Boeing awarded $51.5M for P-8A training systems, a sole-source contract with a 3.5-year duration

Contract Overview

Contract Amount: $51,456,647 ($51.5M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2019-09-11

End Date: 2023-07-31

Contract Duration: 1,419 days

Daily Burn Rate: $36.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: P-8A TRAINING SYSTEMS PCU18

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $51.5 million to THE BOEING COMPANY for work described as: P-8A TRAINING SYSTEMS PCU18 Key points: 1. Contract awarded to a single vendor, raising questions about price competitiveness. 2. The contract duration of over three years suggests a long-term need for these training systems. 3. Fixed-price contract type aims to control costs, but initial award value is substantial. 4. The Department of the Navy is the primary customer, indicating a focus on naval aviation readiness. 5. The specific product code points to specialized training equipment for maritime patrol aircraft. 6. No small business set-aside was utilized, suggesting the prime contractor is a large entity.

Value Assessment

Rating: fair

The contract value of $51.5 million for P-8A training systems appears to be a significant investment. Without comparable sole-source contracts for similar advanced training systems, it is difficult to definitively benchmark value. However, the firm-fixed-price structure suggests an attempt to manage costs. The duration of the contract (over three years) implies a sustained need, and the total value should be assessed against the criticality and complexity of the training provided.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, The Boeing Company, was solicited. This approach bypasses the competitive bidding process, which typically leads to better pricing and innovation. While sole-source awards can be justified for unique capabilities or urgent needs, they inherently limit price discovery and may result in higher costs for the government compared to a competed procurement.

Taxpayer Impact: Sole-source awards mean taxpayers may not be receiving the best possible price, as competition is a key driver for cost savings in government contracting.

Public Impact

Naval aviators and aircrew will benefit from advanced training systems for the P-8A Poseidon aircraft. The services delivered include the provision and likely maintenance of sophisticated training simulators and related equipment. The geographic impact is primarily within the United States, supporting naval aviation training bases. Workforce implications include the need for skilled technicians to operate and maintain the training systems, potentially supporting jobs at Boeing and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source awards can reduce transparency in government spending.
Dependence on a single contractor for critical training systems poses a potential risk.
Contract duration could lead to cost overruns if not closely managed.

Positive Signals

Firm-fixed-price contract type helps to establish cost certainty.
The P-8A is a critical asset for naval operations, making training essential.
The award is to a known prime contractor with experience in defense systems.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on training and simulation systems. The market for defense training systems is characterized by high technological complexity and significant government investment. Companies like Boeing are major players, often securing contracts through sole-source or limited competition due to specialized capabilities. Comparable spending benchmarks would involve looking at other advanced simulation contracts for complex military platforms, which can range from tens to hundreds of millions of dollars.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting plans for small businesses within the provided data. This suggests that the prime contractor, Boeing, is expected to perform the majority of the work. The absence of small business involvement in this specific award means that opportunities for smaller enterprises to contribute to this particular defense training system procurement are limited.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, which obligates the contractor to deliver specified goods or services at an agreed-upon price. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

P-8A Poseidon Aircraft Procurement
Naval Aviation Training Programs
Defense Simulation and Training Systems
Aerospace Manufacturing Contracts

Risk Flags

Sole-source award limits price competition.
Contract duration exceeds three years.
No small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $51.5 million to THE BOEING COMPANY. P-8A TRAINING SYSTEMS PCU18

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 $51.5 million.

What is the period of performance?

Start: 2019-09-11. End: 2023-07-31.

What is the historical spending trend for P-8A training systems by the Department of the Navy?

Analyzing historical spending on P-8A training systems requires access to detailed contract databases beyond the scope of this single award. However, the P-8A Poseidon aircraft itself has been a significant investment for the Navy, with procurement and sustainment costs spanning many years and billions of dollars. Training systems are a critical component of overall platform readiness and lifecycle support. It is reasonable to assume that spending on associated training systems would correlate with aircraft procurement, deployment schedules, and modernization efforts. Without specific historical data for this contract vehicle or similar training system procurements, it's difficult to establish a precise trend, but the ongoing operational need for the P-8A suggests sustained investment in its training infrastructure.

