Boeing awarded $22.8M for RAAF System Configuration Set, a sole-source contract with a long performance period
Contract Overview
Contract Amount: $22,864,458 ($22.9M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2018-10-31
End Date: 2023-12-10
Contract Duration: 1,866 days
Daily Burn Rate: $12.3K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: IGF::OT::IGF RAAF SYSTEM CONFIGURATION SET (SCS)
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $22.9 million to THE BOEING COMPANY for work described as: IGF::OT::IGF RAAF SYSTEM CONFIGURATION SET (SCS) Key points: 1. Contract awarded to a single, large defense contractor, raising questions about competitive pricing. 2. Extended performance period of over 5 years suggests a long-term need for these services. 3. The contract type (Cost Plus Fixed Fee) can incentivize cost overruns if not closely monitored. 4. Aircraft manufacturing sector is characterized by high barriers to entry and limited competition. 5. Performance is tied to a specific system configuration, indicating a specialized and critical need. 6. The absence of small business participation warrants further investigation into subcontracting opportunities.
Value Assessment
Rating: questionable
The contract's value of $22.8 million over nearly six years for system configuration is difficult to benchmark without specific service details. As a sole-source award to a major defense contractor, there is a lack of competitive data to assess pricing fairness. The Cost Plus Fixed Fee (CPFF) structure, while common in complex defense procurements, carries inherent risks of cost escalation if not rigorously managed and audited. Without comparable sole-source awards for similar system configurations, a definitive value-for-money assessment is challenging.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, The Boeing Company, was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple companies vying for the contract. While sole-source awards can be justified for unique capabilities or urgent needs, they limit price discovery and potentially lead to higher costs for the government compared to a competed contract. The lack of competition here means taxpayers did not benefit from potential cost savings that could arise from a bidding war.
Taxpayer Impact: Sole-source awards mean taxpayers are not benefiting from competitive pricing, potentially leading to higher overall expenditure for this system configuration.
Public Impact
The primary beneficiary is the Department of the Navy, receiving critical system configuration services for the RAAF. The services delivered are essential for maintaining and updating the configuration of a specific aircraft system. The contract's geographic impact is centered in Missouri, where the contractor is located. Workforce implications include employment for skilled engineers and technicians at The Boeing Company.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pressure on pricing.
- Cost Plus Fixed Fee contract type carries risk of cost overruns.
- Lack of transparency in sole-source justification.
- Extended performance period without clear interim milestones.
- No indication of small business participation or subcontracting goals.
Positive Signals
- Awarded to a prime contractor with extensive experience in aircraft manufacturing.
- Contract addresses a specific, likely critical, system configuration need.
- Long performance period suggests a stable, ongoing requirement.
- Fixed fee component provides some cost certainty within the CPFF structure.
Sector Analysis
The aircraft manufacturing sector is a highly specialized and capital-intensive industry dominated by a few large, established players like Boeing. This contract falls within the broader aerospace and defense industry, which sees significant government spending. Market size for such specialized system configuration services is difficult to quantify independently but is intrinsically linked to the overall defense budget and specific platform procurement. Comparable spending benchmarks are scarce due to the proprietary nature of system configurations and the prevalence of sole-source or limited competition awards in this niche.
Small Business Impact
This contract does not appear to have a small business set-aside, as indicated by 'sb': false. Furthermore, the 'ss' field is also false, suggesting no specific small business subcontracting goals were mandated within this award. This lack of explicit small business involvement means that opportunities for small businesses to participate in this specific contract are likely limited, potentially impacting the broader small business ecosystem within the defense supply chain for this particular system.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. The Cost Plus Fixed Fee (CPFF) structure necessitates robust financial oversight to ensure costs are reasonable and allocable. Inspector General (IG) jurisdiction would apply for investigations into fraud, waste, or abuse. Transparency is limited due to the sole-source nature of the award, with public visibility primarily restricted to contract award announcements rather than detailed performance or cost breakdowns.
