. The upgrade includes design, production, installation, and testing of the H14 System Configuration Set (SCS)/Operational Flight Program (OFP). 3. Courseware elements for fleet replacement squadrons will be updated to support syllabus events. 4. The contract also involves analysis and potential upgrades to self-paced interactive courseware. 5. This sole-source award to Boeing highlights a reliance on the original equipment manufacturer for specialized training systems. 6. The firm-fixed-price contract type aims to control costs for the defined scope of work.

Value Assessment

Rating: fair

The total award amount of $34,070,981 for the H14 system configuration set and courseware upgrades appears to be a significant investment. Without specific benchmarks for similar system upgrades or detailed cost breakdowns, it is difficult to definitively assess value for money. However, the sole-source nature of the award suggests limited opportunity for competitive pricing, which could lead to higher costs compared to a competed contract. The duration of the contract (1874 days) also indicates a substantial, long-term effort.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This typically occurs when a specific contractor possesses unique capabilities, intellectual property, or is the original equipment manufacturer essential for maintaining or upgrading complex systems. The lack of competition means that pricing was not subjected to market forces, potentially resulting in a higher price than if multiple vendors had bid.

Taxpayer Impact: For taxpayers, a sole-source award means there was no opportunity to benefit from competitive bidding, which could have driven down the price. The government relied on negotiation with a single provider, and the final price reflects that.

Public Impact

Naval aviators operating F/A-18 E/F and EA-18G aircraft will benefit from updated and more effective training simulations. The services delivered include design, production, installation, and testing of advanced flight training system configurations. The geographic impact is primarily on naval air stations where these training systems are deployed. Workforce implications include specialized technical roles for design, production, and installation, likely within Boeing and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing, potentially increasing costs for taxpayers.
Reliance on a single contractor for critical system upgrades can create vendor lock-in.
Lack of competition may reduce incentives for cost efficiency and innovation from the contractor.

Positive Signals

Award to Boeing, a known entity in aerospace, suggests a level of confidence in their capability to deliver complex systems.
Firm-fixed-price contract type provides cost certainty for the government once the scope is defined.
Upgrades to training systems are crucial for maintaining pilot proficiency and operational readiness.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on simulation and training systems for tactical aircraft. The market for such specialized training equipment is often dominated by a few key players, including original equipment manufacturers like Boeing, who possess the proprietary knowledge and technical expertise. Spending in this area is critical for maintaining pilot proficiency and ensuring the effectiveness of advanced military platforms. Comparable spending benchmarks would likely involve other major defense contractors providing similar simulation and training solutions for fighter jets.

Small Business Impact

The data provided does not indicate any specific small business set-aside provisions or subcontracting requirements for this contract. As a sole-source award to a large prime contractor, the direct impact on small businesses is unclear without further information on Boeing's subcontracting plans. However, large sole-source contracts can sometimes limit opportunities for small businesses that might otherwise compete for portions of the work if it were competed.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a firm-fixed-price contract, the focus of oversight would be on ensuring the contractor meets the defined technical specifications and delivery schedules. Transparency is limited due to the sole-source nature, but contract modifications and performance reports would be subject to internal review. The Inspector General's office for the Department of Defense may also conduct audits or investigations if concerns arise regarding the contract's execution or cost.

Related Government Programs

F/A-18 E/F Super Hornet Program
EA-18G Growler Program
Tactical Operational Flight Trainers (TOFTS)
Naval Aviation Training Systems

Risk Flags

Sole-source award
Potential for cost overruns due to lack of competition
Vendor lock-in risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.1 million to THE BOEING COMPANY. THE PURPOSE OF THIS NEW DELIVERY ORDER UNDER INDEFINITE DELIVERY INDEFINITE QUANTITY (IDIQ) CONTRACT N61340-19-D-0906 IS FOR THE DESIGN, PRODUCTION, INSTALLATION AND TEST OF THE H14 SYSTEM CONFIGURATION SET (SCS)/OPERATIONAL FLIGHT PROGRAM (OFP) CONFIGURATION FOR F/A-18 E/F AND EA-18G TACTICAL OPERATIONAL FLIGHT TRAINERS (TOFTS). ADDITIONALLY, THIS DELIVERY ORDER EFFORT WILL UPGRADE ALL RELEVANT FLEET REPLACEMENT SQUADRONS (FRS) COURSEWARE ELEMENTS TO H14 AS REQUIRED TO SUPPORT SYLLABUS EVENTS.

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 $34.1 million.

What is the period of performance?

Start: 2018-12-20. End: 2024-02-06.

What is the track record of The Boeing Company in delivering similar flight training system upgrades for naval aviation?

The Boeing Company has a long-standing and extensive track record in developing and supporting advanced training systems for military aircraft, including the F/A-18 family. They are the original equipment manufacturer for the F/A-18 E/F and EA-18G, giving them unique expertise in the aircraft's systems and the associated training requirements. Boeing has historically been awarded numerous contracts for simulator development, software upgrades, and courseware creation for these platforms. Their experience includes integrating new operational flight programs, enhancing simulation fidelity, and updating training curricula to match evolving threats and operational tactics. This deep institutional knowledge and established relationship with the Navy position them as a primary, often sole-source, provider for such specialized upgrades.

How does the $34 million cost compare to previous or similar upgrades for F/A-18 training systems?

Directly comparing the $34 million award to previous or similar upgrades is challenging without access to historical contract data for comparable scope and complexity. However, upgrades to sophisticated flight simulation and training systems for advanced fighter jets are inherently expensive due to the intricate hardware, complex software, and specialized courseware involved. The H14 SCS/OFP configuration and courseware updates represent a significant technological advancement. Given that this is a sole-source award to the OEM, the price is likely based on negotiated rates and the estimated cost of development, production, and integration. Without competitive bids, it's difficult to establish a precise market benchmark, but the amount reflects the specialized nature and extensive scope of work required for modern tactical aircraft training systems.

What are the primary risks associated with this sole-source contract for the Navy?

The primary risk associated with this sole-source contract is the potential for inflated costs due to the lack of competitive bidding. The Navy is reliant on Boeing's pricing and negotiation, without the leverage that multiple bidders would provide. Another significant risk is vendor lock-in; the Navy may become overly dependent on Boeing for future upgrades and maintenance, potentially limiting flexibility and increasing long-term costs. There's also a risk of scope creep or schedule delays, which, while common in complex projects, can be harder to mitigate without competitive pressure. Finally, if Boeing faces internal production or supply chain issues, it could directly impact the Navy's training readiness, as there are no immediate alternative suppliers for this specific system.

How effective are these types of training system upgrades in improving pilot performance and mission readiness?

Upgrades to tactical operational flight trainers (TOFTS), including System Configuration Sets (SCS) and Operational Flight Programs (OFP), are crucial for maintaining and enhancing pilot performance and mission readiness. Modern training systems aim to replicate real-world flight conditions, weapon systems, and threat environments with high fidelity. By incorporating the latest software updates (like H14), improved simulation capabilities, and updated courseware, pilots can train on new tactics, procedures, and aircraft functionalities in a safe and cost-effective manner. This allows them to practice complex scenarios, develop decision-making skills, and build proficiency without the risks and costs associated with live flight. Therefore, these upgrades are directly linked to ensuring pilots are well-prepared for operational missions.

What are the historical spending patterns for F/A-18 training systems by the Department of the Navy?

Historical spending patterns for F/A-18 training systems by the Department of the Navy have been substantial and ongoing, reflecting the long service life and continuous evolution of the Super Hornet and Growler platforms. The Navy consistently invests in upgrades to simulators, flight training devices, and courseware to keep pace with aircraft modifications, new technologies, and evolving threat landscapes. These investments are often made through a combination of competitively awarded contracts for new systems or major overhauls, and sole-source contracts to the OEM (Boeing) for software updates, specific component replacements, and integration of new capabilities. Annual spending can fluctuate significantly based on program priorities, budget cycles, and the specific upgrade requirements identified.

Industry Classification

NAICS: Manufacturing › Commercial and Service Industry Machinery Manufacturing › Other Commercial and Service Industry Machinery Manufacturing

Product/Service Code: TRAINING AIDS AND DEVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6134018R0002

Pricing Type: FIRM FIXED PRICE (J)

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: $34,416,305

Exercised Options: $34,070,981

Current Obligation: $34,070,981

Actual Outlays: $7,919,613

Subaward Activity

Number of Subawards: 23

Total Subaward Amount: $18,539,446

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6134019D0906

IDV Type: IDC

Timeline