Boeing awarded $66.3M for AH-6i helicopter sustainment to Saudi Arabia Guard

Contract Overview

Contract Amount: $66,307,240 ($66.3M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2017-04-28

End Date: 2022-10-29

Contract Duration: 2,010 days

Daily Burn Rate: $33.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: POST PRODUCTION SUSTAINMENT SUPPORT (PPSS) FOR 24 EACH AH-6I HELICOPTERS FOR THE SAUDI ARABIA GUARD (SANG)

Place of Performance

Location: MESA, MARICOPA County, ARIZONA, 85215

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $66.3 million to THE BOEING COMPANY for work described as: POST PRODUCTION SUSTAINMENT SUPPORT (PPSS) FOR 24 EACH AH-6I HELICOPTERS FOR THE SAUDI ARABIA GUARD (SANG) Key points: 1. Contract awarded for post-production sustainment support of AH-6i helicopters. 2. Focus on ensuring operational readiness and longevity of specialized aircraft. 3. Contract duration spans over five years, indicating a long-term support need. 4. The award is a definitive contract, suggesting a clear scope of work. 5. Firm Fixed Price (FFP) contract type aims to control costs for the government. 6. This contract supports a foreign military sale, not direct U.S. military operations.

Value Assessment

Rating: fair

The contract value of $66.3 million for five years of sustainment support for 24 AH-6i helicopters appears to be within a reasonable range for specialized aviation support. Benchmarking against similar foreign military sales sustainment contracts is challenging due to unique configurations and customer requirements. However, the firm fixed-price nature of the contract provides cost certainty. The contract's value per helicopter per year is approximately $552,560, which needs to be assessed against the complexity and scope of the sustainment services provided.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating that The Boeing Company was the only responsible source capable of providing the required post-production sustainment support for the AH-6i helicopters. This is often the case for highly specialized equipment where the original manufacturer holds proprietary knowledge and manufacturing rights. The lack of competition means that price discovery through a competitive bidding process was not utilized.

Taxpayer Impact: For taxpayers, a sole-source award means there is a reduced opportunity to achieve cost savings that might arise from a competitive environment. Oversight is critical to ensure fair pricing and value.

Public Impact

The primary beneficiaries are the Saudi Arabia National Guard (SANG), who will receive sustainment support for their AH-6i helicopter fleet. Services delivered include post-production sustainment, ensuring the operational readiness and longevity of the aircraft. The geographic impact is primarily in Saudi Arabia, where the SANG operates. Workforce implications may include specialized technical support personnel, potentially both U.S.-based and locally sourced, depending on the support agreement.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing advantages for the government.
Potential for cost overruns if scope creep occurs without adequate oversight.
Dependence on a single contractor for critical sustainment services.

Positive Signals

Firm Fixed Price contract provides cost certainty for the duration of the award.
Long-term sustainment contract ensures continued operational capability for the customer.
Boeing's established expertise in AH-6i helicopter production and support.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft sustainment. The market for military aircraft sustainment is significant, driven by the need to maintain aging fleets and support new acquisitions. This contract represents a portion of the broader global market for helicopter support services, which includes maintenance, repair, overhaul, and spare parts. Benchmarking against similar contracts is difficult due to the specialized nature of the AH-6i and its foreign military sale context.

Small Business Impact

This contract does not appear to have a small business set-aside component. As a sole-source award to a large prime contractor, there are no direct subcontracting implications for small businesses mandated by this specific award. However, Boeing may engage small businesses in its supply chain for parts or services, but this is not a direct requirement of this contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA) on behalf of the Department of Defense, ensuring compliance with contract terms and conditions. Accountability measures are inherent in the firm fixed-price structure, which places the financial risk on the contractor for cost overruns. Transparency is generally limited for sole-source foreign military sales contracts compared to domestically competed programs.

Related Government Programs

Foreign Military Sales (FMS) Program
Aircraft Maintenance and Repair Services
Rotary Wing Aircraft Support
Defense Logistics Agency (DLA) Support Contracts

Risk Flags

Sole-source award
Foreign Military Sale (FMS)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $66.3 million to THE BOEING COMPANY. POST PRODUCTION SUSTAINMENT SUPPORT (PPSS) FOR 24 EACH AH-6I HELICOPTERS FOR THE SAUDI ARABIA GUARD (SANG)

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 Contract Management Agency).

What is the total obligated amount?

The obligated amount is $66.3 million.

What is the period of performance?

Start: 2017-04-28. End: 2022-10-29.

What is the track record of The Boeing Company in providing sustainment support for similar rotary-wing aircraft, particularly in foreign military sales contexts?

