DoD awards $1.5B for aircraft development, with Boeing as sole contractor

Contract Overview

Contract Amount: $1,143,527,931 ($1.1B)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2003-12-29

End Date: 2011-12-31

Contract Duration: 2,924 days

Daily Burn Rate: $391.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200412!000001!1700!AA430 !NAVAIRSYSCOM HQ !N0001904C0005 !A!N! !N! ! !20031229!20090930!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST. LOUIS (CITY) !MISSOURI !+000090150994!N!N!000979033911!AC15!RDTE/AIRCRAFT-ENG/MANUF DEVELOP !A4A!COMBAT VEHICLES !378 !E/A-18G !541710!E! !3! ! ! ! ! !99990909!B! ! !A! !D!U!R!1!001!N!1G!A!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! !Y! ! !0001! !

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $1.14 billion to THE BOEING COMPANY for work described as: 200412!000001!1700!AA430 !NAVAIRSYSCOM HQ !N0001904C0005 !A!N! !N! ! !20031229!20090930!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST. … Key points: 1. Contract awarded on a sole-source basis, raising questions about price competition. 2. Significant portion allocated to research, development, testing, and evaluation (RDT&E). 3. Long contract duration of nearly 8 years suggests a complex, long-term project. 4. The contractor, Boeing, has a substantial track record in defense manufacturing. 5. The contract is for aircraft development, a critical component of national defense. 6. The geographic location of the contractor is in Missouri.

Value Assessment

Rating: fair

The total award amount of $1.5 billion for aircraft development is substantial. Without specific benchmarks for this type of RDT&E, it's difficult to definitively assess value for money. However, the sole-source nature of the award suggests limited opportunity for competitive pricing, which could lead to higher costs than if multiple bidders were involved. The contract type, Cost Plus Award Fee, incentivizes performance but also carries inherent cost risks.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder was solicited. This typically occurs when a unique capability or proprietary technology is involved, or in cases of urgent need. The lack of competition means there was no direct price comparison against other potential providers, potentially impacting the government's ability to secure the best possible price.

Taxpayer Impact: Sole-source awards limit the government's leverage in price negotiations, potentially leading to higher expenditures for taxpayers compared to competitively bid contracts.

Public Impact

The primary beneficiary is the Department of Defense, specifically naval aviation programs. Services delivered include research, development, engineering, and manufacturing of advanced aircraft. The geographic impact is concentrated around the contractor's facilities in Missouri. The contract supports a significant workforce within the aerospace and defense industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost Plus Award Fee contract type can lead to cost overruns if not managed tightly.
Long contract duration increases exposure to potential scope creep and evolving requirements.

Positive Signals

Contractor (Boeing) is a major defense manufacturer with extensive experience.
Focus on RDT&E for advanced aircraft development is critical for maintaining technological superiority.
The award fee structure provides some incentive for contractor performance and efficiency.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft research and development. The market for advanced military aircraft development is highly specialized, often dominated by a few large prime contractors. Spending in this area is driven by national security requirements and technological advancements. Comparable spending benchmarks would typically involve other major defense RDT&E programs for aircraft platforms.

Small Business Impact

There is no indication of small business set-asides for this contract. As a sole-source award to a large prime contractor, the primary focus is likely on the prime's capabilities. Subcontracting opportunities for small businesses may exist, but they would be determined by the prime contractor's procurement strategy. The overall impact on the small business ecosystem is likely indirect, dependent on Boeing's subcontracting plans.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA) and the relevant Naval Air Systems Command (NAVAIRSYSCOM) program office. Accountability measures are embedded in the Cost Plus Award Fee structure, which includes performance metrics. Transparency may be limited due to the sole-source nature and the proprietary aspects of aircraft development.

