Boeing awarded $48.5M for Apache helicopter trainer enhancements, a sole-source contract
Contract Overview
Contract Amount: $48,500,000 ($48.5M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2019-05-21
End Date: 2024-09-30
Contract Duration: 1,959 days
Daily Burn Rate: $24.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: LONGBOW CREW TRAINER (LCT) VIRTUAL AND HARDWARE ENHANCEMENTS FOR THE AH-64, APACHE ATTACK HELICOPTER
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $48.5 million to THE BOEING COMPANY for work described as: LONGBOW CREW TRAINER (LCT) VIRTUAL AND HARDWARE ENHANCEMENTS FOR THE AH-64, APACHE ATTACK HELICOPTER Key points: 1. Contract focuses on virtual and hardware upgrades for the AH-64 Apache attack helicopter. 2. Sole-source award raises questions about price competitiveness and potential for cost overruns. 3. Long duration of the contract (nearly 2000 days) suggests a need for sustained support. 4. Firm Fixed Price contract type offers some cost certainty but may limit flexibility. 5. The contract is managed by the Department of the Army, indicating a specific military need. 6. Lack of competition suggests potential risks related to contractor performance and innovation.
Value Assessment
Rating: questionable
Benchmarking the value of this sole-source contract is challenging due to the absence of competitive bids. The $48.5 million award for virtual and hardware enhancements to the LONGBOW CREW TRAINER (LCT) for the AH-64 Apache attack helicopter lacks a clear market comparison. While the firm fixed-price structure provides some cost predictability, the lack of competition means taxpayers may not be receiving the best possible price. Further analysis would require understanding the specific technical requirements and comparing them to industry standards for similar simulation and training equipment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, technology, or proprietary knowledge to fulfill the requirement. The absence of competition limits the government's ability to leverage market forces to drive down prices and ensure the most cost-effective solution. It also raises concerns about potential price gouging and reduced incentive for the contractor to offer competitive terms.
Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from competitive pricing, potentially leading to higher overall costs for this critical training system.
Public Impact
Directly benefits the U.S. Army's aviation training programs by enhancing the realism and effectiveness of the Apache helicopter simulator. Improves pilot proficiency and combat readiness for crews operating the AH-64 Apache attack helicopter. Supports the operational readiness of a key component of the Army's combat aviation fleet. The enhancements are expected to have a positive impact on the training infrastructure at various Army installations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price discovery and potentially increases costs for taxpayers.
- Long contract duration may indicate a lack of flexibility or potential for scope creep.
- Dependence on a single contractor for critical training system enhancements poses a risk if performance falters.
Positive Signals
- Firm Fixed Price contract provides cost certainty for the awarded scope.
- Contract addresses specific, likely critical, enhancements for a key military platform (AH-64 Apache).
- The contractor, Boeing, is a major defense manufacturer with extensive experience in aviation systems.
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts and auxiliary equipment, including simulation and training systems. The market for military simulation and training is substantial, driven by the need for realistic and cost-effective training solutions that reduce reliance on live-fire exercises. Companies like Boeing are key players in this market, providing sophisticated hardware and software solutions for various military platforms. Spending benchmarks for similar training system upgrades can vary widely based on complexity and platform.
Small Business Impact
This contract does not appear to include specific small business set-aside provisions. As a sole-source award to a large prime contractor (The Boeing Company), there is a potential for limited direct subcontracting opportunities for small businesses unless explicitly mandated or pursued by the prime. The impact on the small business ecosystem would depend on Boeing's subcontracting strategy and whether small businesses are involved in the supply chain for the enhancements.
Oversight & Accountability
Oversight for this contract would primarily reside with the Department of the Army contracting and program management offices. Accountability measures are typically embedded within the contract terms, including performance metrics and delivery schedules. Transparency may be limited due to the sole-source nature of the award. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- AH-64 Apache Program
- Army Aviation Training Systems
- Defense Simulation and Training Contracts
- Longbow Weapon System Support
Risk Flags
- Sole-source award
- Lack of competition
- Long contract duration
Tags
defense, department-of-the-army, helicopter-parts, training-systems, sole-source, firm-fixed-price, boeing, ah-64-apache, longbow-crew-trainer, missouri, simulation-and-training
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $48.5 million to THE BOEING COMPANY. LONGBOW CREW TRAINER (LCT) VIRTUAL AND HARDWARE ENHANCEMENTS FOR THE AH-64, APACHE ATTACK HELICOPTER
Who is the contractor on this award?
