Boeing awarded $76M for CH-47F engineering, with limited competition and long-term delivery
Contract Overview
Contract Amount: $76,196,343 ($76.2M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2024-05-15
End Date: 2027-11-30
Contract Duration: 1,294 days
Daily Burn Rate: $58.9K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: CH-47F NON-RECURRING ENGINEERING FOR GERMANY
Place of Performance
Location: RIDLEY PARK, DELAWARE County, PENNSYLVANIA, 19078
Plain-Language Summary
Department of Defense obligated $76.2 million to THE BOEING COMPANY for work described as: CH-47F NON-RECURRING ENGINEERING FOR GERMANY Key points: 1. Contract awarded to a single, established provider, raising questions about price competitiveness. 2. Significant duration suggests a long-term need for specialized engineering support. 3. Cost-plus-fixed-fee structure may incentivize cost escalation without strong oversight. 4. Focus on non-recurring engineering indicates development or modification of existing platforms. 5. Geographic focus on Germany highlights international defense cooperation and sustainment needs.
Value Assessment
Rating: fair
The $76.2 million award to Boeing for CH-47F non-recurring engineering is substantial. Benchmarking this specific type of engineering service is challenging due to its specialized nature and the 'not competed' award. However, the cost-plus-fixed-fee (CPFF) contract type, while common for complex R&D, carries inherent risks of cost overruns if not meticulously managed. Without competitive bids, it's difficult to ascertain if the pricing represents optimal value for money.
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 unique capability or proprietary technology is required, or in cases of urgent need where competition is not feasible. The lack of competition limits the government's ability to explore alternative solutions or leverage market forces to drive down costs.
Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the cost savings typically achieved through competitive bidding, potentially leading to higher overall program expenditures.
Public Impact
The U.S. Army benefits through enhanced sustainment and potential upgrades for its CH-47F Chinook fleet operating in Germany. Specialized engineering services will be delivered to support the operational readiness and modernization of critical aviation assets. The geographic impact is centered on U.S. Army operations in Germany, supporting deployed forces. The contract supports a highly skilled engineering workforce within The Boeing Company, contributing to specialized aerospace expertise.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee contract type can lead to higher costs if not tightly managed.
- Sole-source award limits price discovery and potential cost savings for taxpayers.
- Long contract duration (over 3 years) increases exposure to potential scope creep or unforeseen cost increases.
Positive Signals
- Award to a prime contractor with extensive experience on the CH-47 platform ensures continuity and specialized knowledge.
- Focus on non-recurring engineering suggests efforts to improve or adapt the aircraft, potentially enhancing its long-term value.
- Contract supports critical defense operations in a key international theater (Germany).
Sector Analysis
The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and long product lifecycles. Contracts for specialized engineering services, particularly for established platforms like the CH-47 Chinook, often involve incumbent contractors due to the deep technical knowledge and existing relationships required. Spending in this sub-sector supports platform sustainment, modernization, and development, with major players like Boeing dominating large-scale contracts.
Small Business Impact
This contract was not competed and does not appear to include specific small business set-aside provisions. As a sole-source award to a large prime contractor, the direct impact on small businesses is likely minimal unless Boeing intends to subcontract portions of the work. Further analysis would be needed to determine if small businesses are included in Boeing's subcontracting plan for this effort.
Oversight & Accountability
Oversight for this contract will primarily fall under the Department of the Army's contracting and program management offices. The cost-plus-fixed-fee structure necessitates rigorous financial oversight to monitor expenditures and ensure compliance with the fixed fee. Transparency may be limited due to the sole-source nature, but contract performance reviews and audits by the Defense Contract Audit Agency (DCAA) would be standard oversight mechanisms.
Related Government Programs
- CH-47 Chinook Helicopter Program
- Department of Defense Aviation Sustainment
- Foreign Military Sales Support
- Aerospace Engineering Services
Risk Flags
- Sole-source award limits competitive pricing.
- Cost-plus-fixed-fee contract type carries risk of cost overruns.
- Long contract duration increases exposure to changing requirements or economic factors.
Tags
defense, department-of-the-army, engineering-services, not-competed, sole-source, cost-plus-fixed-fee, ch-47f, chinook, boeing, germany, aviation, non-recurring-engineering
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $76.2 million to THE BOEING COMPANY. CH-47F NON-RECURRING ENGINEERING FOR GERMANY
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 $76.2 million.
What is the period of performance?
Start: 2024-05-15. End: 2027-11-30.
What is the historical spending trend for CH-47F non-recurring engineering services provided by The Boeing Company?
Analyzing historical spending for CH-47F non-recurring engineering (NRE) by The Boeing Company requires access to detailed contract databases. While this specific $76.2 million award is for a defined period (2024-2027), previous NRE efforts for the CH-47F platform would likely show a pattern of significant investment, especially during periods of platform upgrades or modifications. Boeing, as the original equipment manufacturer, is the logical source for such specialized engineering. Past awards might range from smaller, targeted engineering change proposals to larger, multi-year contracts for system upgrades. Without specific historical data points for NRE, it's difficult to establish a precise trend, but it's reasonable to assume consistent, albeit variable, spending aligned with the Chinook's lifecycle and modernization requirements.
