Boeing awarded $146.6M for F/A-18 system configuration sets, a sole-source contract with a long performance period
Contract Overview
Contract Amount: $146,596,033 ($146.6M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2018-09-25
End Date: 2025-06-30
Contract Duration: 2,470 days
Daily Burn Rate: $59.4K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: IGF::OT::IGF F/A-18 H16 SYSTEM CONFIGURATION SETS (SCS)
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $146.6 million to THE BOEING COMPANY for work described as: IGF::OT::IGF F/A-18 H16 SYSTEM CONFIGURATION SETS (SCS) Key points: 1. Contract awarded on a sole-source basis, limiting competitive price discovery. 2. Significant contract value suggests a critical role for these system configuration sets. 3. Extended performance period of over 2000 days indicates a long-term need. 4. The contract type (Cost Plus Fixed Fee) may incentivize cost overruns. 5. Boeing, as the incumbent, likely possesses unique knowledge of the F/A-18 systems. 6. Lack of competition raises questions about overall value for taxpayer dollars.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is challenging due to its sole-source nature and specialized product. However, the significant dollar amount over a multi-year period warrants scrutiny. Without competitive bids, it's difficult to ascertain if the pricing reflects optimal market value or if efficiencies could have been achieved through a more open bidding process. The Cost Plus Fixed Fee structure, while common for complex systems, can sometimes lead to higher costs than fixed-price contracts if not managed rigorously.
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 specific contractor possesses unique capabilities or when the item is a proprietary component. The lack of competition means that price discovery through market forces was absent, potentially leading to higher costs for the government compared to a competed contract.
Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to secure the best possible pricing, potentially resulting in less efficient use of taxpayer funds.
Public Impact
The primary beneficiaries are the U.S. Navy and Marine Corps, who rely on the F/A-18 aircraft for their operational readiness. The contract delivers essential system configuration sets (SCS) crucial for maintaining and upgrading the F/A-18 fleet. Geographic impact is primarily centered around Boeing's facilities in Missouri, where the work is performed. Workforce implications include the continued employment of skilled engineers, technicians, and manufacturing personnel at Boeing.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pressure on pricing.
- Cost Plus Fixed Fee contract type may not provide maximum incentive for cost control.
- Long performance period increases exposure to potential cost escalations.
- Lack of transparency in pricing due to sole-source nature.
Positive Signals
- Boeing is the original equipment manufacturer, ensuring specialized knowledge and integration.
- Contract supports critical defense capabilities for the F/A-18 platform.
- Delivery orders suggest a phased approach to fulfilling needs.
- Long-term contract provides stability for critical supply chains.
Sector Analysis
The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and long product lifecycles. Contracts for aircraft manufacturing and sustainment, like this one for F/A-18 system configuration sets, represent a substantial portion of defense spending. The market is often dominated by a few large prime contractors, such as Boeing, who possess the specialized knowledge and facilities required. Benchmarks for similar sustainment and upgrade contracts can vary widely based on system complexity and quantity, but this award falls within the typical range for major aircraft component procurements.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor, Boeing, is a large business. While Boeing may utilize small businesses in its supply chain, the direct award to a large entity means that opportunities for direct small business participation through set-asides are absent. Subcontracting plans would need to be reviewed to assess the extent of small business involvement.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. The Inspector General for the Department of Defense would have jurisdiction for audits and investigations into potential fraud, waste, or abuse. Transparency is limited due to the sole-source nature, but contract modifications and performance reports would be subject to internal review and potentially public disclosure depending on classification.
Related Government Programs
- F/A-18 Aircraft Sustainment
- Naval Aviation Modernization Programs
- Aerospace Manufacturing Contracts
- Defense Logistics Agency Support
Risk Flags
- Sole-source award limits competition.
- Cost-plus contract type may lead to higher costs.
- Long performance period increases risk exposure.
- Potential for contractor cost overruns.
