Boeing awarded $20.4M for recurring engineering services to support E-3 aircraft
Contract Overview
Contract Amount: $20,438,096 ($20.4M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2009-12-29
End Date: 2010-12-31
Contract Duration: 367 days
Daily Burn Rate: $55.7K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: CY10 E-3 RECURRING ENGINEERING SERVICES
Place of Performance
Location: TUKWILA, KING County, WASHINGTON, 98108
Plain-Language Summary
Department of Defense obligated $20.4 million to THE BOEING COMPANY for work described as: CY10 E-3 RECURRING ENGINEERING SERVICES Key points: 1. Contract awarded to a single, established provider, raising questions about competitive pricing. 2. Fixed-price contract type offers some cost certainty but may limit flexibility. 3. Short contract duration suggests a specific, time-bound need for engineering support. 4. Focus on recurring engineering indicates ongoing maintenance and upgrade requirements. 5. Lack of competition may lead to higher costs than a more open bidding process. 6. The contract falls under aircraft manufacturing, a sector with significant defense spending.
Value Assessment
Rating: fair
The contract value of $20.4 million for one year of recurring engineering services for the E-3 aircraft appears within a reasonable range for specialized aerospace support. However, without a competitive bidding process, it is difficult to definitively benchmark the value for money. The firm fixed-price structure provides cost predictability for the Air Force. Comparisons to similar recurring engineering contracts for other aircraft platforms would be necessary for a more robust assessment of pricing efficiency.
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 a specific contractor possesses unique capabilities, intellectual property, or is the only viable source for the required services. The lack of competition means the Air Force did not benefit from multiple bids to drive down prices or explore alternative solutions, potentially impacting price discovery.
Taxpayer Impact: For taxpayers, a sole-source award means there is a higher risk of paying a premium compared to a competitively bid contract. The absence of competing offers limits the government's leverage in price negotiations.
Public Impact
The primary beneficiaries are the Department of the Air Force and the E-3 Sentry Airborne Warning and Control System (AWACS) program. Services delivered include essential recurring engineering support, crucial for maintaining the operational readiness of the E-3 fleet. The geographic impact is likely concentrated around E-3 operational bases and Boeing's engineering facilities. Workforce implications include the employment of specialized engineers and technical personnel at Boeing.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may result in inflated costs for taxpayers.
- Sole-source awards can reduce government leverage in price negotiations.
- Limited transparency into the justification for sole-source award.
Positive Signals
- Firm fixed-price contract provides cost certainty.
- Award to an established contractor with likely relevant expertise.
- Focus on recurring engineering addresses ongoing operational needs.
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on aircraft manufacturing and support services. The market for specialized engineering services for legacy aircraft like the E-3 is often dominated by the original equipment manufacturers or their authorized partners due to proprietary knowledge and technical expertise. Spending in this area is critical for maintaining the operational readiness of aging military fleets.
Small Business Impact
This contract does not appear to have a small business set-aside component, as it was awarded to The Boeing Company. There is no immediate indication of subcontracting opportunities for small businesses within the provided data. The focus on a large, prime contractor suggests that the primary work will be performed by Boeing's internal engineering teams.
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 specified services within the agreed-upon price. Transparency regarding the justification for the sole-source award would be a key aspect of oversight.
Related Government Programs
- E-3 Sentry Program
- Airborne Warning and Control System (AWACS)
- Aerospace Engineering Services
- Aircraft Maintenance and Sustainment
Risk Flags
- Sole-source award lacks competitive pricing.
- Potential for cost overruns if contractor efficiency is low.
- Limited transparency on specific service details.
Tags
defense, department-of-defense, department-of-the-air-force, aircraft-manufacturing, recurring-engineering-services, sole-source, firm-fixed-price, large-contractor, e-3-sentry, cy10
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $20.4 million to THE BOEING COMPANY. CY10 E-3 RECURRING ENGINEERING SERVICES
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 $20.4 million.
What is the period of performance?
Start: 2009-12-29. End: 2010-12-31.
What is the historical spending trend for recurring engineering services for the E-3 Sentry program?
Analyzing historical spending for E-3 recurring engineering services requires access to detailed contract databases beyond this single award. However, given the E-3's long service life and the nature of maintaining complex avionics and airframes, it is reasonable to assume that recurring engineering costs have been a consistent expenditure for the Air Force over many years. These costs typically fluctuate based on upgrade cycles, component obsolescence issues, and overall fleet readiness initiatives. Without specific historical data, it's difficult to determine if the $20.4 million for CY10 represents an increase, decrease, or stable level of spending compared to previous years. Trends would likely show peaks during major modernization efforts and potentially lower, steady spending for routine sustainment.