How does the per-unit cost of these training systems compare to similar offerings in the market?

Determining a precise per-unit cost for these P-8A training systems is challenging without knowing the exact number and type of units included in the $51.5 million award. Furthermore, as this was a sole-source contract, direct market comparisons are inherently difficult. The complexity and specificity of training systems for advanced military aircraft like the P-8A often mean they are highly customized and do not have readily available off-the-shelf equivalents. To benchmark value, one would need to identify contracts for similar high-fidelity simulators or training devices for other advanced platforms (e.g., fighter jets, bombers, other maritime patrol aircraft) and compare their total values, durations, and the scope of training capabilities provided. Such comparisons would likely reveal that specialized defense training systems command premium pricing due to their unique technological requirements and limited market.

What are the key performance indicators (KPIs) used to measure the success of this training system contract?

Key performance indicators (KPIs) for a contract like this, focused on training systems, would likely revolve around the effectiveness and availability of the training provided. Specific KPIs could include simulator uptime and availability rates (ensuring systems are ready when needed), training throughput (number of personnel trained), fidelity of simulation (how accurately it replicates real-world scenarios), student performance metrics (improvement in pilot/crew skills), and adherence to training schedules. The contract itself may specify certain performance standards or delivery milestones. Success would ultimately be measured by the Navy's ability to achieve its training objectives for P-8A aircrews, contributing to operational readiness and mission effectiveness, with the training systems being a critical enabler.

What is the track record of The Boeing Company in delivering complex defense training systems?

The Boeing Company has a long and extensive track record in developing and delivering complex defense systems, including training and simulation solutions for various military platforms. They are a primary contractor for the P-8A Poseidon aircraft itself, which inherently involves developing associated training capabilities. Boeing has experience with numerous other advanced training systems for fighter jets, bombers, helicopters, and other aircraft for the U.S. military and international partners. Their capabilities often include high-fidelity simulators, virtual reality training environments, and integrated learning management systems. While specific performance details for every contract vary, Boeing is generally recognized as a major, capable provider in this specialized defense sector.

What are the potential risks associated with a sole-source award for critical training systems?

The primary risk associated with a sole-source award for critical training systems is the potential for inflated costs due to the lack of competitive pressure. Without competing bids, the government may pay a premium for the goods or services. Another risk is reduced innovation, as the sole provider may have less incentive to develop cutting-edge solutions compared to a competitive environment. There's also a dependency risk; if the sole contractor faces production issues, financial instability, or decides to exit the market, the government could face significant disruptions in acquiring or maintaining essential training capabilities. Furthermore, sole-source awards can sometimes be perceived as less transparent, potentially raising concerns about fairness and value for taxpayer money.

How does this contract contribute to the overall readiness and capability of the P-8A Poseidon fleet?

This contract is crucial for maintaining and enhancing the operational readiness and capabilities of the P-8A Poseidon fleet. The P-8A is a sophisticated maritime patrol and reconnaissance aircraft, and effective training is paramount for its crews to operate complex systems, execute missions, and respond to dynamic threats. Advanced training systems, such as those likely provided under this contract, allow aircrews to practice a wide range of scenarios, including anti-submarine warfare, anti-surface warfare, intelligence, surveillance, and reconnaissance (ISR) missions, in a safe, cost-effective, and repeatable manner. By ensuring high-quality training, this contract directly supports the Navy's ability to deploy a proficient and capable P-8A fleet, thereby bolstering national security and maritime domain awareness.

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: N6134019R0009

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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: $51,637,865

Exercised Options: $51,456,647

Current Obligation: $51,456,647

Actual Outlays: $11,438,624

Subaward Activity

Number of Subawards: 29

Total Subaward Amount: $28,504,194

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6134019G0002

IDV Type: BOA

Timeline