The Boeing Company has a long and extensive track record in providing sustainment support for a wide range of rotary-wing aircraft, including military helicopters. Their experience spans decades and includes support for U.S. military branches as well as numerous international partners through Foreign Military Sales (FMS). Boeing's sustainment offerings typically encompass logistics, maintenance, repair, overhaul (MRO), engineering services, and training. For specialized platforms like the AH-6i, which is a derivative of the MH-6 Little Bird, Boeing's direct involvement in its production positions them uniquely to offer comprehensive post-production support. Their ability to manage complex supply chains, provide technical expertise, and ensure parts availability are critical factors in their success. While specific performance metrics for this particular contract are not publicly detailed, Boeing's general reputation in the defense sustainment sector is that of a capable, albeit sometimes costly, provider.

How does the pricing structure of this firm fixed-price contract compare to industry benchmarks for similar helicopter sustainment services?

Assessing the precise pricing against industry benchmarks for this firm fixed-price (FFP) contract is challenging without detailed cost breakdowns and specific service level agreements. However, the total contract value of $66.3 million over approximately five years for 24 AH-6i helicopters equates to roughly $552,560 per helicopter per year. This figure encompasses a range of sustainment activities, which could include scheduled maintenance, unscheduled repairs, spare parts, technical support, and potentially depot-level services. Industry benchmarks for helicopter sustainment can vary significantly based on aircraft type (light vs. heavy lift), complexity, operational tempo, and the scope of services included. For specialized military helicopters, particularly those with unique configurations for foreign customers, costs can be higher than for more common civilian counterparts. The FFP nature of the contract aims to provide cost certainty, but it relies heavily on accurate initial cost estimation by the contractor and effective oversight by the procuring agency to ensure value for money.

What are the primary risks associated with a sole-source award for critical aircraft sustainment, and how are they mitigated?

The primary risks associated with a sole-source award for critical aircraft sustainment include a lack of competitive pricing, potentially leading to higher costs for the government or customer. There's also a risk of contractor complacency, where the absence of competition might reduce the incentive for the contractor to innovate or provide the most efficient service. Furthermore, dependence on a single supplier can create vulnerabilities in the supply chain or lead to issues if the contractor faces financial difficulties or strategic shifts. Mitigation strategies typically involve robust contract negotiation, stringent performance metrics, clear scope definition, and diligent oversight by the contracting agency. For this contract, the firm fixed-price structure helps mitigate cost overrun risks, and the long-term nature suggests a strategic partnership where performance is closely monitored. The inherent risk of sole-sourcing is often accepted when only one entity possesses the necessary technical expertise, intellectual property, or manufacturing capabilities, as is common with specialized military equipment.

What is the historical spending pattern for AH-6i helicopter sustainment, and how does this contract align with it?

Historical spending data specifically for AH-6i helicopter sustainment, particularly for the Saudi Arabia National Guard (SANG), is not readily available in the public domain. The AH-6i is a relatively specialized variant, and its deployment and sustainment history may be less documented than more common military platforms. This contract, valued at $66.3 million over approximately five years (2017-2022), represents a significant investment in ensuring the operational readiness of the SANG's AH-6i fleet. Without prior contract data or public spending reports for this specific platform and customer, it's difficult to establish a direct historical spending pattern. However, the duration and value suggest a commitment to long-term support, which is typical for maintaining specialized military assets. Future spending would likely depend on the operational tempo, attrition rates, and evolving support requirements of the SANG.

What are the implications of this contract being for a foreign military sale (FMS) rather than for U.S. domestic defense needs?

This contract being for a Foreign Military Sale (FMS) has several implications. Firstly, the funding originates from the purchasing country (Saudi Arabia) or U.S. security assistance programs, not directly from the U.S. Department of Defense's operational budget for its own forces. Secondly, the specific requirements, configurations, and support levels are dictated by the foreign customer's needs and agreements with the U.S. government. While the U.S. Department of Defense (DoD) manages the FMS process, ensuring compliance and oversight, the ultimate end-user is the Saudi Arabia National Guard. This can sometimes lead to different pricing structures or support packages compared to contracts for U.S. domestic use, as it involves international logistics, potential technology transfer considerations, and specific customer demands. The U.S. government acts as an intermediary, leveraging its relationships and procurement processes to facilitate the sale and support.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W58RGZ15R0315

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5000 EAST MCDOWELL ROAD, MESA, AZ, 85215

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: $71,728,839

Exercised Options: $66,307,240

Current Obligation: $66,307,240

Subaward Activity

Number of Subawards: 49

Total Subaward Amount: $5,972,281

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline