Boeing awarded $586M for F/A-18E/F and EA-18G training systems, a sole-source contract

Contract Overview

Contract Amount: $5,864,629 ($5.9M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2024-12-13

End Date: 2026-04-06

Contract Duration: 479 days

Daily Burn Rate: $12.2K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: F/A-18E/F AND EA-18G TRAINING SYSTEMS

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $5.9 million to THE BOEING COMPANY for work described as: F/A-18E/F AND EA-18G TRAINING SYSTEMS Key points: 1. Contract awarded to The Boeing Company for essential training systems. 2. Sole-source award indicates limited competition, potentially impacting price. 3. Contract duration extends through April 2026. 4. Focus on training systems for critical naval aviation platforms. 5. Cost Plus Fixed Fee contract type allows for cost reimbursement plus a fee. 6. No small business set-aside noted, raising questions about broader economic impact.

Value Assessment

Rating: fair

The contract's value of $586.46 million for training systems is substantial. As a sole-source award, direct price comparisons to competitive bids are not feasible. The Cost Plus Fixed Fee structure means the government reimburses Boeing for allowable costs plus a predetermined fee, which can sometimes lead to higher overall costs if not carefully managed. Benchmarking this specific type of training system against market rates is challenging without more detailed cost breakdowns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, The Boeing Company, was solicited. This approach is typically used when a unique capability is required or when only one source can provide the necessary goods or services. The lack of competition means that the government did not benefit from a bidding process that could drive down prices through market forces.

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

Public Impact

Naval aviators operating F/A-18E/F Super Hornets and EA-18G Growlers will benefit from enhanced training. Improved training systems are expected to increase pilot proficiency and operational readiness. The contract supports specialized training infrastructure, likely located near naval air stations. This contract sustains jobs within The Boeing Company and its supply chain, particularly in Missouri.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing, potentially increasing costs for taxpayers.
Cost Plus Fixed Fee contract type can incentivize higher spending if not rigorously overseen.
Lack of small business participation may limit opportunities for smaller firms in the defense supply chain.

Positive Signals

Ensures continued availability of critical training systems for advanced naval aircraft.
Supports the operational readiness of the U.S. Navy's strike fighter and electronic warfare capabilities.
Contract award provides stability for a key defense contractor and its workforce.

Sector Analysis

The aerospace and defense sector is characterized by high R&D costs, long product development cycles, and significant government procurement. Training systems are a crucial component of maintaining readiness for complex military platforms like the F/A-18E/F and EA-18G. Spending in this area is often concentrated among a few large prime contractors due to the specialized nature of the technology and the need for integration with existing platforms. Comparable spending benchmarks for advanced simulation and training systems can vary widely based on complexity and scope.

Small Business Impact

This contract does not appear to include a small business set-aside. The sole-source nature of the award further limits opportunities for small businesses to participate directly as prime contractors. While Boeing may engage small businesses as subcontractors, the absence of a specific set-aside or competitive solicitation focused on small businesses means their direct role and potential economic benefits are not explicitly maximized through this particular contract.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract will likely involve the Department of the Navy's contracting officers and program managers. They are responsible for monitoring costs, ensuring compliance with contract terms, and verifying the allowability and reasonableness of expenses. Transparency may be limited due to the sole-source nature, but contract performance reviews and audits by the Defense Contract Audit Agency (DCAA) would provide accountability.

Related Government Programs

F/A-18E/F Super Hornet Procurement
EA-18G Growler Procurement
Naval Aviation Training and Simulation Programs
Defense Contractor Support Services

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $5.9 million to THE BOEING COMPANY. F/A-18E/F AND EA-18G TRAINING SYSTEMS

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 $5.9 million.

What is the period of performance?

Start: 2024-12-13. End: 2026-04-06.

What is the historical spending trend for F/A-18E/F and EA-18G training systems with The Boeing Company?

Analyzing historical spending requires access to detailed contract databases beyond the provided data. However, given the long operational life of the F/A-18E/F and EA-18G platforms, it is reasonable to assume that training systems represent a recurring and significant investment. The Department of the Navy likely has a continuous need for upgrades, maintenance, and new training capabilities for these aircraft. Past contracts for similar training systems would provide a benchmark, but the specific evolution of technology and platform upgrades would influence year-over-year spending. Without specific historical data, it's difficult to establish a precise trend, but consistent investment in readiness for these key assets is expected.

How does the Cost Plus Fixed Fee (CPFF) structure typically impact contractor performance and cost control compared to other contract types?

The Cost Plus Fixed Fee (CPFF) contract type reimburses the contractor for all allowable costs incurred, plus a fixed fee representing profit. This structure is often used when the scope of work is not well-defined or involves significant uncertainty, making firm-fixed-price contracts impractical. For contractors, CPFF offers reduced financial risk as costs are covered. However, it can reduce the incentive for cost efficiency, as the profit (fee) is fixed regardless of the final cost. Effective oversight by the government is crucial to control costs, ensure only allowable expenses are reimbursed, and prevent scope creep. Compared to firm-fixed-price contracts, CPFF generally carries higher cost risk for the government but provides flexibility for complex or evolving requirements.

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

Sole-source awards for critical defense systems like training simulators present several risks. Primarily, the lack of competition can lead to inflated prices, as the government does not benefit from market-driven price discovery. This can result in a higher cost to taxpayers. Secondly, without competitive pressure, there may be less incentive for the sole-source provider to innovate or improve efficiency beyond what is contractually required. Furthermore, reliance on a single supplier can create vulnerabilities in the supply chain and reduce flexibility if the contractor faces performance issues or financial instability. The government's negotiating leverage is also diminished in a sole-source scenario.

What is the expected impact of these training systems on the operational readiness of the F/A-18E/F and EA-18G fleets?

These training systems are designed to significantly enhance the operational readiness of the F/A-18E/F Super Hornet and EA-18G Growler fleets. Modern simulators provide realistic training environments that replicate complex combat scenarios, electronic warfare tactics, and aircraft handling characteristics without the risks and costs associated with live flight. By allowing pilots and aircrew to practice extensively in a virtual setting, these systems improve proficiency, reduce training-related accidents, and ensure that personnel are prepared for a wide range of mission requirements. Enhanced readiness translates directly to the Navy's ability to project power and respond effectively to threats.

Are there any specific performance metrics or milestones tied to this contract that indicate success?

The provided data does not detail specific performance metrics or milestones for this contract. However, typical performance expectations for such training systems would include high levels of simulator availability, fidelity to the actual aircraft systems, and the ability to accurately replicate mission scenarios. The Cost Plus Fixed Fee structure implies that the government will monitor the contractor's performance against the defined scope of work and the achievement of contractual objectives. Formal reviews, acceptance testing, and potentially user feedback from naval aircrews would serve as indicators of success. The fixed fee component suggests that meeting defined objectives is tied to the contractor's profit.

Industry Classification

NAICS: Manufacturing › Commercial and Service Industry Machinery Manufacturing › 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: N6134022R0062

Pricing Type: COST PLUS FIXED FEE (U)

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: $5,864,629

Exercised Options: $5,864,629

Current Obligation: $5,864,629

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $766,139

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6134024D0001

IDV Type: IDC

Timeline