Boeing awarded $186.5M for P-8 aircrew training device upgrades, impacting fleet readiness

Contract Overview

Contract Amount: $186,508,976 ($186.5M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2023-08-04

End Date: 2028-07-27

Contract Duration: 1,819 days

Daily Burn Rate: $102.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: INCREMENT 3 BLOCK 2 ENGINEERING MANUFACTURING DEVELOPMENT (EMD) FLEET RELEASE 300 UPGRADES TO THE P-8 AIRCREW TRAINING DEVICES AT JACKSONVILLE, FL WHIDBEY ISLAND, WA AND DEVELOPMENTAL DEVICES AT CONTRACTOR FACILITIES AT ST. LOUIS, MO.

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $186.5 million to THE BOEING COMPANY for work described as: INCREMENT 3 BLOCK 2 ENGINEERING MANUFACTURING DEVELOPMENT (EMD) FLEET RELEASE 300 UPGRADES TO THE P-8 AIRCREW TRAINING DEVICES AT JACKSONVILLE, FL WHIDBEY ISLAND, WA AND DEVELOPMENTAL DEVICES AT CONTRACTOR FACILITIES AT ST. LOUIS, MO. Key points: 1. Contract focuses on enhancing P-8 aircrew training capabilities across multiple locations. 2. The award is a Cost Plus Fixed Fee type, indicating shared risk between government and contractor. 3. Sole-source award suggests potential lack of market competition or specialized capabilities. 4. Long duration of nearly 5 years implies significant development and integration effort. 5. The contract supports critical fleet readiness and operational effectiveness for the P-8 Poseidon. 6. Focus on training devices suggests investment in personnel proficiency and safety.

Value Assessment

Rating: fair

Benchmarking the value of this Cost Plus Fixed Fee contract is challenging without detailed cost breakdowns. The fixed fee component provides some cost control, but the "cost plus" nature inherently carries risk of cost overruns. Comparison to similar training device upgrades is difficult due to the specialized nature of P-8 systems. The total value of $186.5 million over nearly five years suggests a substantial investment in maintaining and improving aircrew proficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of the Navy did not solicit bids from multiple potential contractors. This approach is typically used when a single source possesses unique capabilities, proprietary technology, or when urgency precludes a competitive process. The lack of competition means that pricing and value were not tested against market alternatives, potentially leading to higher costs than if multiple bids had been received.

Taxpayer Impact: Taxpayers may not have received the benefit of competitive pricing, potentially paying more than necessary for these training device upgrades.

Public Impact

US Navy aircrews operating the P-8 Poseidon aircraft will benefit from enhanced training. Services delivered include upgrades to aircrew training devices, improving simulation fidelity and realism. Geographic impact includes Jacksonville, FL; Whidbey Island, WA; and contractor facilities in St. Louis, MO. Workforce implications include sustainment of specialized engineering and manufacturing jobs at Boeing facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential for cost savings.
Cost-plus contract type can lead to cost overruns if not managed tightly.
Long contract duration increases exposure to potential scope creep or changing requirements.

Positive Signals

Focus on training devices directly supports aircrew readiness and mission effectiveness.
Upgrades to critical training infrastructure ensure continued operational capability.
Investment in advanced training technology can lead to improved pilot skills and safety.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on training and simulation systems. The market for advanced military training solutions is highly specialized, often dominated by large prime contractors like Boeing due to the complexity and integration requirements. Spending in this area is driven by the need to maintain a highly skilled military workforce and ensure operational readiness for sophisticated platforms like the P-8. Comparable spending benchmarks would likely involve other major platform training system development and sustainment contracts.

Small Business Impact

This contract was not set aside for small businesses and was awarded to a large prime contractor, The Boeing Company. There is no explicit information regarding small business subcontracting plans within the provided data. The impact on the small business ecosystem is likely indirect, potentially through Boeing's own supply chain, but direct set-aside opportunities are absent.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Navy, likely through contracting officers and program management personnel. Accountability measures are embedded within the Cost Plus Fixed Fee structure, requiring detailed cost reporting and justification. Transparency is facilitated through contract award databases, though specific performance metrics and cost details may be sensitive. The Inspector General for the Department of Defense would have jurisdiction for audits and investigations.

