Boeing awarded $20.9M for C-17 LAIRCM UCA, a sole-source contract for aircraft manufacturing
Contract Overview
Contract Amount: $20,932,866 ($20.9M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2014-04-14
End Date: 2015-12-31
Contract Duration: 626 days
Daily Burn Rate: $33.4K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: C-17 LAIRCM UCA
Place of Performance
Location: HUNTINGTON BEACH, ORANGE County, CALIFORNIA, 92647
Plain-Language Summary
Department of Defense obligated $20.9 million to THE BOEING COMPANY for work described as: C-17 LAIRCM UCA Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. The contract is for a specific aircraft modification, suggesting specialized needs. 3. Performance period spans over 1.5 years, indicating a moderate-term project. 4. The contract type is Firm Fixed Price, shifting cost risk to the contractor. 5. No small business set-aside was applied to this procurement. 6. The contract falls under the Aircraft Manufacturing NAICS code.
Value Assessment
Rating: questionable
As a sole-source award, direct price comparisons to similar contracts are difficult. The firm fixed price structure aims to control costs, but the lack of competition may have led to a higher price than if multiple bids were solicited. Benchmarking value is challenging without competitive data, but the specialized nature of the modification could justify the cost if it addresses a critical capability gap.
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 only one source is capable of meeting the requirement, often due to proprietary technology, unique capabilities, or urgent needs. The lack of competition limits the government's ability to leverage market forces for the best possible price.
Taxpayer Impact: Taxpayers may not have received the most competitive pricing due to the absence of multiple bids. The government's negotiating position is weakened without alternative offers.
Public Impact
The primary beneficiary is the U.S. Air Force, receiving a critical aircraft modification. The service delivered is the integration of the Large Aircraft Infrared Countermeasures (LAIRCM) system onto C-17 aircraft. The geographic impact is primarily within California, where the contract was awarded. Workforce implications include specialized manufacturing and integration roles within The Boeing Company.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pricing benefits for taxpayers.
- Lack of transparency in the justification for sole-source procurement.
- Potential for cost overruns if not closely managed due to lack of competition.
Positive Signals
- Firm Fixed Price contract shifts cost risk to the contractor.
- Award to a known prime contractor for C-17 modifications.
- Modification addresses a critical defense capability (countermeasures).
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft modifications. The market for such specialized defense systems is often dominated by a few large prime contractors due to high barriers to entry, including technological expertise, security clearances, and existing relationships with the Department of Defense. Spending in this area is driven by national security requirements and the need to maintain and upgrade existing fleets.
Small Business Impact
This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal, unless Boeing engages small businesses as subcontractors for specific components or services.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Accountability measures are inherent in the Firm Fixed Price contract type, requiring Boeing to deliver the specified modifications within the agreed-upon price. Transparency is limited by the sole-source nature of the award, but contract modifications and performance reports would be subject to internal government review.
Related Government Programs
- C-17 Globemaster III Sustainment Partnership
- Aircraft Modification Contracts
- Avionics and Electronic Warfare Systems
- Department of Defense Aircraft Procurement
Risk Flags
- Sole-source award
- Lack of competitive bidding
Tags
defense, department-of-defense, air-force, aircraft-manufacturing, sole-source, firm-fixed-price, california, c-17, laircm, modification
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $20.9 million to THE BOEING COMPANY. C-17 LAIRCM UCA
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 Air Force).
What is the total obligated amount?
The obligated amount is $20.9 million.
What is the period of performance?
Start: 2014-04-14. End: 2015-12-31.
What is the specific justification for awarding this contract on a sole-source basis to The Boeing Company?
The provided data indicates the contract was 'NOT COMPETED'. While the specific justification is not detailed, sole-source awards are typically made when only one responsible source is available or capable of meeting the requirement. For defense contracts involving specialized aircraft modifications like the C-17 LAIRCM UCA, this could be due to proprietary technology, unique manufacturing capabilities held by Boeing as the original equipment manufacturer, or urgent operational needs that preclude a lengthy competitive bidding process. A formal Justification for Other Than Full and Open Competition (JOFOC) would normally be required and documented by the agency.
How does the Firm Fixed Price (FFP) contract type benefit the government in this scenario?
The Firm Fixed Price (FFP) contract type is generally advantageous for the government when the scope of work is well-defined and the contractor can reasonably estimate costs. In this case, it shifts the primary risk of cost overruns from the government to The Boeing Company. Boeing is obligated to complete the modification for the agreed-upon price, regardless of their actual costs. This provides cost certainty for the government and incentivizes the contractor to manage its expenses efficiently. However, the benefit is somewhat tempered by the sole-source nature of the award, as the initial price negotiation is not informed by competitive offers.
What are the potential risks associated with a sole-source award for aircraft modifications?
The primary risk associated with a sole-source award is the potential for paying a higher price than would be achieved through competition. Without competing bids, the government may lack leverage to negotiate the lowest possible price. Additionally, there's a risk of complacency from the awarded contractor, as they face no direct competitive pressure to innovate or improve efficiency. Oversight becomes even more critical to ensure the contractor is performing diligently and that the price remains fair and reasonable, even without market benchmarks.
Can the value of this $20.9 million contract be benchmarked against similar C-17 modification contracts?
Benchmarking the value of this $20.9 million contract is challenging without access to detailed pricing data from comparable sole-source or competitively awarded contracts for similar C-17 modifications. The 'LAIRCM UCA' designation suggests a specific upgrade related to Large Aircraft Infrared Countermeasures, which is a specialized system. If this is a unique integration or upgrade, direct comparisons might be scarce. However, one could look at historical spending on C-17 upgrades, avionics installations, or other major modification efforts by the Air Force to establish a general sense of scale and cost per aircraft, while acknowledging that specific system costs and labor hours will vary significantly.
What is the expected impact of this contract on the operational readiness of the C-17 fleet?
The integration of the Large Aircraft Infrared Countermeasures (LAIRCM) system is intended to enhance the survivability of C-17 aircraft against infrared-guided missiles. By providing advanced threat detection and countermeasures, this modification directly contributes to the operational readiness and safety of the aircrews operating these critical transport assets. Improved survivability allows the C-17s to operate more effectively in contested environments, ensuring the continued ability of the Air Force to conduct global mobility missions, which is vital for national security and logistical support.
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: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 14441 ASTRONAUTICS LN, HUNTINGTON BEACH, CA, 92647
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: $21,006,464
Exercised Options: $21,006,464
Current Obligation: $20,932,866
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA852612D0001
IDV Type: IDC
Timeline
Start Date: 2014-04-14
Current End Date: 2015-12-31
Potential End Date: 2015-12-31 00:00:00
Last Modified: 2024-09-16
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