Tags
defense, department-of-the-navy, aircraft-manufacturing, sole-source, cost-plus-fixed-fee, boeing, missouri, f-18, system-configuration-sets, long-term-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $146.6 million to THE BOEING COMPANY. IGF::OT::IGF F/A-18 H16 SYSTEM CONFIGURATION SETS (SCS)
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 $146.6 million.
What is the period of performance?
Start: 2018-09-25. End: 2025-06-30.
What is the historical spending trend for F/A-18 system configuration sets with The Boeing Company?
Analyzing historical spending requires access to detailed contract databases beyond this single award. However, the F/A-18 program has been in service for decades, implying consistent spending on sustainment, upgrades, and component manufacturing. Previous contracts for similar system configuration sets or related components would provide context. Without specific historical data, it's presumed that spending on such critical systems is ongoing and substantial, reflecting the operational demands placed on the F/A-18 fleet. The current award of $146.6 million over approximately 6.5 years suggests a significant, but potentially steady, annual expenditure rate for these specific configuration sets.
How does the Cost Plus Fixed Fee (CPFF) contract type compare to other pricing arrangements for similar defense procurements?
Cost Plus Fixed Fee (CPFF) contracts are often used when the scope of work is not precisely defined or involves significant uncertainty, such as in research and development or complex system integration. The government agrees to pay the contractor's allowable costs plus a fixed fee representing profit. This contrasts with Fixed Price contracts, which offer greater cost certainty for the government but may require more detailed upfront specifications. CPFF contracts can incentivize contractors to incur costs to achieve a fixed profit margin, potentially leading to higher overall costs if not managed carefully. For sustainment and manufacturing of established systems like the F/A-18, fixed-price or incentive-fee contracts might offer better value if the requirements are well-defined.
What are the key performance indicators (KPIs) typically used to assess the performance of aircraft component manufacturing contracts?
Key performance indicators for aircraft component manufacturing contracts typically include on-time delivery rates, quality acceptance rates (minimizing defects), adherence to technical specifications, and cost performance against budget. For system configuration sets, specific metrics might relate to the functionality and reliability of the delivered components. The government's quality assurance representatives (QARs) play a crucial role in monitoring these aspects. Performance metrics are often tied to contract clauses, and deviations can lead to corrective actions or impact future contract awards. For this specific contract, tracking the successful integration and performance of the SCS within the F/A-18 platform would be paramount.
What is the potential impact of a sole-source award on innovation and technological advancement in the F/A-18 support ecosystem?
Sole-source awards can stifle innovation by removing the competitive pressure that often drives contractors to develop more efficient processes or advanced solutions. When a single supplier is guaranteed the business, there may be less incentive to invest in research and development for improvements that could benefit the government. While Boeing, as the OEM, may have proprietary knowledge, a lack of competition means alternative technological approaches or cost-saving innovations from other potential suppliers are not explored. This can lead to a reliance on existing technologies and potentially slower adoption of advancements in the long run, impacting the overall modernization and cost-effectiveness of the F/A-18 fleet.
Are there any known risks associated with The Boeing Company's performance on similar defense contracts?
The Boeing Company, as a major defense contractor, has a long history of performance across numerous programs. Like any large organization, it has faced scrutiny and challenges on various contracts related to production delays, quality control issues, and cost overruns in the past. Specific risks associated with F/A-18 support would depend on the complexity of the system configuration sets and the specific demands of the current contract. However, Boeing's extensive experience with the F/A-18 platform suggests a deep understanding of the system's requirements and potential challenges. A review of recent performance reports and any associated corrective action plans would provide a more precise risk assessment.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N6893615R0072
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: $176,735,923
Exercised Options: $176,735,923
Current Obligation: $146,596,033
Actual Outlays: $5,056,703
Subaward Activity
Number of Subawards: 34
Total Subaward Amount: $16,472,235
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N6893618D0026
IDV Type: IDC
Timeline
Start Date: 2018-09-25
Current End Date: 2025-06-30
Potential End Date: 2025-06-30 00:00:00
Last Modified: 2025-12-08
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