Boeing awarded $111.4M for F-18 E/F/G aircraft components, with limited competition

Contract Overview

Contract Amount: $111,431,620 ($111.4M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2018-07-26

End Date: 2026-06-30

Contract Duration: 2,896 days

Daily Burn Rate: $38.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: F-18 E/F/G FCS

Place of Performance

Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $111.4 million to THE BOEING COMPANY for work described as: F-18 E/F/G FCS Key points: 1. Contract awarded to a single source, raising questions about price competitiveness. 2. Long contract duration of nearly 10 years suggests potential for cost overruns. 3. Firm Fixed Price contract type offers some cost certainty but may limit flexibility. 4. Focus on aircraft parts indicates a critical role in maintaining fleet readiness. 5. Geographic concentration in Missouri for contract performance. 6. No small business set-aside, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: fair

The contract value of $111.4 million for F-18 E/F/G aircraft components appears substantial. However, without detailed breakdowns of the specific parts and quantities, a direct value-for-money assessment is challenging. The firm fixed-price structure provides some predictability, but the lack of competition means there's no direct market benchmark to assess if the pricing is optimal. The long duration could lead to price escalations if not managed carefully.

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 need. The lack of competition means that taxpayers do not benefit from the price discovery that occurs in a competitive bidding process, potentially leading to higher costs.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible price, as there is no competitive pressure on the contractor to offer the lowest bid. This can result in taxpayers paying a premium for goods and services.

Public Impact

The primary beneficiaries are the U.S. Navy and Marine Corps, who rely on these components to maintain the operational readiness of their F/A-18 E/F/G Super Hornet and Growler aircraft. The contract ensures the continued supply of critical aircraft parts and auxiliary equipment, supporting the sustainment of a significant portion of the U.S. tactical aviation fleet. Performance is concentrated in Missouri, potentially supporting local jobs and the aerospace manufacturing ecosystem in that region. The contract's duration implies a long-term commitment to supporting these aircraft platforms, impacting the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Long contract duration (nearly 10 years) increases the risk of cost growth and potential inefficiencies.
Lack of small business participation may limit the broader economic impact and innovation.
Absence of specific performance metrics makes it difficult to assess the contractor's efficiency and effectiveness.
Reliance on a single contractor for critical components could create supply chain vulnerabilities.

Positive Signals

Firm Fixed Price contract type offers cost certainty for the government, assuming the scope is well-defined.
The contract is with a major defense contractor (Boeing), suggesting established manufacturing capabilities and experience with the F/A-18 platform.
The contract supports the sustainment of essential military aircraft, contributing directly to national defense readiness.
The long duration indicates a stable, long-term relationship which can foster specialized expertise.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The market for specialized military aircraft components is often characterized by high barriers to entry, significant R&D investment, and a limited number of qualified suppliers, especially for legacy platforms like the F/A-18. Spending in this area is critical for maintaining fleet readiness and supporting national security objectives. Comparable spending benchmarks would typically involve other sustainment contracts for major weapon systems.

Small Business Impact

This contract does not appear to include a small business set-aside, nor is there an indication of specific subcontracting goals for small businesses. The award to a large prime contractor like Boeing suggests that the primary focus is on leveraging established capabilities. This could limit opportunities for small businesses to participate directly in this contract, although they may be involved further down the supply chain if Boeing utilizes them for certain components or services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense and the Defense Logistics Agency. As a sole-source award, scrutiny may be higher regarding pricing justification and performance monitoring. Transparency is facilitated through contract databases, but detailed operational oversight and accountability measures are internal to the agency and contractor. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

F/A-18 Super Hornet Program
F/A-18 E/F Sustainment Contracts
Defense Logistics Agency Aviation Support
Naval Air Systems Command (NAVAIR) Contracts
Aircraft Parts Manufacturing Contracts

Risk Flags

Sole-source award
Long contract duration
Lack of competition
Potential for cost overruns
Supply chain dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $111.4 million to THE BOEING COMPANY. F-18 E/F/G FCS

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 Logistics Agency).

