Boeing awarded $47.6M for F/A-18 E/F modifications, a sole-source contract for aircraft manufacturing

Contract Overview

Contract Amount: $47,605,336 ($47.6M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2020-08-12

End Date: 2026-06-30

Contract Duration: 2,148 days

Daily Burn Rate: $22.2K/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 $47.6 million to THE BOEING COMPANY for work described as: F/A-18 E/F MODIFICATIONS Key points: 1. Contract awarded to a single, established provider, potentially limiting price competition. 2. Focus on modifications suggests ongoing sustainment and upgrade needs for the F/A-18 fleet. 3. Cost-plus-fixed-fee structure may incentivize cost control by the contractor. 4. Long performance period indicates a significant, multi-year effort. 5. Geographic concentration in Florida for contract performance. 6. No small business set-aside noted, suggesting prime contractor is a large entity.

Value Assessment

Rating: fair

Benchmarking the value of this specific modification contract is challenging without detailed scope of work and comparison to similar F/A-18 upgrade packages. The cost-plus-fixed-fee (CPFF) pricing structure means the government pays the actual costs plus a fixed fee, which can lead to cost overruns if not managed tightly. While CPFF can be appropriate for R&D or uncertain scope, it requires robust oversight to ensure value. Without comparable data, assessing if the $47.6 million represents a good deal is difficult, but the fixed fee component provides some cost predictability.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This typically occurs when only one vendor possesses the necessary technical expertise, proprietary data, or unique capabilities required for the specific work. The lack of competition means the government did not solicit bids from multiple sources, potentially impacting the ability to secure the lowest possible price through market forces.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as competitive pressures are absent. The government must rely on strong negotiation and oversight to ensure fair pricing.

Public Impact

The U.S. Navy is the primary beneficiary, receiving modifications to its F/A-18 E/F Super Hornet fleet. Services delivered include modifications to enhance or sustain the operational capabilities of fighter aircraft. Contract performance is concentrated in Florida, impacting the local aerospace workforce and economy. The sustainment of advanced fighter aircraft directly supports national defense readiness.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced value for taxpayer dollars.
Cost-plus-fixed-fee contracts require diligent oversight to prevent cost escalation beyond initial estimates.
Sole-source nature limits opportunities for new entrants or smaller businesses to participate in this specific contract.

Positive Signals

Award to a single, experienced contractor (Boeing) suggests a focus on leveraging existing expertise for critical aircraft modifications.
The fixed fee component provides a degree of cost certainty for the government, assuming the base costs are well-managed.
Long contract duration allows for planned, phased upgrades and sustainment activities.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and long product lifecycles. Aircraft manufacturing, particularly for advanced military platforms like the F/A-18, is dominated by a few large, established prime contractors. This contract fits within the sustainment and upgrade segment of the defense industrial base, where modifications are crucial for maintaining fleet readiness and incorporating technological advancements. Spending in this area is substantial, reflecting the ongoing need to modernize and maintain aging military aircraft fleets.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the sole-source nature and the prime contractor being The Boeing Company, it is unlikely that significant subcontracting opportunities for small businesses will be mandated through this specific award. While Boeing may engage small businesses in its broader supply chain, this contract itself does not appear designed to directly benefit the small business ecosystem.

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. The cost-plus-fixed-fee structure necessitates rigorous financial oversight to track costs and ensure the fixed fee is earned appropriately. Transparency may be limited due to the sole-source nature, but contract modifications and performance reports should be available through federal procurement databases.

Related Government Programs

F/A-18 Super Hornet Program
Naval Aviation Sustainment
Aircraft Modification Contracts
Defense Contractor Performance

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Potential for cost overruns without strict oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $47.6 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 $47.6 million.

What is the period of performance?

Start: 2020-08-12. End: 2026-06-30.

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

Analyzing historical spending requires access to detailed contract databases beyond this single award. However, the F/A-18 E/F Super Hornet has been in service for many years, undergoing continuous upgrades and sustainment. It is reasonable to assume that The Boeing Company, as the prime contractor, has received substantial funding over the years for various modifications, maintenance, and support services related to this platform. Trends would likely show consistent, significant investment in sustainment and modernization, potentially increasing as the fleet ages and requires more extensive upkeep or technological integration. Specific year-over-year spending figures would need to be extracted from sources like the Federal Procurement Data System (FPDS) or USAspending.gov.

How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for aircraft modifications?

The Cost-Plus-Fixed-Fee (CPFF) contract type is often used when the scope of work is not precisely defined or involves research and development, making it difficult to estimate costs accurately upfront. In CPFF, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This contrasts with Fixed-Price contracts, where the price is set regardless of the final cost, incentivizing contractor efficiency but carrying higher risk for the contractor if costs escalate. For aircraft modifications, if the modifications are well-defined and standard, a Firm-Fixed-Price (FFP) contract might offer better value. However, if the modifications involve novel technologies or uncertain technical challenges, CPFF can be appropriate, provided robust government oversight is in place to manage costs and ensure the fixed fee remains reasonable relative to the effort.

What are the potential risks associated with sole-source awards for defense systems?

Sole-source awards, like this one for F/A-18 modifications, carry several risks. The primary risk is the potential for inflated pricing due to the absence of competitive bidding. Without competing offers, the government may pay more than it would in a competitive environment. Another risk is reduced innovation, as there is less pressure on the incumbent contractor to develop cost-saving efficiencies or introduce new technologies. Furthermore, sole-source contracts can create vendor lock-in, making it difficult and costly to switch providers in the future. Dependence on a single supplier can also pose supply chain risks if that supplier faces financial difficulties or production issues. Effective negotiation and stringent oversight are critical to mitigate these risks.

What is The Boeing Company's track record with F/A-18 modifications and sustainment?

The Boeing Company has an extensive and long-standing track record with the F/A-18 program, having served as the prime contractor for the Super Hornet variants. They are responsible for the design, production, and sustainment of these aircraft. Their history includes numerous modifications, upgrades, and maintenance programs aimed at enhancing the capabilities and extending the service life of the F/A-18 fleet for the U.S. Navy and international partners. While specific performance metrics for individual contracts are not publicly detailed, Boeing's continued role as the primary provider suggests a generally satisfactory performance history in delivering these complex modifications and sustainment services.

What are the implications of awarding modifications to an aging aircraft platform like the F/A-18?

Awarding modifications to an aging platform like the F/A-18 signifies a strategic decision to extend its operational lifespan and maintain its relevance amidst evolving threats and technologies. This approach is often more cost-effective in the short-to-medium term than procuring entirely new platforms. However, it also presents challenges. As aircraft age, the cost and complexity of maintenance and modifications tend to increase due to wear and tear, obsolescence of components, and the need for more extensive structural repairs. Furthermore, integrating new technologies onto older airframes can be technically demanding. These modifications aim to bridge the gap until newer generation aircraft are fully fielded or to ensure the F/A-18 remains a capable asset for specific roles.

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: $47,605,336

Exercised Options: $47,605,336

Current Obligation: $47,605,336

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $930,008

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