Boeing awarded $35M for F/A-18 E/F support equipment, a sole-source contract

Contract Overview

Contract Amount: $35,062,547 ($35.1M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2019-06-12

End Date: 2024-12-31

Contract Duration: 2,029 days

Daily Burn Rate: $17.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: F/A-18 E/F PSE, SE&TEST EQUIPMENT

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $35.1 million to THE BOEING COMPANY for work described as: F/A-18 E/F PSE, SE&TEST EQUIPMENT Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Significant portion of contract value allocated to testing and support equipment. 3. Long contract duration of over 5 years suggests ongoing sustainment needs. 4. Contract type is Firm Fixed Price, shifting cost risk to the contractor. 5. Awarded by the Department of the Navy, indicating a critical defense need. 6. The contractor, The Boeing Company, is a major defense industrial base participant.

Value Assessment

Rating: fair

Benchmarking the value for this specific contract is challenging due to its sole-source nature and focus on specialized support equipment. Without competitive bids, it's difficult to definitively assess if the pricing represents optimal value for taxpayers. The contract's duration and the nature of sustainment equipment suggest a need for specialized, potentially high-cost items. Further analysis would require comparing the unit costs of specific test equipment against industry benchmarks or previous procurements of similar items.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning only one bidder, The Boeing Company, was solicited. This approach is typically used when a unique capability or proprietary item is required, and competition is not feasible or would not be advantageous. The lack of competition means there was no opportunity for price discovery through a bidding process, potentially leading to higher costs than if multiple vendors had competed.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to secure the best possible prices, which can result in less efficient use of taxpayer funds.

Public Impact

The primary beneficiaries are the U.S. Navy's F/A-18 E/F Super Hornet fleet, ensuring operational readiness. Services delivered include the provision of specialized test equipment and support for the aircraft. Geographic impact is primarily within the United States, supporting naval aviation bases. Workforce implications include the need for skilled personnel to operate and maintain the specialized equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Long contract duration may indicate a lack of readily available alternative solutions or a need for sustained support.
Focus on specialized test equipment could involve high unit costs and limited market availability.

Positive Signals

Firm Fixed Price contract shifts cost overrun risk to the contractor.
Award to a prime contractor like Boeing ensures integration with existing aircraft sustainment.
Contract supports critical naval aviation assets, ensuring national security readiness.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts and auxiliary equipment. The market for specialized support and test equipment for advanced fighter jets like the F/A-18 E/F is often dominated by the original equipment manufacturer or a limited number of specialized suppliers due to proprietary technology and stringent qualification requirements. Spending in this sub-sector is driven by defense modernization and sustainment programs.

Small Business Impact

This contract does not appear to include a small business set-aside. As a sole-source award to a large prime contractor, there are limited direct opportunities for small businesses to participate as prime awardees. Subcontracting opportunities for small businesses may exist, but their extent and nature would depend on Boeing's subcontracting plan and the specific requirements for the support equipment.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. Accountability measures are embedded in the Firm Fixed Price contract terms, requiring delivery of specified equipment. Transparency is limited due to the sole-source nature of the award, with details on pricing and justification often being less publicly accessible than for competed contracts. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

F/A-18 E/F Super Hornet aircraft procurement
Naval aviation sustainment programs
Aerospace test and measurement equipment
Defense logistics and support services

Risk Flags

Sole-source award may lead to higher costs.
Long contract duration could indicate limited market alternatives.
Dependence on a single supplier for critical equipment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.1 million to THE BOEING COMPANY. F/A-18 E/F PSE, SE&TEST EQUIPMENT

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 $35.1 million.

What is the period of performance?

Start: 2019-06-12. End: 2024-12-31.

What is the historical spending trend for F/A-18 E/F support equipment from The Boeing Company?