Related Government Programs

P-8 Poseidon Program
Naval Air Systems Command (NAVAIR) Training Systems
Aircrew Simulation and Training Contracts
Defense Training and Simulation Market

Risk Flags

Sole-source award
Cost-plus contract type
Potential for cost overruns
Lack of competitive pricing pressure

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $186.5 million to THE BOEING COMPANY. INCREMENT 3 BLOCK 2 ENGINEERING MANUFACTURING DEVELOPMENT (EMD) FLEET RELEASE 300 UPGRADES TO THE P-8 AIRCREW TRAINING DEVICES AT JACKSONVILLE, FL WHIDBEY ISLAND, WA AND DEVELOPMENTAL DEVICES AT CONTRACTOR FACILITIES AT ST. LOUIS, MO.

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 $186.5 million.

What is the period of performance?

Start: 2023-08-04. End: 2028-07-27.

What is Boeing's track record with P-8 training systems and similar defense contracts?

The Boeing Company has a long-standing relationship with the P-8 Poseidon program, having served as the prime contractor for the aircraft itself. This includes experience in developing and integrating various systems, including training and simulation components. Boeing has a substantial history of delivering complex defense systems and training solutions for various military platforms. Their track record includes both successes and challenges common in large-scale defense acquisition programs, such as managing cost and schedule on complex development efforts. Specific performance on prior P-8 training device contracts would be a key indicator, though detailed public data on those specific contracts is often limited.

How does the $186.5 million value compare to similar aircrew training device upgrades?

Direct comparisons for the $186.5 million value are difficult without knowing the specific scope and complexity of the upgrades. However, for advanced military platforms, the cost of developing, manufacturing, and sustaining sophisticated training devices can be substantial. Contracts for full-mission simulators, part-task trainers, and integrated training systems for comparable aircraft (e.g., other maritime patrol aircraft, large transport, or fighter jets) can range from tens to hundreds of millions of dollars over their lifecycle. The "Cost Plus Fixed Fee" structure also means the government pays for actual costs plus a negotiated profit, making direct value comparisons to fixed-price contracts less straightforward. The duration of nearly five years suggests a comprehensive upgrade effort rather than a minor refresh.

What are the primary risks associated with this sole-source Cost Plus Fixed Fee contract?

The primary risks associated with this sole-source Cost Plus Fixed Fee (CPFF) contract are twofold. Firstly, the sole-source nature means the government did not benefit from competitive bidding, potentially leading to a higher price than could have been achieved in a competitive environment. There's a risk that the contractor's pricing is not optimized against market alternatives. Secondly, the CPFF structure, while sharing risk, places the onus on the government to pay for all allowable costs incurred by the contractor, plus a fixed fee. This creates a risk of cost growth if the contractor's cost management is weak or if unforeseen technical challenges arise, driving up the "cost" portion of the contract. Effective government oversight is crucial to mitigate these risks.

How effective are aircrew training devices in maintaining P-8 operational readiness?

Aircrew training devices, such as simulators and virtual reality systems, are critically important for maintaining P-8 operational readiness. They provide a safe, cost-effective, and repeatable environment for pilots, sensor operators, and other crew members to practice complex mission scenarios, emergency procedures, and routine operations without expending flight hours or risking expensive aircraft. High-fidelity simulators allow crews to train for threats and environments that may be difficult or impossible to replicate in live training. Regular upgrades to these devices ensure they remain representative of the actual aircraft systems and evolving threats, thereby directly contributing to the proficiency and effectiveness of P-8 crews.

What has been the historical spending trend for P-8 training systems?

Historical spending on P-8 training systems has likely been significant, reflecting the platform's importance and complexity. Initial development and procurement of training devices would have occurred alongside aircraft acquisition. Subsequent spending typically involves sustainment, upgrades, modifications, and potentially new device development as the platform evolves or new training requirements emerge. While specific historical spending figures for P-8 training devices alone are not readily available in this data snippet, the overall P-8 program costs are in the tens of billions of dollars. Investments in training are a crucial component of the total lifecycle cost for major defense platforms.

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: COST PLUS FIXED FEE (U)

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: $265,897,009

Exercised Options: $259,348,765

Current Obligation: $186,508,976

Subaward Activity

Number of Subawards: 34

Total Subaward Amount: $3,291,526

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