What is the total obligated amount?

The obligated amount is $111.4 million.

What is the period of performance?

Start: 2018-07-26. End: 2026-06-30.

What is the historical spending trend for F-18 E/F/G aircraft components with The Boeing Company?

Analyzing historical spending requires access to detailed contract databases beyond this single award. However, the total value of $111.4 million over a nearly 10-year period suggests an average annual spend of approximately $11-12 million. This figure would need to be compared against previous contract awards for similar components to identify trends. Significant increases or decreases in annual spending could indicate changes in fleet size, operational tempo, component reliability, or pricing adjustments. Without prior data, it's difficult to ascertain if this represents an increase, decrease, or stable level of investment compared to past sustainment efforts for the F-18 platform.

How does the pricing of this contract compare to similar F-18 component contracts awarded competitively?

A direct comparison of pricing is challenging due to the sole-source nature of this award and the lack of specific component details. Competitive contracts typically yield lower prices due to market forces. To benchmark this contract, one would need to identify comparable contracts for the same or similar F-18 components that were awarded through full and open competition. Analyzing the per-unit costs or total costs for equivalent items procured competitively would reveal potential price differences. Given the absence of competition here, it is reasonable to assume that the pricing may be higher than what could be achieved in a competitive environment.

What are the specific risks associated with a sole-source award for critical aircraft components?

The primary risk of a sole-source award for critical aircraft components is the potential for inflated pricing due to the lack of competitive pressure. This can lead to reduced value for taxpayer money. Another significant risk is supply chain vulnerability; reliance on a single supplier can create dependencies that are problematic if the supplier faces production issues, financial instability, or geopolitical disruptions. Furthermore, without competition, there may be less incentive for the contractor to innovate or improve efficiency, potentially leading to suboptimal performance over the long contract duration. The government also loses the opportunity to foster a broader base of qualified suppliers.

What is the expected impact of this contract on the operational readiness of the F-18 fleet?

This contract is directly intended to enhance the operational readiness of the F-18 E/F/G Super Hornet and Growler aircraft. By ensuring the continued supply of necessary components and auxiliary equipment, it supports the maintenance, repair, and overall sustainment of these critical platforms. Consistent availability of parts is crucial for minimizing aircraft downtime and maximizing the time available for training, deployment, and combat missions. The long duration suggests a commitment to maintaining these aircraft for the foreseeable future, thereby underpinning their readiness levels.

What oversight mechanisms are in place to ensure performance and cost control for this sole-source contract?

Oversight for this sole-source contract would typically involve a combination of contract administration by the Defense Logistics Agency (DLA) or Naval Air Systems Command (NAVAIR), and potentially program management oversight from the F-18 program office. Key oversight functions include monitoring contractor performance against contract requirements, ensuring timely delivery of components, and reviewing invoices for accuracy. For sole-source contracts, there is often heightened scrutiny on cost reasonableness, potentially involving audits or detailed price analyses. Performance metrics, though not explicitly detailed here, would be established in the contract's statement of work to track quality and delivery.

Are there any provisions for contract modifications or adjustments given the long performance period?

Given the contract's duration of nearly 10 years (2,896 days), it is highly probable that the contract includes provisions for modifications and adjustments. Firm Fixed Price contracts can be modified under certain circumstances, such as changes in scope, economic price adjustments (EPAs) for labor and material costs, or equitable adjustments due to government-directed changes. The specific terms governing modifications would be detailed within the contract clauses. These provisions are essential for adapting to unforeseen circumstances, technological advancements, or shifts in government requirements over such an extended period, while aiming to maintain fairness to both parties.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment 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: 6200 JS MCDONNELL BLVD, SAINT LOUIS, MO, 63134

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: $111,431,620

Exercised Options: $111,431,620

Current Obligation: $111,431,620

Subaward Activity

Number of Subawards: 23

Total Subaward Amount: $89,491,062

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: SPRPA114D002U

IDV Type: IDC

Timeline