What specific engineering services are included under this contract?
The contract specifies 'RECURRING ENGINEERING SERVICES' for the E-3 Sentry aircraft. While the data does not detail the exact services, recurring engineering typically encompasses a range of activities necessary for the ongoing sustainment and operational effectiveness of an aircraft platform. This can include troubleshooting complex technical issues, developing engineering change proposals (ECPs), providing technical support for modifications and repairs, analyzing system performance, investigating component failures, and updating technical data packages. Essentially, it covers the continuous engineering effort required to keep the E-3 fleet mission-capable and address emergent technical challenges throughout its operational life.
What is the justification for awarding this contract on a sole-source basis to The Boeing Company?
The provided data indicates the contract was 'NOT AVAILABLE FOR COMPETITION,' implying a sole-source award. The justification for such awards typically rests on factors like unique technical expertise, proprietary data or technology, essential follow-on support for previously supplied systems, or the lack of adequate competition within a reasonable timeframe. For the E-3 Sentry, Boeing, as a major aerospace manufacturer and likely the original integrator or a key sustainment partner, would possess intimate knowledge of the aircraft's complex systems, including its specialized mission equipment. This specialized knowledge, potentially coupled with proprietary technical data, often makes them the only viable source for critical engineering services, thereby necessitating a sole-source procurement.
How does the firm fixed-price (FFP) contract type mitigate risk for the Air Force?
The Firm Fixed-Price (FFP) contract type offers significant risk mitigation for the Air Force by establishing a ceiling on the total cost of the services. Under an FFP agreement, the contractor, The Boeing Company, assumes the primary responsibility for all costs incurred and for achieving a profit. This means that if Boeing's costs exceed the negotiated price, their profit margin will decrease, but the government's payment obligation remains fixed. This structure incentivizes the contractor to manage costs efficiently and perform the work within the agreed budget. It provides the Air Force with budget certainty and predictability, making financial planning more straightforward compared to cost-reimbursement contracts where costs can escalate.
What is the potential impact of this contract on the E-3 Sentry's operational readiness?
This contract for recurring engineering services is directly linked to maintaining and improving the operational readiness of the E-3 Sentry fleet. The E-3 is a critical asset for airborne warning and control, and its complex systems require continuous technical support to ensure reliability and mission effectiveness. By securing these engineering services, the Air Force aims to address potential technical issues, implement necessary modifications or upgrades, and ensure that the aircraft's systems function as intended. Effective recurring engineering support can reduce downtime, prevent mission failures due to technical malfunctions, and extend the overall service life of the E-3 aircraft, thereby bolstering its readiness posture.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 7755 E MARGINAL WAY S, SEATTLE, WA, 98108
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $20,438,096
Exercised Options: $20,438,096
Current Obligation: $20,438,096
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: F1962801D0016
IDV Type: IDC
Timeline
Start Date: 2009-12-29
Current End Date: 2010-12-31
Potential End Date: 2010-12-31 00:00:00
Last Modified: 2019-04-20
More Contracts from THE Boeing Company
- KC-X Modernization Program — $32.0B (Department of Defense)
- International Space Station — $22.4B (National Aeronautics and Space Administration)
- 200112!000108!9700!ZD60 !ballistic Missile Defense ORG. !HQ000601C0001 !A!N!*!N! !20001222!20080930!848025649!848025649!009256819!n!the Boeing Company !3370 E Miraloma AVE !anaheim !ca!92806!37000!089!01!huntsville !madison !alabama !+000383571022!n!n!000000000000!ad93!rdte/Other Defense-Adv Tech DEV !S1 !services !1caa!ballistic Missile Defense SYS !541710!*!*!3! ! ! !*!*!*!B!*!*!A! !A !U!R!2!001!B! !Z!Y!Z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! — $18.8B (Department of Defense)
- USN P-8A FRP II Long Lead Material — $18.1B (Department of Defense)
- 200512!010860!2100!w56hzv!tacom - Warren !w56hzv05c0724 !A!N! !Y! ! !20050923!20141231!016544780!016544780!009256819!n!the Boeing Company !J S Mcdonnell Blvd !saint Louis !mo!63166!65000!510!29!st. Louis !ST. Louis (city) !missouri !+000219245691!n!n!000000000000!az15!rdte/Other Research&development-Eng/Manuf Devel !S1 !services !301 !FCS !541330!E! !1! ! ! ! ! !20200930!B! ! !A! !d!u!u!1!001!n!1a!z!y!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! ! TAS::21 2040::TAS — $12.7B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)