Navy awards $191M Boeing contract for F/A-18 and EA-18G support, raising questions on competition

Contract Overview

Contract Amount: $19,106,595 ($19.1M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2025-08-26

End Date: 2027-09-30

Contract Duration: 765 days

Daily Burn Rate: $25.0K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: F/A-18 AND EA-18G FISCAL YEAR 2025 CAPABILITIES PRODUCTION SYSTEM CONFIGURATION SET (SCS) SUPPORT

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $19.1 million to THE BOEING COMPANY for work described as: F/A-18 AND EA-18G FISCAL YEAR 2025 CAPABILITIES PRODUCTION SYSTEM CONFIGURATION SET (SCS) SUPPORT Key points: 1. Contract focuses on critical production system configuration for advanced naval aircraft. 2. Sole-source award suggests limited market alternatives or specific contractor expertise. 3. Long-term contract duration (765 days) indicates ongoing need for specialized support. 4. Cost-plus-fixed-fee structure may incentivize cost overruns if not closely managed. 5. Lack of competition could impact price negotiation and overall value for taxpayers. 6. Contracting action is a delivery order against an existing contract vehicle.

Value Assessment

Rating: questionable

Benchmarking the value of this specific contract is challenging due to its specialized nature and sole-source award. However, the cost-plus-fixed-fee (CPFF) pricing structure warrants scrutiny. While CPFF can be appropriate for research and development or when costs are highly uncertain, it places a greater burden on the government to monitor contractor expenses to ensure efficiency and prevent excessive profit. Without competitive bids, it's difficult to ascertain if the fixed fee adequately compensates Boeing for the services rendered or if it represents a fair market price.

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 justified when only one responsible source is available or when there is a compelling urgency. The lack of competition means that the Navy did not benefit from a bidding process that could have driven down prices through market forces. This limits the government's ability to explore alternative solutions or pricing structures that might be offered by other qualified aerospace or engineering firms.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the best possible price, as the government cannot leverage competition to negotiate lower costs. This can lead to higher overall spending on essential defense systems.

Public Impact

The primary beneficiaries are the U.S. Navy's F/A-18 and EA-18G programs, ensuring operational readiness. Services delivered include critical support for the production configuration system, vital for aircraft manufacturing and maintenance. The geographic impact is primarily centered around The Boeing Company's operations in Missouri, where the contract is managed. Workforce implications include the need for specialized engineering and technical personnel at Boeing to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings.
Cost-plus-fixed-fee contract requires robust government oversight to manage costs effectively.
Lack of competition may reduce incentives for innovation or efficiency improvements by the contractor.

Positive Signals

Contract supports critical naval aviation platforms (F/A-18, EA-18G), ensuring national security.
Boeing is a long-standing, experienced provider for these specific aircraft systems.
Delivery order against an existing contract vehicle suggests a streamlined process for an established need.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on engineering services for advanced military aircraft. The market for specialized support for platforms like the F/A-18 and EA-18G is highly concentrated, with original equipment manufacturers like Boeing often being the primary or sole providers of such configuration support. Comparable spending benchmarks are difficult to establish publicly due to the proprietary nature of defense production systems, but overall defense spending on aircraft sustainment and modernization runs into billions annually.

Small Business Impact

This contract does not appear to include a small business set-aside, nor is there an indication of specific subcontracting goals for small businesses. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless Boeing actively engages small businesses for specialized support services under this order. Further analysis would be needed to determine if subcontracting opportunities exist and are being pursued.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Navy's contracting and program management offices. Given the cost-plus-fixed-fee structure, rigorous monitoring of Boeing's incurred costs and the justification for the fixed fee will be crucial. Transparency is limited by the sole-source nature and the proprietary aspects of production configuration systems. The Inspector General for the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse.

Related Government Programs

F/A-18 Super Hornet Sustainment
EA-18G Growler Sustainment
Naval Air Systems Command (NAVAIR) Contracts
Aerospace Engineering Services
Defense Production Support

Risk Flags

Sole-source award
Cost-plus-fixed-fee pricing
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.1 million to THE BOEING COMPANY. F/A-18 AND EA-18G FISCAL YEAR 2025 CAPABILITIES PRODUCTION SYSTEM CONFIGURATION SET (SCS) SUPPORT

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 $19.1 million.

