Boeing awarded $12.3B for F/A-18 E/F modifications, with contract performance extending to July 2026

Contract Overview

Contract Amount: $12,324,314 ($12.3M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2019-03-27

End Date: 2026-07-31

Contract Duration: 2,683 days

Daily Burn Rate: $4.6K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: F/A-18 E/F MODIFICATIONS

Place of Performance

Location: JACKSONVILLE, DUVAL County, FLORIDA, 32221

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $12.3 million to THE BOEING COMPANY for work described as: F/A-18 E/F MODIFICATIONS Key points: 1. Value for money is difficult to assess due to the lack of competition. 2. The contract is a sole-source award, limiting price discovery and potentially increasing costs. 3. Risk indicators include the long performance period and the cost-plus-fixed-fee pricing structure. 4. Performance context shows ongoing modifications to a critical naval aircraft platform. 5. Sector positioning places this contract within the broader defense aerospace manufacturing industry.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging given its sole-source nature and the specialized modifications involved. The Cost Plus Fixed Fee (CPFF) structure means that contractor costs are reimbursed plus a fixed fee, which can incentivize cost overruns if not managed tightly. Without competitive bids, it's difficult to ascertain if the pricing reflects fair market value for the services rendered. Comparisons to similar sole-source modification contracts for advanced military aircraft would be necessary for a more robust assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, technology, or security clearances. The lack of competition means there was no opportunity for price negotiation through a bidding process, which can limit the government's ability to secure the lowest possible price.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive pressure to drive down prices. The government's negotiating position is weakened without alternative sources.

Public Impact

The U.S. Navy is the primary beneficiary, receiving critical upgrades to its F/A-18 E/F Super Hornet fleet. Services delivered include modifications and sustainment activities essential for maintaining aircraft readiness. The geographic impact is primarily in Florida, where the contract is being performed. Workforce implications include employment for skilled engineers, technicians, and manufacturing personnel at the contractor's facility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing.
Cost-plus-fixed-fee structure may not incentivize cost efficiency.
Long contract duration increases exposure to potential cost escalations.
Reliance on a single contractor for critical modifications poses supply chain risk.

Positive Signals

Ensures continued availability of critical fleet modernization for the Navy.
Leverages established expertise of a sole-source provider for complex aircraft.
Supports long-term sustainment of a key defense asset.

Sector Analysis

This contract falls within the defense aerospace manufacturing sector, a significant segment of the broader aerospace and defense industry. This sector is characterized by high barriers to entry, extensive R&D, and long product lifecycles. Spending in this area is driven by national security requirements and technological advancements. Comparable spending benchmarks would involve other major defense platform modification and sustainment contracts.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there explicit information regarding subcontracting plans for small businesses. The sole-source nature of the award further reduces the likelihood of direct small business participation through competitive bidding. The impact on the small business ecosystem is likely minimal unless the prime contractor actively engages small businesses in its supply chain.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures would be tied to the terms and conditions of the Cost Plus Fixed Fee contract, including progress reports and audits. Transparency may be limited due to the sole-source nature and the classified aspects of defense modifications.

Related Government Programs

F/A-18 Super Hornet Program
Naval Aviation Sustainment
Defense Aircraft Manufacturing
Aerospace Modifications

Risk Flags

Sole-source award
Cost-plus-fixed-fee pricing
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.3 million to THE BOEING COMPANY. F/A-18 E/F MODIFICATIONS

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 $12.3 million.

What is the period of performance?

Start: 2019-03-27. End: 2026-07-31.

What is the historical spending trend for F/A-18 E/F modifications with The Boeing Company?

Analyzing historical spending for F/A-18 E/F modifications with The Boeing Company requires access to detailed contract databases. However, it's common for major defense platforms like the Super Hornet to undergo continuous upgrades and sustainment efforts over their operational lifespan. This often translates to consistent, multi-year contract awards for modifications, upgrades, and maintenance. The total value of such contracts can run into billions of dollars over decades, reflecting the complexity and ongoing needs of advanced military aircraft. Without specific historical data, it's difficult to provide precise figures, but the nature of defense procurement suggests substantial and recurring investment in platforms like the F/A-18 E/F.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types for similar defense modifications?

The Cost Plus Fixed Fee (CPFF) contract type is common in defense procurement, particularly for research, development, and complex modifications where the scope of work may evolve or is not fully defined at the outset. In CPFF, the contractor is reimbursed for allowable costs plus a predetermined fixed fee representing profit. This contrasts with Fixed Price contracts, where the price is set regardless of actual costs, offering greater cost certainty to the government but potentially higher risk for the contractor. Incentive Fee contracts aim to align contractor performance with government objectives by adjusting the fee based on performance metrics. For modifications, CPFF can be advantageous when technical uncertainties are high, but it places a greater burden on government oversight to control costs and ensure value for money compared to fixed-price arrangements.

What are the key performance indicators (KPIs) typically used to assess the success of aircraft modification contracts?

Key Performance Indicators (KPIs) for aircraft modification contracts typically focus on schedule adherence, cost control, technical performance, and quality. Schedule adherence might be measured by on-time delivery of modified aircraft or completion of modification phases. Cost control is assessed by comparing actual costs against the estimated costs or budget, especially critical in CPFF contracts. Technical performance KPIs could include the successful integration of new systems, achievement of desired performance enhancements (e.g., range, payload, survivability), and reliability of the modified systems. Quality is often measured by defect rates, rework required, and adherence to specifications. For the F/A-18 E/F modifications, specific KPIs would be detailed in the contract's Statement of Work (SOW) and Performance Work Statement (PWS).

What is The Boeing Company's track record with the F/A-18 E/F program and similar defense contracts?

The Boeing Company has a long-standing and extensive track record with the F/A-18 E/F Super Hornet program, having been the prime contractor for its development and production. They have consistently delivered these aircraft to the U.S. Navy and international partners. Their experience extends to numerous modifications, upgrades, and sustainment efforts for the Super Hornet fleet over many years. Beyond the F/A-18, Boeing has a vast portfolio of complex defense contracts, including other major aircraft programs like the F-15, and various support and modernization efforts for military platforms. While specific performance metrics for individual contracts vary, Boeing is generally recognized as a major, experienced defense contractor with deep expertise in aerospace manufacturing and systems integration.

What are the potential risks associated with a sole-source award for critical defense systems like the F/A-18 E/F?

Sole-source awards for critical defense systems like the F/A-18 E/F modifications carry several inherent risks. The most significant is the lack of competition, which can lead to higher prices than might be achieved through a competitive bidding process. This reduces the government's leverage in price negotiations. Another risk is contractor complacency; without the threat of losing future business to competitors, the sole-source provider might be less motivated to innovate or optimize efficiency. Furthermore, reliance on a single supplier creates a vulnerability in the supply chain. If the sole-source contractor experiences production issues, financial difficulties, or faces geopolitical disruptions, the government's ability to maintain and upgrade its critical assets could be severely impacted. This necessitates robust government oversight and contingency planning.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 6211 AVIATION AVE, JACKSONVILLE, FL, 32221

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: $12,324,314

Exercised Options: $12,324,314

Current Obligation: $12,324,314

Actual Outlays: $411,208

Subaward Activity

Number of Subawards: 25

Total Subaward Amount: $6,426,437

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001919D0003

IDV Type: IDC

Timeline