Boeing awarded $164.6M for F/A-18 system configuration sets, with limited competition
Contract Overview
Contract Amount: $164,566,572 ($164.6M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2018-09-27
End Date: 2025-06-30
Contract Duration: 2,468 days
Daily Burn Rate: $66.7K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: IGF::OT::IGF F/A-18 H18 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 $164.6 million to THE BOEING COMPANY for work described as: IGF::OT::IGF F/A-18 H18 SYSTEM CONFIGURATION SETS (SCS) Key points: 1. Contract awarded via other than full and open competition, raising questions about price discovery. 2. Significant contract value suggests a critical role in maintaining the F/A-18 fleet. 3. Long performance period indicates a sustained need for these system configuration sets. 4. Sole-source nature warrants scrutiny of pricing and justification for lack of competition. 5. Boeing's established role as a prime contractor for F/A-18 likely influenced the award.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is challenging due to its sole-source nature and the specialized nature of F/A-18 system configuration sets. Without competitive bids, it's difficult to assess if the pricing reflects fair market value. The contract's duration and cost-plus-fixed-fee structure could lead to cost overruns if not closely managed. Further analysis of historical pricing for similar configurations or components would be necessary for a more robust value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded using other than full and open competition, meaning it was not competed among multiple potential bidders. This approach is typically used when only one source is capable of meeting the requirement, or in cases of urgent need. The lack of competition limits the government's ability to leverage market forces to achieve the best possible price and terms.
Taxpayer Impact: The sole-source award means taxpayers may not benefit from the cost savings that could arise from a competitive bidding process. This could result in a higher overall expenditure for these system configuration sets.
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, crucial for the functionality and maintenance of the F/A-18 fighter jet fleet. The geographic impact is primarily centered around the contractor's facilities in Missouri, where the work is performed. This contract supports specialized manufacturing jobs within the aerospace sector, contributing to the skilled workforce required for defense production.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may lead to inflated costs for taxpayers.
- Cost-plus-fixed-fee contract type can incentivize higher spending if not rigorously managed.
- Long contract duration increases exposure to potential cost increases over time.
- Specialized nature of components may limit future sourcing options.
- Dependence on a single contractor for critical components poses supply chain risk.
Positive Signals
- Contract supports a critical defense platform (F/A-18), ensuring fleet readiness.
- Boeing is a long-standing, experienced contractor for the F/A-18 program.
- Delivery order structure allows for phased execution and potential flexibility.
- Fixed fee component provides some cost certainty for the contractor's effort.
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 dominated by a few large prime contractors, such as Boeing, who possess the specialized knowledge and facilities required. Spending benchmarks for similar aircraft sustainment or modification programs can vary widely based on the complexity and quantity of components required.
Small Business Impact
This contract does not appear to involve a small business set-aside. Given the specialized nature of aircraft manufacturing and system configuration sets for the F/A-18, it is likely that the prime contractor, Boeing, will be responsible for fulfilling the majority of the work. Subcontracting opportunities for small businesses may exist, but their extent and nature are not detailed in the provided data. The impact on the small business ecosystem would depend on the specific subcontracting plans Boeing implements.
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 value for money. Inspector General (IG) jurisdiction would apply in cases of suspected fraud, waste, or abuse. Transparency is generally limited for sole-source defense contracts, but reporting requirements for contract performance and expenditures would be in place.
Related Government Programs
- F/A-18 Super Hornet Sustainment
- Naval Aviation Maintenance Programs
- Aerospace Component Manufacturing
- Defense Contractor Support Services
Risk Flags
- Sole-source award lacks competitive pricing.
- Cost-plus-fixed-fee structure shifts cost risk to the government.
- Long contract duration increases exposure to potential cost escalation.
- Dependence on a single contractor for critical components.
Tags
defense, department-of-the-navy, aircraft-manufacturing, sole-source, cost-plus-fixed-fee, boeing, missouri, f-18, system-configuration-sets, sustainment, major-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $164.6 million to THE BOEING COMPANY. IGF::OT::IGF F/A-18 H18 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 $164.6 million.
What is the period of performance?
Start: 2018-09-27. End: 2025-06-30.
What is the historical spending trend for F/A-18 system configuration sets awarded to The Boeing Company?
Analyzing historical spending trends for specific components like F/A-18 system configuration sets requires access to detailed contract databases and procurement histories. Without that granular data, it's difficult to provide a precise trend. However, general trends in F/A-18 sustainment spending by the Department of Defense have historically been significant, driven by the large fleet size and the need for ongoing maintenance, upgrades, and parts. Boeing, as the prime contractor for the F/A-18, has consistently been a major recipient of these funds. Fluctuations in spending can be influenced by factors such as fleet readiness requirements, modernization programs, and budget allocations. The current $164.6 million award for system configuration sets suggests a continued investment in maintaining the operational capability of the F/A-18 fleet.
