Boeing awarded $24M contract for RAAF H18 aircrew services, raising questions about competition and value
Contract Overview
Contract Amount: $23,974,417 ($24.0M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2024-10-25
End Date: 2027-07-30
Contract Duration: 1,008 days
Daily Burn Rate: $23.8K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: RAAF H18 AIRCREW
Plain-Language Summary
Department of Defense obligated $24.0 million to THE BOEING COMPANY for work described as: RAAF H18 AIRCREW Key points: 1. Contract awarded via "NOT AVAILABLE FOR COMPETITION" which limits price discovery. 2. Duration of over 3 years suggests a long-term need for these services. 3. Cost Plus Fixed Fee contract type may incentivize cost overruns. 4. Limited information on performance metrics makes assessing value difficult. 5. Boeing's extensive experience in defense contracting is a positive signal. 6. The specific nature of 'RAAF H18 aircrew' suggests a specialized, potentially niche service.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is challenging due to the lack of publicly available comparable contracts for 'RAAF H18 aircrew' services. The Cost Plus Fixed Fee (CPFF) pricing structure, while common for complex or uncertain scope work, can lead to higher costs compared to fixed-price contracts if not managed rigorously. Without detailed performance data and cost breakdowns, it's difficult to definitively assess if the $24 million represents a fair price for the services rendered over the contract's lifespan.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded under a sole-source justification, meaning it was not competed openly. This approach is typically used when only one responsible source can provide the required supplies or services. The lack of competition means potential savings from a competitive bidding process were not realized, and it raises questions about whether alternative solutions or providers were adequately considered.
Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure to drive down costs. The government did not benefit from the price discovery inherent in a competitive solicitation.
Public Impact
Benefits aircrew personnel by providing essential training and support services. Ensures the operational readiness and effectiveness of RAAF H18 aircrews. Services are likely delivered at a specific military installation or training facility. Supports a specialized segment of the defense workforce.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing and potential cost savings for taxpayers.
- Cost Plus Fixed Fee contract type carries inherent risk of cost escalation.
- Lack of detailed performance metrics hinders objective assessment of value for money.
- Limited transparency regarding the specific services and deliverables.
Positive Signals
- Awarded to a highly experienced and reputable defense contractor, The Boeing Company.
- Addresses a specific and likely critical need for aircrew support.
- Contract duration suggests a stable, long-term requirement.
Sector Analysis
The aerospace and defense sector is characterized by high technological complexity, significant R&D investment, and long product development cycles. Contracts like this, focused on specialized aircrew support, are crucial for maintaining the operational capabilities of military forces. While the total contract value is modest, it represents a segment of the broader defense services market, which is substantial. Comparable spending benchmarks are difficult to establish due to the specialized nature of the service.
Small Business Impact
This contract does not appear to have a small business set-aside component, nor is there information indicating significant subcontracting opportunities for small businesses. The award to a large prime contractor like Boeing suggests that the primary focus is on specialized capabilities rather than broad small business participation. Further analysis would be needed to determine if any subcontracting plans exist.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. The Cost Plus Fixed Fee structure necessitates close monitoring of costs and performance to ensure accountability. Inspector General (IG) jurisdiction would apply in cases of fraud, waste, or abuse. Transparency is limited by the sole-source nature and the proprietary details of the services provided.
Related Government Programs
- Aircrew Training Services
- Defense Contractor Support Services
- Military Aviation Support
- Specialized Defense Services
Risk Flags
- Sole-source award
- Cost-plus contract type
- Lack of transparency in service details
Tags
defense, department-of-defense, department-of-the-navy, sole-source, cost-plus-fixed-fee, aircrew-support, training-services, boeing, australia, international-cooperation
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $24.0 million to THE BOEING COMPANY. RAAF H18 AIRCREW
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 $24.0 million.
What is the period of performance?
Start: 2024-10-25. End: 2027-07-30.
What is the specific nature of the 'RAAF H18 aircrew' services being procured?
The provided data does not detail the specific services encompassed by 'RAAF H18 aircrew'. However, 'RAAF' typically refers to the Royal Australian Air Force, and 'H18' could denote a specific aircraft type, mission, or training program. Services likely include training, simulation, maintenance support, or operational assistance related to the H18 platform for RAAF aircrews. The 'Other Commercial and Service Industry Machinery Manufacturing' NAICS code is unusual for aircrew services and may indicate a broader scope or a data entry anomaly. Further investigation into the contract's statement of work would be necessary for precise clarification.
Why was this contract awarded on a sole-source basis?
The contract was awarded as 'NOT AVAILABLE FOR COMPETITION', indicating a sole-source justification. Common reasons for sole-source awards include the unique capability of a single contractor, urgent and compelling needs where competition is impractical, or when the service is a follow-on to a previously competed contract where only the original contractor can provide the necessary integration or support. Without the specific justification cited by the Department of the Navy, the exact rationale remains unknown. This lack of competition limits the government's ability to secure the best possible price through market forces.
What are the potential risks associated with the Cost Plus Fixed Fee (CPFF) contract type?
The Cost Plus Fixed Fee (CPFF) contract type, while useful for services with uncertain scope or high risk, presents several risks. The primary risk is that the contractor may have less incentive to control costs, as the government agrees to cover all allowable costs plus a predetermined fixed fee. This can lead to cost overruns if the contractor is not diligent in managing expenses or if unforeseen issues arise. Effective government oversight is crucial to monitor costs, ensure efficiency, and prevent unnecessary expenditures. The fixed fee itself, however, is not subject to change, providing some cost certainty for the profit component.
How does this contract compare to other similar aircrew support contracts?
Direct comparison is difficult due to the specialized nature of 'RAAF H18 aircrew' services and the sole-source award. Generally, aircrew support contracts can range significantly in price depending on the aircraft type, duration, scope of services (training, simulation, maintenance, operational support), and the level of contractor involvement. Contracts awarded through full and open competition often yield lower prices due to competitive pressures. The $24 million value over approximately three years suggests a substantial but not exceptionally large contract within the defense services domain. Benchmarking would require access to detailed statements of work and performance data for comparable contracts.
What is The Boeing Company's track record with similar government contracts?
The Boeing Company is a major global aerospace and defense contractor with an extensive history of performing complex services for the U.S. government and allied nations. They have a well-established track record in aircraft manufacturing, maintenance, training, and support services across various platforms. While specific details on 'RAAF H18 aircrew' support are not provided, Boeing routinely handles large-scale defense contracts involving sophisticated technology and specialized personnel. Their experience suggests a high likelihood of technical capability, though contract performance can vary, and oversight remains essential regardless of the contractor's reputation.
What are the implications of the contract end date (2027-07-30) for future spending?
The contract end date of July 30, 2027, indicates a defined period for the current procurement of RAAF H18 aircrew services. This provides a degree of predictability for the current fiscal period. However, the need for these services may extend beyond this date, potentially leading to future contract actions, such as extensions, modifications, or new solicitations. If the services remain critical, taxpayers should anticipate potential follow-on contracts. The government will need to plan for the potential continuation or transition of these services well in advance of the expiration date to ensure seamless support and avoid gaps.
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 AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N6134018R0049
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: $23,974,417
Exercised Options: $23,974,417
Current Obligation: $23,974,417
Subaward Activity
Number of Subawards: 17
Total Subaward Amount: $12,578,829
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N6134020D0003
IDV Type: IDC
Timeline
Start Date: 2024-10-25
Current End Date: 2027-07-30
Potential End Date: 2027-07-30 00:00:00
Last Modified: 2025-09-30
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