The obligated recipient is THE BOEING COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $48.5 million.
What is the period of performance?
Start: 2019-05-21. End: 2024-09-30.
What is the specific nature of the 'virtual and hardware enhancements' for the LONGBOW CREW TRAINER (LCT)?
The provided data does not detail the specific enhancements. However, for a system like the LONGBOW CREW TRAINER (LCT) for the AH-64 Apache, enhancements typically involve updating simulation software to reflect new threat environments or aircraft capabilities, improving visual systems for greater realism, upgrading hardware components for better fidelity or reliability, and potentially integrating new sensor or weapon system emulations. Given the contract's duration and value, these likely represent significant upgrades rather than minor maintenance, aiming to keep the training system current with evolving operational requirements and technological advancements in the Apache platform.
Why was this contract awarded on a sole-source basis instead of being competed?
Sole-source awards are generally justified when a unique capability, proprietary technology, or specialized expertise is required that only one contractor can provide. For the LONGBOW CREW TRAINER (LCT) enhancements, the Department of the Army likely determined that The Boeing Company, as the original manufacturer or integrator of the AH-64 Apache and its associated training systems, possessed the exclusive rights, technical data, or necessary integration knowledge to perform these specific upgrades. This could be due to intellectual property restrictions, the need for seamless integration with the existing platform, or the absence of viable alternative providers capable of meeting the stringent technical requirements without significant delays or cost increases.
How does the firm fixed-price (FFP) contract type mitigate risks for the government in this sole-source scenario?
In a sole-source scenario, a Firm Fixed Price (FFP) contract offers a degree of cost certainty for the government. Unlike cost-plus contracts, the contractor assumes the risk of cost overruns. This means that the $48.5 million ceiling is the maximum the government is obligated to pay, provided the contractor meets the contract's defined scope and specifications. While it doesn't guarantee the lowest possible price due to the lack of competition, the FFP structure prevents the government from incurring additional costs if the contractor's actual expenses exceed their estimates. This provides budget predictability and limits financial exposure related to the contractor's performance.
What are the potential implications of the contract's long duration (1959 days) on its overall value?
A contract duration of 1959 days (approximately 5.4 years) for enhancements suggests a phased approach to development, integration, and delivery, or a long-term support requirement. While a longer duration can sometimes lead to economies of scale or allow for more thorough testing and refinement, it also increases the risk of scope creep, technological obsolescence during the performance period, and potential cost increases if market conditions change unfavorably. For the government, it necessitates sustained oversight and management over an extended period. The value is realized if the enhancements remain relevant and effective throughout their lifecycle and contribute significantly to training objectives.
What is the historical spending pattern for LONGBOW CREW TRAINER (LCT) related contracts?
The provided data only includes this specific contract award. To understand historical spending patterns, a broader search of federal procurement databases (like FPDS or SAM.gov) would be necessary, looking for previous contracts related to the LONGBOW CREW TRAINER (LCT) or similar AH-64 Apache training systems. Analyzing past awards, including their values, durations, competition levels, and contractors, would reveal trends in investment, identify potential sole-source dependencies over time, and provide a baseline for assessing the current contract's relative cost and scope.
How does this contract align with the overall modernization efforts for the AH-64 Apache attack helicopter fleet?
This contract directly supports the modernization and sustainment of the AH-64 Apache attack helicopter fleet by ensuring its associated training systems remain current and effective. Modern attack helicopters undergo continuous upgrades to incorporate new technologies, counter emerging threats, and improve performance. Enhancements to the LONGBOW CREW TRAINER (LCT) are crucial for replicating these advancements in a simulated environment, allowing pilots and crews to train on the latest configurations and tactics without the expense and risk of using actual aircraft. This contract ensures that training capabilities keep pace with fleet modernization.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: TRAINING AIDS AND DEVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
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: $58,837,342
Exercised Options: $48,500,000
Current Obligation: $48,500,000
Subaward Activity
Number of Subawards: 8
Total Subaward Amount: $20,657,442
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Parent Contract
Parent Award PIID: W58RGZ15G0006
IDV Type: BOA
Timeline
Start Date: 2019-05-21
Current End Date: 2024-09-30
Potential End Date: 2024-09-30 00:00:00
Last Modified: 2025-04-26
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