Related Government Programs
- Aircraft Manufacturing
- System Configuration Services
- Department of the Navy Contracts
- Cost Plus Fixed Fee Contracts
- Sole Source Procurements
Risk Flags
- Sole Source Award
- Cost Plus Fixed Fee Contract Type
- Lack of Competition
- Extended Performance Period
Tags
defense, department-of-the-navy, aircraft-manufacturing, system-configuration, sole-source, cost-plus-fixed-fee, missouri, large-business, non-competed, delivery-order, aerospace
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $22.9 million to THE BOEING COMPANY. IGF::OT::IGF RAAF SYSTEM CONFIGURATION SET (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 $22.9 million.
What is the period of performance?
Start: 2018-10-31. End: 2023-12-10.
What specific system configuration is being addressed by this contract, and what is its criticality to the RAAF?
The contract, "IGF::OT::IGF RAAF SYSTEM CONFIGURATION SET (SCS)", pertains to the System Configuration Set (SCS) for the RAAF (Royal Australian Air Force, though awarded by the US Navy). While the exact technical specifications of the SCS are not publicly detailed, its criticality likely lies in ensuring the proper functioning, interoperability, and potentially upgradeability of specific aircraft systems operated by the Navy. System configuration sets often encompass software, hardware integration, and operational parameters essential for mission effectiveness. The sole-source award to Boeing suggests a deep integration with existing platforms or proprietary technology that only Boeing can provide or modify.
How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for similar services, and what are the associated risks?
Cost Plus Fixed Fee (CPFF) contracts are common in research and development or complex service procurements where the scope is not fully defined at the outset, or where innovation is required. Unlike fixed-price contracts, CPFF allows the contractor to recover all allowable costs plus a predetermined fixed fee representing profit. This structure shifts much of the cost risk to the government. The primary risk is potential cost escalation, as the contractor has less incentive to control costs once the fee is fixed. Effective oversight, detailed cost accounting, and clear performance metrics are crucial to mitigate these risks and ensure value for money. Other contract types like Firm-Fixed-Price (FFP) offer more cost certainty but may not be suitable for undefined scopes.
What is the historical spending pattern for RAAF system configuration or similar services by the Department of the Navy?
Analyzing historical spending patterns for 'RAAF system configuration' specifically is challenging due to the unique nature of this contract and the limited public data available for sole-source awards. However, the Department of the Navy consistently spends billions annually on aircraft maintenance, modification, and sustainment, often through contracts with major aerospace manufacturers like Boeing. Spending on system configuration is typically embedded within larger sustainment or upgrade programs. Without more granular data or comparable contract actions, it's difficult to establish a precise historical trend for this specific service category. The $22.8M over nearly six years represents a moderate annual spend within the broader context of naval aviation sustainment.
What due diligence was performed to justify a sole-source award to The Boeing Company for this contract?
Justifying a sole-source award typically involves demonstrating that only one responsible source can provide the required supplies or services. For The Boeing Company, this justification likely stems from proprietary technology, unique manufacturing capabilities, or extensive integration with existing naval aviation platforms that only Boeing possesses or can modify. The Department of the Navy would have conducted market research to confirm the lack of adequate competition and documented the rationale, often citing specific technical requirements, existing system knowledge, or urgent needs that preclude a competitive process. This justification is usually submitted to and reviewed by higher authorities within the agency and potentially the Government Accountability Office (GAO) if protested.
What are the potential implications of this contract on future competition for similar aircraft system configuration services?
This sole-source award to Boeing may have limited implications for future competition if the specific system configuration is unique to a particular platform or technology that Boeing exclusively supports. However, if similar system configuration needs arise for other platforms or future upgrades, the precedent of a sole-source award could discourage other potential bidders from investing in capabilities, assuming future awards will also be sole-sourced. Conversely, if the government actively seeks to broaden competition for future needs, they would need to clearly define requirements that allow for multiple vendors and potentially break down the scope into smaller, more competitive packages.
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: $22,864,458
Exercised Options: $22,864,458
Current Obligation: $22,864,458
Subaward Activity
Number of Subawards: 12
Total Subaward Amount: $6,561,545
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: 2018-10-31
Current End Date: 2023-12-10
Potential End Date: 2023-12-10 00:00:00
Last Modified: 2025-12-02
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