Analyzing historical spending for F/A-18 E/F support equipment from The Boeing Company requires access to detailed contract databases and procurement histories. Without specific data points for prior contracts related to this exact scope (SE&TEST EQUIPMENT), a precise trend cannot be established. However, given the F/A-18 E/F's operational lifespan and ongoing sustainment needs, it is reasonable to infer that there would be recurring procurements for support equipment, spare parts, and related services. The value of these procurements can fluctuate based on fleet readiness requirements, upgrades, and the lifecycle of the equipment itself. A comprehensive review would involve aggregating data from multiple delivery orders and contracts over several fiscal years to identify patterns in spending volume and frequency.

How does the unit cost of the specialized test equipment compare to similar items procured by other military branches or for other aircraft platforms?

Direct comparison of unit costs for specialized test equipment is challenging without specific itemized data from this contract and comparable procurements. The F/A-18 E/F's unique systems necessitate bespoke or highly specialized test equipment, which often carries a premium due to limited production runs and high development costs. Benchmarking would require identifying identical or functionally equivalent test equipment used for other platforms (e.g., F-35, F-16, or naval ship systems) and comparing their acquisition costs. Factors such as technological sophistication, required calibration, and maintenance support also influence unit pricing. Given the sole-source nature of this award, a definitive value-for-money assessment against market rates is difficult without further detailed cost analysis or access to competitive bids for similar equipment.

What are the key performance indicators (KPIs) used to measure the success of this contract and the reliability of the delivered test equipment?

Key Performance Indicators (KPIs) for a contract involving specialized test equipment typically focus on delivery timeliness, equipment functionality, reliability, and supportability. For this contract, KPIs might include: 1. On-Time Delivery: Ensuring that the test equipment is delivered by the specified dates to support flight line operations and maintenance schedules. 2. Equipment Performance and Accuracy: Verifying that the delivered equipment meets all technical specifications and performs diagnostic tests with the required accuracy and reliability. 3. Mean Time Between Failures (MTBF): Measuring the operational uptime of the equipment and its resistance to malfunctions. 4. Support and Maintenance Responsiveness: Assessing the contractor's ability to provide timely technical support, calibration, and repair services for the equipment. 5. Compliance with Technical Orders: Ensuring the equipment integrates seamlessly with existing maintenance procedures and documentation.

What is the potential risk associated with relying on a single contractor for critical F/A-18 E/F support equipment over an extended period?

The primary risk associated with relying on a single contractor (sole-source) for critical F/A-18 E/F support equipment over an extended period is the potential for price escalation and reduced innovation. Without competitive pressure, the contractor may have less incentive to offer cost reductions or to invest in improving the efficiency or capabilities of the equipment. Furthermore, if the contractor experiences financial difficulties, production issues, or decides to exit this market segment, the Navy could face significant disruptions in obtaining necessary support. This dependency also limits the government's flexibility to adopt newer, potentially more advanced or cost-effective technologies that might emerge from other suppliers. Mitigation strategies often involve robust contract management, performance monitoring, and potentially seeking alternative solutions or developing in-house capabilities where feasible.

What is the estimated total cost of ownership for the F/A-18 E/F program, and how does this specific contract contribute to that overall figure?

The total cost of ownership (TCO) for a major defense platform like the F/A-18 E/F encompasses acquisition, sustainment, operations, and disposal costs over its entire lifecycle. This specific contract, valued at approximately $35 million for support equipment and testing apparatus, represents a component of the sustainment phase. While $35 million is a significant sum, it must be viewed in the context of the multi-billion dollar TCO for the entire Super Hornet fleet, which includes aircraft procurement, upgrades, fuel, personnel, maintenance, and other support elements. The TCO for the F/A-18 E/F program is substantial, reflecting the complexity and operational demands of advanced fighter aircraft. This contract's contribution is focused on ensuring the fleet remains mission-capable by providing essential ground support infrastructure.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: MAINT/REPAIR SHOP EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6833519R0191

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: $35,062,547

Exercised Options: $35,062,547

Current Obligation: $35,062,547

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6833515G0022

IDV Type: BOA

Timeline