Boeing awarded $85.5M for F/A-18 flight control surfaces, a sole-source contract with a long performance period

Contract Overview

Contract Amount: $85,500,000 ($85.5M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2017-07-25

End Date: 2027-07-31

Contract Duration: 3,658 days

Daily Burn Rate: $23.4K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 20 F/A-18 E/F/G FLIGHT CONTROL SURFACE NIINS

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $85.5 million to THE BOEING COMPANY for work described as: 20 F/A-18 E/F/G FLIGHT CONTROL SURFACE NIINS Key points: 1. Contract awarded to a single supplier suggests limited market competition. 2. Long contract duration may indicate a need for sustained supply chain support. 3. Fixed-price contract type shifts some cost risk to the contractor. 4. This contract supports critical components for naval aviation readiness. 5. The value represents a significant investment in sustainment for a key defense platform.

Value Assessment

Rating: fair

The contract value of $85.5 million for 20 flight control surfaces appears substantial. Without specific per-unit cost data or comparisons to similar sole-source procurements for F/A-18 components, it is difficult to definitively assess value for money. The fixed-price nature of the contract provides some cost certainty, but the lack of competition raises concerns about potential overpricing. Benchmarking against market rates for similar complex aerospace components would be necessary for a more robust evaluation.

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 a specific manufacturer's product is required, or when only one source possesses the necessary capabilities or proprietary knowledge. The lack of competition means that taxpayers did not benefit from potential price reductions or innovative solutions that might arise from a competitive bidding process.

Taxpayer Impact: Sole-source awards limit opportunities for price discovery and can lead to higher costs for taxpayers compared to competitively sourced contracts.

Public Impact

This contract directly benefits the U.S. Navy and Marine Corps by ensuring the availability of critical flight control surfaces for their F/A-18 aircraft. The services delivered include the manufacturing and supply of essential components, maintaining the operational readiness of a significant portion of the naval aviation fleet. The geographic impact is primarily national, supporting defense readiness, though manufacturing may be concentrated in specific locations. Workforce implications include continued employment for skilled labor within The Boeing Company's aerospace manufacturing facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially impacting cost-effectiveness.
Long contract duration (over 10 years) increases exposure to potential cost overruns or performance issues over time.
Lack of transparency in the sole-source justification makes independent value assessment challenging.

Positive Signals

Fixed-price contract type provides cost predictability for the government.
Contract supports a critical defense platform, ensuring operational readiness.
Long-term award indicates a stable, long-term relationship for a necessary component.

Sector Analysis

This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector (NAICS 336413). This sector is characterized by specialized manufacturing processes and high technical expertise. The market for specific aircraft components like flight control surfaces is often dominated by original equipment manufacturers (OEMs) due to design, tooling, and certification requirements. Spending in this sector is closely tied to defense budgets and the sustainment needs of military aircraft fleets. Comparable spending benchmarks would likely be found within other sole-source or limited-competition contracts for major aircraft components.

Small Business Impact

This contract does not appear to include a small business set-aside, nor is there an indication of significant subcontracting opportunities for small businesses based on the provided data. The primary awardee is a large aerospace manufacturer. Without specific subcontracting plans or goals outlined, the direct impact on the small business ecosystem for this particular contract is likely minimal, though Boeing may engage small businesses in its broader supply chain.

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 focus on the justification for not competing and the reasonableness of the price. Accountability measures are inherent in the fixed-price contract terms. Transparency is limited due to the sole-source nature, but contract modifications and performance reports would be subject to internal DoD oversight and potentially the Government Accountability Office (GAO) if protests arise. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse.

Related Government Programs

F/A-18 Super Hornet Sustainment
Naval Aviation Component Procurement
Defense Logistics Agency Supply Chain Management
Aerospace Manufacturing Contracts
Sole-Source Defense Procurements

Risk Flags

Sole-source justification requires rigorous review.
Long contract duration increases long-term cost and performance risk.
Lack of competition limits price discovery and potential savings.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $85.5 million to THE BOEING COMPANY. 20 F/A-18 E/F/G FLIGHT CONTROL SURFACE NIINS

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 $85.5 million.

What is the period of performance?

Start: 2017-07-25. End: 2027-07-31.

What is the historical spending trend for F/A-18 flight control surfaces with The Boeing Company?

Analyzing historical spending on F/A-18 flight control surfaces requires access to detailed contract databases beyond the single award provided. However, given the F/A-18's long service life and the nature of component sustainment, it's probable that The Boeing Company has been a consistent supplier for these parts. Past spending would likely reflect similar contract structures, potentially including sole-source awards for specialized components. Trends would be influenced by fleet size, operational tempo, and the introduction of new technologies or upgrades. Without specific historical data, it's difficult to quantify trends, but the longevity of the platform suggests sustained, significant investment in its components over decades.

How does the per-unit cost of these flight control surfaces compare to similar components for other aircraft?

A direct per-unit cost comparison is challenging without knowing the exact specifications and complexity of the flight control surfaces in this $85.5 million contract for 20 units. However, components for advanced military aircraft like the F/A-18 are typically high-cost items due to stringent performance requirements, advanced materials, and rigorous testing. If these are major control surfaces (e.g., wings, tail sections), the cost per unit could easily run into millions of dollars. Comparing them to simpler components or those for less advanced aircraft would likely show a significant difference. Benchmarking against similar sole-source procurements for components on platforms like the F-35 or other advanced military jets would provide a more relevant, albeit still potentially high, comparison.

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

The primary risks associated with a sole-source contract for critical aircraft components like F/A-18 flight control surfaces include lack of price competition, which can lead to inflated costs for the government. There's also a risk of vendor lock-in, where the government becomes overly reliant on a single supplier, potentially limiting flexibility and negotiation power in the future. Performance risks can also be heightened if the sole supplier faces production issues, quality control problems, or financial instability, as there are no immediate alternative sources. Furthermore, the absence of competitive pressure might reduce the incentive for the supplier to innovate or improve efficiency over the contract's lifespan.

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

This contract is expected to have a positive impact on the operational readiness of the F/A-18 fleet by ensuring a consistent and reliable supply of critical flight control surfaces. These components are essential for flight safety and performance. By securing these parts through a long-term contract, the Department of Defense mitigates the risk of flight line shortages or delays caused by component unavailability. This directly supports the Navy and Marine Corps' ability to maintain their F/A-18s in operational status, enabling them to meet training, deployment, and combat mission requirements.

Are there any alternative suppliers or potential for future competition for these components?

Given that this is a sole-source award to The Boeing Company, the original equipment manufacturer (OEM), future competition for these specific flight control surfaces is unlikely unless Boeing licenses production to another entity or a competitor develops certified, interchangeable parts. Typically, for highly specialized and integrated components like flight control surfaces, the OEM holds the design rights and manufacturing expertise. While aftermarket suppliers might exist for some parts, major control surfaces often remain within the OEM's domain due to complex engineering, certification, and integration requirements. Exploring future competition would likely involve significant investment in reverse engineering, development, and certification processes.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

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: $85,500,000

Exercised Options: $85,500,000

Current Obligation: $85,500,000

Subaward Activity

Number of Subawards: 11

Total Subaward Amount: $34,972,953

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: SPRPA114D002U

IDV Type: IDC

Timeline