Boeing Awarded $383.7M for AWACS Aircraft Upgrade Hardware and Support
Contract Overview
Contract Amount: $383,681,400 ($383.7M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2009-07-02
End Date: 2015-09-30
Contract Duration: 2,281 days
Daily Burn Rate: $168.2K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: LOW-RATE INITIAL PRODUCTION (LRIP) SHIPSET: HARDWARE, INITIAL SPARES, INSTALLATION AND CHECKOUT (I&CO) SPARES, GROUND SYSTEMS INSTALLATION AND DELIVERY, AND LOGISTICS SUPPORT FOR UPGRADE OF A U.S. AIRBORNE WARNING AND CONTROL SYSTEM (AWACS) AIRCRAFT
Place of Performance
Location: TUKWILA, KING County, WASHINGTON, 98108
Plain-Language Summary
Department of Defense obligated $383.7 million to THE BOEING COMPANY for work described as: LOW-RATE INITIAL PRODUCTION (LRIP) SHIPSET: HARDWARE, INITIAL SPARES, INSTALLATION AND CHECKOUT (I&CO) SPARES, GROUND SYSTEMS INSTALLATION AND DELIVERY, AND LOGISTICS SUPPORT FOR UPGRADE OF A U.S. AIRBORNE WARNING AND CONTROL SYSTEM (AWACS) AIRCRAFT Key points: 1. Significant contract for critical airborne warning and control system upgrades. 2. Sole-source award to Boeing, raising questions about price discovery. 3. Long performance period (2009-2015) suggests complex integration. 4. Focus on hardware, spares, and logistics indicates a comprehensive upgrade.
Value Assessment
Rating: questionable
The contract type is Cost Plus Fixed Fee, which can incentivize cost overruns. Without a competitive benchmark, assessing the value for money is difficult.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not available for competition, meaning the government did not solicit bids from multiple vendors. This limits price discovery and potentially leads to higher costs.
Taxpayer Impact: The lack of competition for a sole-source award raises concerns about whether taxpayers received the best possible price for these critical aircraft upgrades.
Public Impact
Ensures continued operational capability for a vital U.S. Air Force asset. Supports advanced airborne surveillance and command and control functions. Potential for cost overruns due to sole-source, cost-plus contract type. Long-term sustainment and upgrade needs for aging aircraft platforms.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of competition
- Long performance period
Positive Signals
- Critical national defense asset upgrade
- Comprehensive hardware and logistics support
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, specifically for defense systems. Spending benchmarks for similar sole-source, cost-plus upgrades on complex military platforms are difficult to establish without competitive data.
Small Business Impact
There is no indication that small businesses were involved in this specific contract award, as it was a sole-source award to a large prime contractor.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure costs are reasonable and performance meets requirements. Tracking expenditures against the fixed fee is crucial.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Potential for cost overruns due to CPFF contract type.
- Lack of competitive pricing due to sole-source award.
- Risk of schedule delays given the long performance period.
- Dependency on a single contractor for critical system upgrades.
Tags
aircraft-manufacturing, department-of-defense, wa, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $383.7 million to THE BOEING COMPANY. LOW-RATE INITIAL PRODUCTION (LRIP) SHIPSET: HARDWARE, INITIAL SPARES, INSTALLATION AND CHECKOUT (I&CO) SPARES, GROUND SYSTEMS INSTALLATION AND DELIVERY, AND LOGISTICS SUPPORT FOR UPGRADE OF A U.S. AIRBORNE WARNING AND CONTROL SYSTEM (AWACS) AIRCRAFT
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 Air Force).
What is the total obligated amount?
The obligated amount is $383.7 million.
What is the period of performance?
Start: 2009-07-02. End: 2015-09-30.
What was the justification for awarding this contract on a sole-source basis, and were alternative solutions considered?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the absence of viable alternatives. For the AWACS upgrade, it's possible that only Boeing possessed the specific expertise or intellectual property required for this particular system modification, making competition impractical or excessively costly to replicate.
How were cost controls implemented and monitored under the Cost Plus Fixed Fee structure to mitigate potential overruns?
Under a Cost Plus Fixed Fee (CPFF) contract, the government reimburses the contractor for allowable costs plus a predetermined fixed fee. Cost controls would involve rigorous auditing of incurred costs, establishing ceilings for specific cost categories, and regular performance reviews to ensure efficiency and prevent unnecessary spending. The fixed fee provides some incentive for the contractor to manage costs.
What is the long-term strategic value of this AWACS upgrade in the context of evolving threats and technological advancements?
The AWACS upgrade is strategically vital for maintaining air superiority and providing critical command and control capabilities. It ensures the platform remains relevant against evolving threats by incorporating modern hardware and software, enhancing its surveillance, communication, and data processing functions, thereby extending its operational lifespan and effectiveness.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 7755 E MARGINAL WAY S, SEATTLE, WA, 98108
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: $2,547,987,090
Exercised Options: $421,694,797
Current Obligation: $383,681,400
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: F1962801D0016
IDV Type: IDC
Timeline
Start Date: 2009-07-02
Current End Date: 2015-09-30
Potential End Date: 2015-09-30 00:00:00
Last Modified: 2022-10-29
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