Boeing awarded $3.57B for F/A-18E/F & EA-18G sustainment, a sole-source contract

Contract Overview

Contract Amount: $3,575,341 ($3.6M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2025-01-01

End Date: 2026-12-31

Contract Duration: 729 days

Daily Burn Rate: $4.9K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: F/A-18E/F & EA-18G FSR'S

Place of Performance

Location: JACKSONVILLE, DUVAL County, FLORIDA, 32221

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $3.6 million to THE BOEING COMPANY for work described as: F/A-18E/F & EA-18G FSR'S Key points: 1. Sustainment contract awarded to incumbent provider, raising questions about potential cost efficiencies. 2. Sole-source nature limits opportunities for competitive pricing and innovation from other market players. 3. Contract duration of two years suggests a focus on immediate operational readiness. 4. Geographic concentration in Florida for sustainment activities. 5. Cost-plus-fixed-fee structure may incentivize cost escalation if not closely monitored. 6. Lack of competition indicates a potential reliance on a single supplier for critical aircraft components.

Value Assessment

Rating: questionable

This contract's value is difficult to benchmark due to its sole-source nature. Without competitive bids, it's challenging to determine if the pricing reflects fair market value. The cost-plus-fixed-fee structure requires rigorous oversight to ensure costs are controlled and that the fixed fee remains reasonable for the services rendered. Historical data on similar sustainment contracts for advanced fighter jets would be needed for a more precise comparison, but the absence of competition inherently limits the government's leverage in price negotiation.

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 is typically used when a specific capability or product is only available from a single source, or in cases of urgent and compelling need. The lack of competition means that the government did not benefit from a bidding process that could drive down prices or encourage innovative solutions from multiple providers. This can lead to higher costs for taxpayers.

Taxpayer Impact: The absence of competition means taxpayers are likely paying a premium, as there was no market pressure to reduce costs. This also limits the government's ability to explore potentially more cost-effective solutions from other qualified vendors.

Public Impact

The U.S. Navy's operational readiness for its F/A-18E/F Super Hornet and EA-18G Growler fleets will be supported. This contract ensures the continued availability of critical aircraft for national defense missions. Sustainment activities will primarily impact the workforce and infrastructure in Florida. The contract supports the long-term viability of advanced naval aviation capabilities.

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 type requires robust oversight to prevent cost overruns.
Long-term reliance on a single provider could create vendor lock-in.
Lack of competition may stifle innovation in sustainment services.

Positive Signals

Ensures continued operational readiness of critical naval aircraft.
Leverages incumbent contractor's established expertise and infrastructure.
Contract duration provides stability for sustainment planning.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and long product lifecycles. Sustainment contracts like this are crucial for maintaining the operational readiness of complex military platforms. The market for fighter jet sustainment is often dominated by the original equipment manufacturers due to proprietary knowledge and specialized tooling. Comparable spending benchmarks for similar aircraft sustainment programs are typically in the billions of dollars over the life of the platform.

Small Business Impact

This contract does not appear to include specific small business set-asides. Given the sole-source nature and the specialized requirements of military aircraft sustainment, it is unlikely that small businesses would be directly contracted for the primary services. However, The Boeing Company may engage small businesses as subcontractors for specific components or services, though this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract will likely be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The cost-plus-fixed-fee structure necessitates detailed financial reporting and auditing by the agency to verify costs and ensure the fixed fee is justified. Transparency will depend on the agency's reporting practices and any public disclosures made regarding contract performance and expenditures.

Related Government Programs

F/A-18 Super Hornet Program
EA-18G Growler Program
Naval Aviation Sustainment
Aircraft Component Manufacturing
Defense Logistics and Maintenance

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Potential for cost overruns without strict oversight
Lack of competitive bidding limits price discovery

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $3.6 million to THE BOEING COMPANY. F/A-18E/F & EA-18G FSR'S

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 $3.6 million.

What is the period of performance?

Start: 2025-01-01. End: 2026-12-31.