How does the pricing of this contract compare to similar system configuration sets for other aircraft platforms?
Directly comparing the pricing of these F/A-18 system configuration sets to similar components for other aircraft platforms is challenging without specific cost data and detailed specifications for each component. Aircraft systems are highly specialized, and their complexity, materials, and manufacturing processes vary significantly. Furthermore, this contract was awarded on a sole-source basis, which inherently limits price discovery and makes external benchmarking difficult. To perform a meaningful comparison, one would need to identify comparable components (e.g., mission computers, avionics modules) on other high-performance military aircraft, obtain their unit costs (if publicly available or through competitive contracts), and account for differences in technological sophistication, production volume, and contractor overhead. Given the sole-source nature, a robust comparison would likely require internal government cost analysis or access to proprietary pricing data.
What are the primary risks associated with a sole-source award for critical aircraft components?
The primary risks associated with a sole-source award for critical aircraft components like F/A-18 system configuration sets include potential for inflated pricing due to the lack of competition, reduced incentive for the contractor to innovate or improve efficiency, and a heightened dependence on a single supplier. This dependence can create supply chain vulnerabilities, where disruptions at the sole source could significantly impact fleet readiness. Furthermore, the absence of competitive pressure may lead to less rigorous quality control or slower delivery times. Taxpayers bear the risk of paying a premium for these components, and the government has limited leverage to negotiate better terms. Effective mitigation requires stringent oversight, detailed cost analysis, and potentially exploring alternative sources or developing in-house capabilities for future procurements.
What is the expected impact of this contract on the operational readiness of the F/A-18 fleet?
This contract is expected to have a positive impact on the operational readiness of the F/A-18 fleet by ensuring the availability of critical system configuration sets. These sets are integral to the functioning and maintenance of the aircraft, likely encompassing components related to avionics, mission systems, or structural configurations. By awarding this contract, the Department of the Navy is investing in the sustainment of its F/A-18 aircraft, which are vital for national defense operations. The long performance period (through June 2025) suggests a commitment to maintaining a high level of readiness over an extended timeframe. The successful delivery of these configuration sets will directly support flight operations, training, and overall mission capability for the F/A-18 squadrons.
What are the implications of the Cost Plus Fixed Fee (CPFF) contract type for this award?
The Cost Plus Fixed Fee (CPFF) contract type for this award means that the contractor, Boeing, will be reimbursed for all allowable costs incurred in performing the work, plus a predetermined fixed fee representing profit. This structure is often used when the scope of work is not precisely defined or involves a high degree of uncertainty, as might be the case with complex system configurations. For the government, the CPFF structure provides some cost certainty regarding the contractor's profit margin (the fixed fee). However, it places the primary cost risk on the government, as the contractor is incentivized to incur costs to complete the work, and the total cost can exceed initial estimates if costs are not carefully managed and controlled. Robust government oversight is crucial to ensure that costs are reasonable and allocable to the contract.
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: $201,062,765
Exercised Options: $201,062,765
Current Obligation: $164,566,572
Actual Outlays: $14,326,279
Subaward Activity
Number of Subawards: 23
Total Subaward Amount: $5,799,446
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: 2018-09-27
Current End Date: 2025-06-30
Potential End Date: 2025-06-30 00:00:00
Last Modified: 2025-12-02
More Contracts from THE Boeing Company
- KC-X Modernization Program — $32.0B (Department of Defense)
- International Space Station — $22.4B (National Aeronautics and Space Administration)
- 200112!000108!9700!ZD60 !ballistic Missile Defense ORG. !HQ000601C0001 !A!N!*!N! !20001222!20080930!848025649!848025649!009256819!n!the Boeing Company !3370 E Miraloma AVE !anaheim !ca!92806!37000!089!01!huntsville !madison !alabama !+000383571022!n!n!000000000000!ad93!rdte/Other Defense-Adv Tech DEV !S1 !services !1caa!ballistic Missile Defense SYS !541710!*!*!3! ! ! !*!*!*!B!*!*!A! !A !U!R!2!001!B! !Z!Y!Z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! — $18.8B (Department of Defense)
- USN P-8A FRP II Long Lead Material — $18.1B (Department of Defense)
- 200512!010860!2100!w56hzv!tacom - Warren !w56hzv05c0724 !A!N! !Y! ! !20050923!20141231!016544780!016544780!009256819!n!the Boeing Company !J S Mcdonnell Blvd !saint Louis !mo!63166!65000!510!29!st. Louis !ST. Louis (city) !missouri !+000219245691!n!n!000000000000!az15!rdte/Other Research&development-Eng/Manuf Devel !S1 !services !301 !FCS !541330!E! !1! ! ! ! ! !20200930!B! ! !A! !d!u!u!1!001!n!1a!z!y!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! ! TAS::21 2040::TAS — $12.7B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)