DoD awards $81.2M to Boeing for F-15 radar sustainment, raising value-for-money questions due to sole-source nature

Contract Overview

Contract Amount: $81,230,738 ($81.2M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2012-07-01

End Date: 2016-09-30

Contract Duration: 1,552 days

Daily Burn Rate: $52.3K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: RADAR SUSTAINMENT OF THE F-15 V1/V2/V3 RADAR SYSTEMS

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $81.2 million to THE BOEING COMPANY for work described as: RADAR SUSTAINMENT OF THE F-15 V1/V2/V3 RADAR SYSTEMS Key points: 1. The contract focuses on sustaining critical radar systems for the F-15 aircraft, indicating a need for specialized engineering expertise. 2. Awarded to a single, incumbent contractor, this sole-source approach may limit opportunities for competitive pricing and innovation. 3. The duration of the contract (over 4 years) suggests a long-term requirement for ongoing support and maintenance. 4. While specific performance metrics are not detailed, the sustainment of advanced radar systems is crucial for air superiority. 5. The contract falls under engineering services, a broad category that requires careful benchmarking to assess value. 6. The absence of competition raises concerns about potential price escalation over the contract's life.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without detailed cost breakdowns or comparisons to similar sole-source sustainment efforts. The fixed-price nature provides some cost certainty, but the lack of competition means the government may not be achieving the best possible price. The raw dollar amount is significant, reflecting the complexity and criticality of F-15 radar systems, but its value-for-money proposition is weakened by the procurement method.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor, The Boeing Company, was solicited. This approach is typically used when a unique capability or proprietary technology is required, or when it's deemed not in the government's best interest to compete. The lack of multiple bidders means there was no direct price competition, potentially leading to higher costs than if multiple firms had vied for the contract.

Taxpayer Impact: Taxpayers may be paying a premium for this radar sustainment due to the absence of competitive pressure to drive down costs. Without a competitive process, there's less assurance that the government is receiving the most economical solution.

Public Impact

The primary beneficiaries are the U.S. Air Force units operating the F-15 fighter jets, ensuring their radar systems remain operational and effective. This contract delivers essential engineering services for the sustainment and maintenance of advanced radar technology. The geographic impact is national, supporting a key component of U.S. air defense capabilities. Workforce implications include the need for highly skilled engineers and technicians specializing in aerospace and radar systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the sole-source justification could obscure potential alternatives.
Long-term sustainment contracts can sometimes lead to vendor lock-in if not managed carefully.
Dependence on a single contractor for critical system maintenance poses a risk if that contractor faces financial or operational issues.

Positive Signals

Award to a known, experienced contractor (Boeing) for a critical system likely ensures continuity of operations.
F-15 radar systems are complex and require specialized expertise, which Boeing likely possesses.
Fixed-price contract type offers some cost predictability for the government.
Sustaining existing platforms like the F-15 is often more cost-effective than procuring entirely new systems.

Sector Analysis

The aerospace and defense sector is characterized by high R&D costs, long product lifecycles, and significant government procurement. Sustainment contracts like this are a substantial part of the industry, ensuring the operational readiness of aging but vital military platforms. The market for F-15 sustainment is dominated by the original equipment manufacturer, Boeing, due to the proprietary nature of the technology and the deep integration required. Comparable spending benchmarks for radar sustainment vary widely based on system complexity and platform, but typically represent a significant portion of the total platform acquisition cost over its service life.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there explicit information regarding subcontracting opportunities 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 specific support services. Further investigation into Boeing's subcontracting plan would be needed to assess any indirect benefits.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance with contract terms. Accountability measures are inherent in the firm-fixed-price structure, which shifts some cost risk to the contractor. Transparency is limited due to the sole-source nature, but contract award data is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

F-15 Aircraft Modernization Programs
Aerospace Engineering Services
Defense Radar Systems Procurement
Military Aircraft Maintenance and Repair
Department of Defense Sustainment Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Critical system dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $81.2 million to THE BOEING COMPANY. RADAR SUSTAINMENT OF THE F-15 V1/V2/V3 RADAR SYSTEMS

Who is the contractor on this award?