What is Boeing's track record with F/A-18E/F and EA-18G sustainment contracts?

The Boeing Company has a long-standing relationship with the U.S. Navy as the prime contractor for the F/A-18E/F Super Hornet and EA-18G Growler aircraft. This includes extensive experience in manufacturing, integration, and sustainment services for these platforms. Historically, Boeing has been responsible for providing maintenance, repair, and overhaul (MRO) services, as well as spare parts and technical support. While specific performance metrics for past sustainment contracts are not detailed here, Boeing's continued role as the sole-source provider suggests a level of satisfaction with their capabilities and performance in meeting the Navy's requirements for these critical assets. However, the absence of competition in this current award means that direct comparisons of performance against other potential sustainment providers are not available.

How does the $3.57 billion value compare to similar aircraft sustainment contracts?

Benchmarking the $3.57 billion value of this two-year sustainment contract for the F/A-18E/F and EA-18G requires context regarding the scope of services and the number of aircraft supported. Sustainment costs for advanced military aircraft are typically substantial, often running into hundreds of millions or even billions of dollars annually, depending on fleet size, operational tempo, and the complexity of the aircraft. For instance, other major fighter aircraft sustainment programs, such as those for the F-35 or F-22, involve significant annual expenditures. Given that this contract covers a two-year period for two distinct but related aircraft types, the $3.57 billion figure suggests an average annual spend of approximately $1.785 billion. This aligns with the high costs associated with maintaining sophisticated naval aviation platforms, though a precise comparison would necessitate detailed breakdowns of included services and fleet numbers.

What are the primary risks associated with a sole-source sustainment contract of this magnitude?

The primary risk associated with a sole-source sustainment contract of this magnitude is the lack of competitive pressure, which can lead to inflated costs for the government and taxpayers. Without competing bids, there is less incentive for the contractor to optimize efficiency or offer the most cost-effective solutions. Another significant risk is vendor lock-in; the government becomes heavily reliant on a single provider, potentially limiting its flexibility in future contract negotiations or technology upgrades. Furthermore, if the sole-source provider experiences financial difficulties or operational disruptions, it could severely impact the readiness of the supported aircraft, posing a national security risk. The cost-plus-fixed-fee structure also introduces a risk of cost escalation if not managed with stringent oversight, as the contractor is reimbursed for allowable costs plus a negotiated fee.

How effective is the cost-plus-fixed-fee (CPFF) contract type for ensuring value for money in sustainment?

The Cost-Plus-Fixed-Fee (CPFF) contract type aims to balance risk between the government and the contractor. The government agrees to pay the contractor's actual allowable costs plus a fixed fee, which represents the contractor's profit. This structure can be effective in ensuring value for money when the scope of work is not precisely defined or is subject to change, as is often the case with complex sustainment operations. It incentivizes the contractor to control costs because the fee remains constant regardless of the final cost incurred. However, its effectiveness hinges critically on robust government oversight. Without diligent monitoring of allowable costs, auditing of expenses, and clear performance metrics, there is a risk that costs could be inflated, or the contractor might not be sufficiently motivated to achieve maximum efficiency, thereby diminishing the value for money.

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

Historical spending on F/A-18E/F Super Hornet and EA-18G Growler sustainment has been substantial, reflecting the operational demands and complexity of these advanced naval aircraft. While specific annual figures fluctuate based on fleet readiness requirements, operational tempo, and modernization efforts, the U.S. Navy has consistently allocated significant portions of its budget to ensure the airworthiness and operational availability of these platforms. Over the past decade, annual sustainment costs for these aircraft types have often been in the range of several hundred million to over a billion dollars per year, depending on the specific fiscal year and the scope of maintenance and support activities undertaken. This current $3.57 billion contract for a two-year period is consistent with these historical high-value sustainment expenditures.

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: N0001923R0009

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: $3,575,341

Exercised Options: $3,575,341

Current Obligation: $3,575,341

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001924D0105

IDV Type: IDC

Timeline