Related Government Programs

Naval Aviation Programs
Aircraft Research and Development
Advanced Weapons Systems
Defense Manufacturing

Risk Flags

Sole-source award
Cost-plus contract type
Long contract duration
Research and Development focus

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.14 billion to THE BOEING COMPANY. 200412!000001!1700!AA430 !NAVAIRSYSCOM HQ !N0001904C0005 !A!N! !N! ! !20031229!20090930!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST. LOUIS (CITY) !MISSOURI !+000090150994!N!N!000979033911!AC15!RDTE/AIRCRAFT-ENG/MANUF DEVELOP !A4A!COMBAT VEHICLES !378 !E/A-18G !541710!E! !3! ! ! ! ! !999

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 $1.14 billion.

What is the period of performance?

Start: 2003-12-29. End: 2011-12-31.

What is the specific aircraft platform or system this contract is for, and what are its key capabilities?

The provided data indicates the Product Service Code (PSC) is 541710, which corresponds to 'Aircraft Components and Accessories.' The data also mentions 'E/A-18G' which is the specific designation for the Growler, an electronic warfare variant of the F/A-18 Super Hornet. Therefore, this contract is likely related to the research, development, engineering, and manufacturing of components or upgrades for the EA-18G Growler aircraft. The EA-18G is designed for airborne electronic attack missions, providing electronic warfare, expeditionary targeting, and suppression of enemy defenses.

How does the $1.5 billion award compare to historical spending on similar aircraft development programs?

Comparing this $1.5 billion award requires context on the specific phase of development and the complexity of the aircraft. Major aircraft development programs, especially for advanced platforms like the EA-18G Growler, can span many years and involve billions in funding across multiple contracts. For instance, the initial development and production of the EA-18G program itself involved significant investment over its lifecycle. Without knowing the exact scope (e.g., initial RDT&E vs. sustainment vs. specific upgrade), a direct comparison is challenging. However, $1.5 billion for a significant development or upgrade phase for a complex military aircraft is within the expected range for such programs.

What are the key performance metrics and award fee criteria outlined in the Cost Plus Award Fee contract?

The provided data specifies the contract type as 'COST PLUS AWARD FEE' (CPAF). While the specific performance metrics and award fee criteria are not detailed in this snippet, CPAF contracts typically establish a range of performance objectives. These often include factors such as meeting technical specifications, adhering to schedules, managing costs effectively, and achieving specific program milestones. The contractor earns a base fee plus an award amount based on the government's assessment of their performance against these pre-defined criteria. The 'award' portion is variable and intended to incentivize superior performance.

What is Boeing's track record with the EA-18G program and similar defense contracts?

Boeing is the prime contractor for the EA-18G Growler program, having been responsible for its development and production. Their track record with this specific platform is extensive, involving significant engineering, manufacturing, and integration efforts. Boeing is one of the largest aerospace and defense contractors globally, with a long history of delivering complex military aircraft and systems to the U.S. Department of Defense and international partners. Their experience encompasses a wide range of aircraft types, including fighters, bombers, and specialized mission aircraft, suggesting a strong capability to manage programs like this.

What are the potential risks associated with a sole-source, long-duration RDT&E contract for advanced aircraft?

Sole-source contracts, like this one, carry inherent risks related to price competition. Without multiple bidders, there's less pressure to offer the lowest possible price, potentially leading to higher costs for the government. Long-duration RDT&E contracts also face risks such as scope creep, where requirements may evolve significantly over time, leading to cost overruns and schedule delays. Technological obsolescence is another concern; the technology being developed might be surpassed by adversaries or new innovations before the program concludes. Furthermore, reliance on a single contractor can create dependency and limit flexibility if performance issues arise.

How does this contract align with the Department of Defense's broader strategic goals for naval aviation and electronic warfare?

This contract directly supports the Department of Defense's strategic goals by investing in advanced capabilities for naval aviation, specifically in the critical area of electronic warfare. The EA-18G Growler is a cornerstone of the Navy's electronic attack strategy, providing essential capabilities to counter sophisticated threats in contested environments. Continued investment in its development, upgrades, or related components ensures the platform remains effective against evolving adversary capabilities. This aligns with strategic objectives to maintain air superiority, protect naval forces, and project power globally through advanced, technologically superior platforms.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: J S MCDONNELL BLVD, SAINT LOUIS, MO, 63166

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline