Boeing awarded $82.7M for F-18 arresting hook parts, a sole-source contract with a 3-year duration

Contract Overview

Contract Amount: $82,727,064 ($82.7M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2018-09-06

End Date: 2021-10-29

Contract Duration: 1,149 days

Daily Burn Rate: $72.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: F-18 ARRESTING HOOK NON-FCS

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $82.7 million to THE BOEING COMPANY for work described as: F-18 ARRESTING HOOK NON-FCS Key points: 1. Contract awarded to a single, established supplier, raising questions about price competitiveness. 2. The firm fixed-price contract type aims to control costs, but initial award value is substantial. 3. Sole-source nature limits opportunities for new entrants and potentially higher innovation. 4. The contract supports critical naval aviation readiness for the F-18 fleet. 5. Long-term sustainment of aging aircraft components is a recurring defense spending challenge. 6. Geographic concentration of awardee in Missouri may have local economic implications.

Value Assessment

Rating: fair

The contract value of $82.7 million for F-18 arresting hook parts over approximately three years appears significant. Without specific unit cost data or comparisons to similar components, it's difficult to definitively benchmark value. However, sole-source awards often carry a premium due to lack of competitive pressure. The firm fixed-price structure is a positive sign for cost control, but the overall value proposition hinges on the necessity and uniqueness of the components provided by The Boeing Company.

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 product or service is only available from a single source, or in cases of urgent need where competition is not feasible. The lack of competition means there was no opportunity for other suppliers to bid, potentially leading to higher prices than if multiple bids were considered. This limits price discovery and the potential for cost savings through market forces.

Taxpayer Impact: Taxpayers may be paying a premium for this component due to the absence of competitive bidding. The government did not leverage market competition to secure the best possible price for these critical F-18 parts.

Public Impact

Naval aviation units operating F-18 aircraft benefit from the continued availability of essential components. The contract ensures the operational readiness of a significant portion of the U.S. Navy and Marine Corps fighter jet fleet. The Defense Logistics Agency facilitates the supply chain for these critical parts, supporting military readiness. The workforce at The Boeing Company, particularly in its relevant manufacturing facilities, is supported by this contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential innovation.
Sustainment of aging aircraft components can be a long-term cost driver.
Lack of transparency in sole-source justification requires careful review.

Positive Signals

Firm fixed-price contract type helps manage cost certainty.
Awardee is an established, experienced manufacturer of F-18 components.
Contract supports critical operational readiness for naval aviation.

Sector Analysis

The aerospace manufacturing sector, particularly defense-specific components, is characterized by high barriers to entry, specialized knowledge, and significant R&D investment. Contracts for aircraft parts, especially for legacy platforms like the F-18, often involve long production runs and sustainment phases. The market for such specialized parts can be limited, sometimes leading to sole-source or limited competition scenarios. Benchmarking spending in this area requires comparing costs for similar complex aircraft components across different platforms and manufacturers.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there information suggesting significant subcontracting opportunities for small businesses. The award to a large prime contractor like The Boeing Company typically means the primary contract value flows to the prime. While large contractors often have subcontracting plans, the specifics for this particular award are not detailed here, and the sole-source nature might limit the scope for competitive subcontracting.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), responsible for ensuring compliance with contract terms and financial accountability. The Defense Logistics Agency (DLA) oversees the overall procurement process. Transparency is limited due to the sole-source nature, but contract modifications and performance reports would be subject to internal agency review and potentially Inspector General audits if specific concerns arise.

Related Government Programs

F/A-18 Hornet Sustainment Programs
Naval Aviation Component Procurement
Defense Logistics Agency Aircraft Parts Contracts
Sole-Source Defense Procurements

Risk Flags

Sole-source award
Potential for price inflation
Supply chain dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $82.7 million to THE BOEING COMPANY. F-18 ARRESTING HOOK NON-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 $82.7 million.

What is the period of performance?

Start: 2018-09-06. End: 2021-10-29.

What is the historical spending trend for F-18 arresting hook components from The Boeing Company?

Analyzing historical spending requires access to detailed contract databases beyond this single award. However, the F-18 platform has been in service for decades, suggesting a consistent need for sustainment parts. If this $82.7 million award represents a significant portion of annual spending, it indicates a substantial ongoing investment in maintaining the F-18 fleet's readiness. Without prior contract data, it's impossible to determine if this award represents an increase, decrease, or stable level of spending compared to previous periods for this specific component. Trends in overall F-18 sustainment spending, however, are generally influenced by fleet size, operational tempo, and the age of the aircraft.

How does the unit cost of these arresting hook components compare to similar parts on other naval aircraft?

A direct unit cost comparison is challenging without specific data on the number of units procured under this $82.7 million contract and the exact specifications of the arresting hook components. However, components for advanced fighter jets like the F-18 are typically complex and manufactured to stringent military specifications, which inherently leads to higher costs compared to simpler parts or those for less advanced platforms. Benchmarking would ideally involve comparing the cost per pound, per unit complexity, or per functional capability against similar critical components (e.g., landing gear, flight control surfaces) on aircraft such as the F-35, F-15, or other naval variants. The sole-source nature of this award further complicates direct price comparisons.

What specific risks are associated with relying on a sole-source provider for critical aircraft components like the F-18 arresting hook?

The primary risks associated with sole-source procurement include potential price inflation due to lack of competition, reduced incentive for the supplier to innovate or improve efficiency, and supply chain vulnerability. If The Boeing Company faces production issues, labor strikes, or financial difficulties, the entire supply of these critical F-18 components could be jeopardized, impacting naval aviation readiness. Furthermore, the government has limited leverage to negotiate better terms or pricing. This reliance necessitates robust contract management and potentially proactive measures to identify alternative sources or develop domestic industrial base capabilities for the future.

What is the expected performance and reliability of the F-18 arresting hook components under this contract?

The contract specifies 'FIRM FIXED PRICE' and is awarded to The Boeing Company, a long-standing manufacturer of F-18 components. This suggests an expectation of reliable performance and adherence to established specifications. Arresting hooks are critical safety and operational components, implying they must meet rigorous military standards for durability, functionality under stress, and longevity. While the contract itself doesn't detail performance metrics, the implicit expectation is that the delivered components will meet or exceed the technical requirements outlined in the procurement documentation, ensuring the safe and effective operation of F-18 aircraft during carrier landings.

Are there any plans or considerations for transitioning to a competitive procurement strategy for these components in the future?

Information regarding future transition to competitive procurement is not available from the provided data. However, for critical components like aircraft parts, defense agencies often conduct market research to assess the potential for competition over the lifecycle of a platform. If the F-18 platform continues to be a significant part of the naval inventory, and if the proprietary nature of the arresting hook components were to diminish or alternative designs emerge, the Defense Logistics Agency might explore competitive strategies. This could involve seeking second-source qualifications or developing new specifications to encourage broader market participation in subsequent contract actions.

What is the significance of the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code in relation to this contract?

The North American Industry Classification System (NAICS) code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' signifies that The Boeing Company is classified under this industry for its role in producing parts and auxiliary equipment for aircraft, which are not elsewhere classified. This includes components like the F-18 arresting hook. This classification indicates the specific segment of the aerospace manufacturing industry this contract falls into, highlighting the specialized nature of the work. It helps in understanding the industrial context and potentially benchmarking against other companies operating within the same manufacturing sub-sector.

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: $82,727,064

Exercised Options: $82,727,064

Current Obligation: $82,727,064

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $43,115,400

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