How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for similar engineering services, and what are the associated risks?
The Cost-Plus-Fixed-Fee (CPFF) contract type is often used for research and development or complex services where the scope is not fully defined at the outset, as is potentially the case with non-recurring engineering. In a CPFF contract, the contractor is reimbursed for all allowable costs plus a predetermined fixed fee, representing profit. This differs from fixed-price contracts, where the price is set regardless of actual costs, incentivizing efficiency. Compared to Cost-Plus-Incentive-Fee (CPIF) or Cost-Plus-Award-Fee (CPAF), CPFF offers less direct incentive for cost control beyond the initial cost ceiling. The primary risk for the government is cost escalation, as the contractor is incentivized to incur costs to achieve the fixed fee, without a direct share in cost savings. Robust oversight and detailed cost tracking are crucial to mitigate these risks.
What specific 'non-recurring engineering' tasks are anticipated under this contract for the CH-47F in Germany?
The term 'non-recurring engineering' (NRE) typically refers to the design, development, and testing efforts required to create a new product or significantly modify an existing one, where these costs are not expected to be repeated for each unit produced. For the CH-47F in Germany, NRE could encompass a range of activities. This might include designing and integrating new avionics systems, developing modifications for specific operational environments or mission requirements unique to European theater operations, addressing obsolescence issues by redesigning components, or conducting testing and validation for these changes. The contract's duration and value suggest these are substantial engineering efforts rather than minor modifications, likely aimed at enhancing the platform's capabilities, reliability, or maintainability over its remaining service life.
What is The Boeing Company's track record with the CH-47 platform, particularly regarding engineering and sustainment contracts?
The Boeing Company has an extensive and long-standing track record with the CH-47 Chinook platform, having been the prime contractor and manufacturer since its inception. Their experience spans decades of production, upgrades, and sustainment efforts for various CH-47 variants, including the CH-47F. This includes numerous contracts for engineering services, spare parts, depot maintenance, and modernization programs across different U.S. military branches and international customers. Boeing's deep institutional knowledge of the aircraft's design, systems, and operational history positions them as a critical partner for complex engineering tasks. Their performance on previous CH-47 contracts generally reflects a strong capability in delivering required services, though like any large defense contractor, specific contract performance can vary.
Are there any known risks or challenges associated with the CH-47F platform that this engineering effort might be intended to address?
The CH-47F Chinook, while a highly capable and reliable platform, faces challenges common to aging aircraft fleets. These can include component obsolescence, increasing maintenance costs, and the need to adapt to evolving mission requirements and threat environments. Non-recurring engineering efforts are often initiated to address these issues. For instance, this contract might be focused on redesigning or replacing aging components with more modern, sustainable alternatives, improving the aircraft's survivability through enhanced protection systems, integrating new communication or sensor suites, or optimizing performance for specific operational theaters like Germany. The long duration suggests a strategic effort to enhance the platform's long-term viability and effectiveness.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: ROUTE 291 & STEWART AVE, RIDLEY PARK, PA, 19078
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: $76,196,343
Exercised Options: $76,196,343
Current Obligation: $76,196,343
Subaward Activity
Number of Subawards: 3
Total Subaward Amount: $1,655,175
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W58RGZ19D0028
IDV Type: IDC
Timeline
Start Date: 2024-05-15
Current End Date: 2027-11-30
Potential End Date: 2027-11-30 12:11:00
Last Modified: 2025-08-18
More Contracts from THE Boeing Company
- KC-X Modernization Program — $32.0B (Department of Defense)
- International Space Station — $22.4B (National Aeronautics and Space Administration)
- 200112!000108!9700!ZD60 !ballistic Missile Defense ORG. !HQ000601C0001 !A!N!*!N! !20001222!20080930!848025649!848025649!009256819!n!the Boeing Company !3370 E Miraloma AVE !anaheim !ca!92806!37000!089!01!huntsville !madison !alabama !+000383571022!n!n!000000000000!ad93!rdte/Other Defense-Adv Tech DEV !S1 !services !1caa!ballistic Missile Defense SYS !541710!*!*!3! ! ! !*!*!*!B!*!*!A! !A !U!R!2!001!B! !Z!Y!Z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! — $18.8B (Department of Defense)
- USN P-8A FRP II Long Lead Material — $18.1B (Department of Defense)
- 200512!010860!2100!w56hzv!tacom - Warren !w56hzv05c0724 !A!N! !Y! ! !20050923!20141231!016544780!016544780!009256819!n!the Boeing Company !J S Mcdonnell Blvd !saint Louis !mo!63166!65000!510!29!st. Louis !ST. Louis (city) !missouri !+000219245691!n!n!000000000000!az15!rdte/Other Research&development-Eng/Manuf Devel !S1 !services !301 !FCS !541330!E! !1! ! ! ! ! !20200930!B! ! !A! !d!u!u!1!001!n!1a!z!y!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! ! TAS::21 2040::TAS — $12.7B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)