What is the period of performance?

Start: 2025-08-26. End: 2027-09-30.

What is Boeing's track record with F/A-18 and EA-18G production configuration support?

The Boeing Company has a long and established history as the prime contractor and manufacturer for both the F/A-18 Hornet/Super Hornet family and the EA-18G Growler electronic warfare aircraft. Their involvement spans the entire lifecycle of these platforms, from initial design and production to sustainment and upgrades. This includes providing the necessary engineering services and support for the production configuration systems (SCS) that are critical for maintaining the integrity and functionality of the aircraft during manufacturing and throughout their operational life. Given their role as the original equipment manufacturer, Boeing possesses unique institutional knowledge and proprietary data related to these systems, making them a logical, albeit sole-source, provider for such specialized support.

How does the $191 million value compare to similar contracts for aircraft production system support?

Directly comparing the $191 million value of this specific delivery order for Fiscal Year 2025 capabilities production system configuration set (SCS) support is challenging due to the highly specialized and often proprietary nature of such services within the defense aerospace industry. Publicly available data on comparable sole-source contracts for SCS support on specific aircraft platforms is limited. However, the value is substantial, reflecting the complexity and criticality of maintaining the production configuration for advanced fighter and electronic warfare aircraft. The cost-plus-fixed-fee (CPFF) structure means the final cost could fluctuate based on actual labor and material costs incurred by Boeing, within the bounds of the negotiated fixed fee. Without competitive bids, establishing a definitive 'value for money' benchmark against market alternatives is not feasible.

What are the primary risks associated with this sole-source, CPFF contract?

The primary risks associated with this sole-source, Cost-Plus-Fixed-Fee (CPFF) contract are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher costs than might be achieved in a competitive bidding environment. The government relies heavily on Boeing's proposed pricing and cost estimations without the benefit of market validation. Secondly, the CPFF structure, while allowing for flexibility in uncertain environments, carries the risk of cost escalation if not rigorously monitored. The contractor has less financial incentive to control costs compared to fixed-price contracts, as costs are reimbursed plus a fixed fee. This necessitates robust government oversight to scrutinize expenditures, ensure efficiency, and prevent potential overruns that could inflate the total contract value beyond the initial $191 million estimate.

How effective is the Cost-Plus-Fixed-Fee (CPFF) structure for this type of engineering support?

The Cost-Plus-Fixed-Fee (CPFF) structure is often employed for contracts where the scope of work is not precisely defined, or where significant research, development, or engineering uncertainties exist, which can be the case for production configuration systems. It allows the contractor (Boeing) to be reimbursed for allowable costs incurred while performing the work, plus a predetermined fixed fee representing profit. This structure can be effective in ensuring that the government obtains the necessary specialized engineering support for complex systems like the F/A-18 and EA-18G, even if precise cost projections are difficult. However, its effectiveness hinges critically on the government's ability to establish a fair and reasonable fixed fee and to diligently audit and control the contractor's incurred costs throughout the contract performance period to prevent inefficiencies and unwarranted expenses.

What are the historical spending patterns for F/A-18 and EA-18G production support?

Historical spending patterns for F/A-18 and EA-18G production support, particularly for configuration management, are typically embedded within broader sustainment, modernization, and production contracts awarded to The Boeing Company. Specific line items for 'capabilities production system configuration set (SCS) support' are often not broken out as distinct, publicly reported contract actions year-over-year. Instead, this type of specialized engineering service is usually integrated into larger contract vehicles that cover a range of activities necessary to maintain and produce these aircraft. Annual spending on the F/A-18 and EA-18G programs collectively runs into billions of dollars, encompassing procurement, research and development, and extensive sustainment efforts. This $191 million delivery order represents a specific allocation for FY2025 SCS support within that larger budgetary context.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

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: $34,453,488

Exercised Options: $34,453,488

Current Obligation: $19,106,595

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N6893623D0001

IDV Type: IDC

Timeline