Boeing awarded $77M for F-18 flight control surfaces, a sole-source contract for critical defense components

Contract Overview

Contract Amount: $76,996,762 ($77.0M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2018-08-17

End Date: 2022-12-30

Contract Duration: 1,596 days

Daily Burn Rate: $48.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: F-18 FLIGHT CONTROL SURFACES

Place of Performance

Location: RIDLEY PARK, DELAWARE County, PENNSYLVANIA, 19078

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $77.0 million to THE BOEING COMPANY for work described as: F-18 FLIGHT CONTROL SURFACES Key points: 1. Contract awarded to a single supplier suggests limited market alternatives for specialized aircraft parts. 2. The firm fixed-price structure aims to control costs, but the absence of competition may limit price negotiation. 3. Long contract duration (over 4 years) indicates a sustained need for these components. 4. The contract is managed by the Defense Logistics Agency, a key procurement arm for military equipment. 5. Specialized nature of flight control surfaces points to high technical barriers to entry for potential competitors. 6. The contract's value, while significant, needs to be assessed against the criticality and volume of parts supplied.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without detailed cost breakdowns or comparisons to similar sole-source procurements for F-18 components. The $77 million over nearly four years suggests a substantial but potentially fair price given the specialized nature of flight control surfaces and the sole-source award. Without competitive bids, it's difficult to definitively assess if the pricing represents optimal value for money, though the firm fixed-price type contract provides some cost certainty.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, The Boeing Company, was solicited. This approach is typically used when only one responsible source is available or when there is a compelling justification for excluding other sources. The lack of competition means that price discovery through market forces was bypassed, potentially leading to higher costs than if multiple bids were received.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. While sole-source awards can be justified for unique or critical items, they necessitate careful oversight to ensure fair pricing.

Public Impact

The U.S. Navy and potentially other branches operating F-18 aircraft benefit from the continued availability of essential flight control components. This contract ensures the operational readiness and maintenance of a significant portion of the U.S. tactical aviation fleet. The geographic impact is national, supporting military bases and operations across the United States and potentially overseas. The contract supports specialized manufacturing jobs within The Boeing Company and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Lack of competition raises questions about the efficiency and necessity of the sole-source justification.
Dependence on a single supplier for critical components creates supply chain risk.
Contract duration and value warrant scrutiny to ensure continued justification for sole-source procurement.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award to a known, established manufacturer like Boeing suggests reliability in production.
Contract supports a critical defense platform (F-18), ensuring operational readiness.

Sector Analysis

The aerospace manufacturing sector is characterized by high barriers to entry, significant R&D investment, and stringent quality control requirements. Contracts for aircraft components, especially for established platforms like the F-18, often involve specialized knowledge and proprietary technology. The Defense Logistics Agency's role highlights the substantial government spending within this sector, with major defense contractors like Boeing being key players. Comparable spending benchmarks would typically involve other sole-source or limited-competition awards for similar high-value, specialized aircraft parts.

Small Business Impact

This contract does not appear to involve small business set-asides, as it was awarded directly to The Boeing Company. There is no explicit information regarding subcontracting plans for small businesses within this specific award. The focus on a large, prime contractor for specialized components may limit direct opportunities for small businesses unless they are part of Boeing's established supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Logistics Agency (DLA) and potentially the Department of Defense's Inspector General. Mechanisms likely include contract performance reviews, audits, and compliance checks. Transparency is generally maintained through contract databases like FPDS, though detailed cost justifications for sole-source awards may be less publicly accessible. Accountability rests with DLA contracting officers to ensure the terms are met and the pricing remains fair over the contract's life.

Related Government Programs

F/A-18 Hornet/Super Hornet aircraft procurement
Aircraft component manufacturing contracts
Defense Logistics Agency supply chain management
Sole-source defense procurements
Aerospace parts and equipment

Risk Flags

Sole-source award
Lack of competition
Potential for price escalation
Supply chain dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $77.0 million to THE BOEING COMPANY. F-18 FLIGHT CONTROL SURFACES

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 $77.0 million.

What is the period of performance?

Start: 2018-08-17. End: 2022-12-30.

What is the specific justification provided for awarding this contract on a sole-source basis?

Sole-source awards are typically justified under specific circumstances outlined in federal acquisition regulations (FAR). For this contract, the justification likely stems from The Boeing Company being the original equipment manufacturer (OEM) of the F-18 aircraft and its proprietary knowledge or tooling required for the flight control surfaces. Alternatively, it could be due to unique technical requirements, urgent needs where competition is impractical, or if only one source possesses the necessary capabilities. A detailed review of the contract file, specifically the Justification for Other Than Full and Open Competition (JOFOC), would reveal the precise rationale. Without access to this document, we infer the justification is based on Boeing's unique position as the OEM and sole producer of these specific components for the F-18 platform.

How does the awarded price compare to historical spending on similar F-18 flight control surface components?

Comparing the awarded price of $76,996,761.98 for F-18 flight control surfaces requires access to historical contract data for similar items procured from The Boeing Company or other sources. Given this is a sole-source award, direct price comparisons with competitive bids are not feasible. However, analysis could involve examining trends in pricing for related F-18 parts over time, looking at the quantity and type of surfaces included in this award versus previous contracts, and assessing if the unit costs align with industry benchmarks for similar aerospace components. The contract's duration (August 2018 to December 2022) and the delivery order nature suggest potential fluctuations in quantity and price over its life, making a simple total cost comparison insufficient without further detail on specific line items and quantities delivered.

What are the potential risks associated with relying on a sole-source supplier for critical aircraft components?

Relying on a sole-source supplier like Boeing for F-18 flight control surfaces presents several risks. Firstly, there's a significant risk of price escalation over time, as the government lacks the leverage of competitive bidding to negotiate lower prices. Secondly, supply chain disruptions become a major concern; any issue at Boeing, whether production-related, financial, or geopolitical, could directly impact the availability of these critical parts, potentially grounding aircraft. Thirdly, there's a risk of technological stagnation, as the absence of competition may reduce the incentive for the supplier to innovate or offer more cost-effective solutions. Lastly, dependence on a single source can create long-term strategic vulnerabilities for the military's operational readiness.

What is the estimated unit cost or cost per pound/hour for these flight control surfaces?

Determining a precise unit cost for these F-18 flight control surfaces is not possible with the provided data alone. The contract is for 'F-18 FLIGHT CONTROL SURFACES' and was awarded via delivery orders against a basic contract. The total value is $76,996,761.98. Without knowing the exact quantity, type, and specific part numbers of the flight control surfaces included in this award, calculating a meaningful average unit cost is infeasible. Furthermore, 'flight control surfaces' can encompass a wide range of components (e.g., ailerons, elevators, rudders, flaps) with vastly different complexities and costs. A cost-per-pound or cost-per-hour metric would also require detailed specifications of the components and their usage rates, which are not available in this summary.

How does this contract fit into the broader spending on F-18 aircraft sustainment and modernization?

This contract for F-18 flight control surfaces represents a crucial component of the overall sustainment and operational readiness budget for the F-18 fleet. Flight control surfaces are critical flight safety items, and their continuous availability is paramount for maintaining the operational capability of these aircraft. Spending on components like these is part of the larger ecosystem of maintenance, repair, and overhaul (MRO) activities required to keep aging platforms like the F-18 flying. It complements other contracts related to engine maintenance, avionics upgrades, structural repairs, and overall fleet management. The $77 million expenditure highlights the ongoing investment needed to support legacy aircraft, even as newer platforms are introduced.

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: $76,996,762

Exercised Options: $76,996,762

Current Obligation: $76,996,762

Subaward Activity

Number of Subawards: 21

Total Subaward Amount: $14,580,505

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