The obligated recipient is THE BOEING COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $81.2 million.

What is the period of performance?

Start: 2012-07-01. End: 2016-09-30.

What is the historical spending trend for F-15 radar sustainment with The Boeing Company?

Analyzing historical spending requires access to prior contract awards for F-15 radar sustainment. Without specific data on previous contracts, it's difficult to establish a precise trend. However, it's common for sustainment costs to increase over time as systems age and require more extensive maintenance or upgrades. The $81.2 million awarded here covers a period from July 2012 to September 2016. To understand the trend, one would need to compare this amount to earlier or subsequent contracts for similar services, looking for patterns of escalation, stabilization, or reduction in costs relative to the scope of work performed.

How does the value of this contract compare to similar radar sustainment contracts for other fighter aircraft?

Direct comparison is challenging due to variations in radar technology complexity, aircraft platform age, and contract scope (e.g., includes upgrades vs. pure maintenance). However, sustainment costs for advanced fighter jet radar systems can range from tens to hundreds of millions of dollars over a platform's life. For instance, sustainment for comparable systems on aircraft like the F-16 or F/A-18 might show similar or higher figures depending on the specific radar suite and the level of support required. The $81.2M for over four years suggests a substantial but potentially reasonable cost for maintaining sophisticated F-15 radar, though the sole-source nature prevents definitive value assessment against competitive benchmarks.

What specific engineering services are included under this contract, and what is the basis for the $81.2M cost?

The contract specifies 'RADAR SUSTAINMENT OF THE F-15 V1/V2/V3 RADAR SYSTEMS' and falls under NAICS code 541330 (Engineering Services). This implies services such as diagnostics, repair, maintenance, technical support, system integration, and potentially minor modifications or upgrades to ensure the operational readiness of the F-15's radar systems. The $81.2 million cost is based on a firm-fixed-price contract, meaning the total price was negotiated upfront. The breakdown would typically involve labor hours, material costs, overhead, and profit margins, all agreed upon with Boeing prior to award. Without the detailed proposal and negotiation records, the precise cost drivers remain internal to the contract.

What are the risks associated with relying solely on The Boeing Company for F-15 radar sustainment?

The primary risk is the lack of competitive pressure, which can lead to inflated prices and reduced incentives for innovation or efficiency. If Boeing faces financial difficulties, supply chain disruptions, or internal operational issues, it could directly impact the availability and performance of critical F-15 radar systems. Furthermore, over-reliance can lead to vendor lock-in, making it difficult and costly to switch providers or adopt alternative technologies in the future. There's also a potential risk that without competitive benchmarking, the government might not be aware if it's receiving suboptimal performance or paying above market rates for the services rendered.

Are there any performance metrics or Key Performance Indicators (KPIs) associated with this contract to measure effectiveness?

The provided data does not specify the performance metrics or KPIs tied to this contract. Typically, sustainment contracts for critical systems like radar include requirements related to system availability, Mean Time Between Failures (MTBF), Mean Time To Repair (MTTR), and response times for technical support. The effectiveness of the radar sustainment would be measured by the extent to which these (or similar) metrics are met, ensuring the F-15 fleet maintains its combat readiness. Without access to the contract's Performance Work Statement (PWS), these specific measures remain unknown.

What is the strategic importance of sustaining the F-15's radar systems, and how does this contract support it?

The F-15 is a key component of the U.S. Air Force's air superiority fleet. Its radar systems are critical for detecting, tracking, and engaging enemy aircraft, as well as for navigation and targeting. Sustaining these advanced radar systems (V1/V2/V3 variants) ensures the F-15 remains a relevant and effective platform in modern air combat environments. This $81.2 million contract directly supports this strategic objective by providing the necessary engineering expertise and services to maintain the operational capability and reliability of these vital systems, thereby preserving the F-15's role in national defense.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

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

Financial Breakdown

Contract Ceiling: $102,552,102

Exercised Options: $102,552,102

Current Obligation: $81,230,738

Contract Characteristics

Consolidated Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: F3365701D0026

IDV Type: IDC

Timeline