Navy Awards $15B for F/A-18 E/F Aircraft Manufacturing to McDonnell Douglas Corporation

Contract Overview

Contract Amount: $11,436,586,256 ($11.4B)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2003-12-29

End Date: 2017-01-30

Contract Duration: 4,781 days

Daily Burn Rate: $2.4M/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Defense

Official Description: 200411!000011!1700!AA4M0 !NAVAL AIR SYSTEMS COMMAND !N0001904C0014 !A!N! !N! ! !20031229!20110930!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST. LOUIS (CITY) !MISSOURI !+000166491870!N!Y!008662099934!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !549 !F/A-18 E/F !336411!E! !3!C!S! ! ! !99990909!B! ! !A! !D!U!K!1!001!N!1A!A!W!F! ! !N!C!N! ! ! !Z!Z!A!A!000!A!B!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 $11.44 billion to THE BOEING COMPANY for work described as: 200411!000011!1700!AA4M0 !NAVAL AIR SYSTEMS COMMAND !N0001904C0014 !A!N! !N! ! !20031229!20110930!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST. … Key points: 1. This contract represents a significant investment in advanced fighter aircraft, specifically the F/A-18 E/F model. 2. The primary contractor, McDonnell Douglas Corporation (now part of Boeing), has a long history in defense manufacturing. 3. The contract's 'Not Competed' status raises questions about the procurement process and potential missed savings. 4. The sector is dominated by a few large defense contractors, limiting competition and potentially increasing costs.

Value Assessment

Rating: questionable

The contract value of $15 billion is substantial. Without specific per-unit cost data or benchmarks for similar aircraft programs, it's difficult to definitively assess its value. However, the lack of competition suggests potential for overpricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as 'Not Competed,' indicating a sole-source procurement. This method bypasses competitive bidding, which can lead to higher prices and reduced innovation as there is no market pressure to offer the best value.

Taxpayer Impact: The lack of competition in this large defense contract likely results in higher costs for taxpayers, as the government may not have secured the most favorable pricing.

Public Impact

Significant taxpayer funds allocated to a single defense contractor for advanced aircraft. Potential for reduced innovation and higher costs due to the absence of competitive bidding. Impact on the defense industrial base and the strategic capabilities of the U.S. Navy.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source procurement
Lack of transparency in pricing
Long contract duration

Positive Signals

Acquisition of critical defense assets
Support for domestic manufacturing jobs

Sector Analysis

This contract falls within the Defense sector, specifically Aircraft Manufacturing. Spending in this area is critical for national security but is often characterized by high costs, long development cycles, and limited competition due to specialized requirements.

Small Business Impact

The data does not indicate any specific provisions or subcontracting opportunities for small businesses within this contract. Large sole-source defense contracts often have limited direct impact on small businesses unless they are part of the prime contractor's supply chain.

Oversight & Accountability

The 'Not Competed' award status warrants further oversight to ensure the justification for bypassing competition was sound and that the pricing is fair. Accountability for the significant expenditure rests with the Naval Air Systems Command.

Related Government Programs

Aircraft Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competition may lead to inflated costs.
Potential for reduced technological advancement due to no competitive pressure.
Long contract duration increases risk of cost overruns and scope creep.
Limited transparency in pricing mechanisms.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.44 billion to THE BOEING COMPANY. 200411!000011!1700!AA4M0 !NAVAL AIR SYSTEMS COMMAND !N0001904C0014 !A!N! !N! ! !20031229!20110930!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST. LOUIS (CITY) !MISSOURI !+000166491870!N!Y!008662099934!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !549 !F/A-18 E/F !336411!E! !3!C!S! ! ! !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 $11.44 billion.

What is the period of performance?

Start: 2003-12-29. End: 2017-01-30.

What was the specific justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of viable alternatives. Without access to the specific documentation for this contract, it's impossible to detail the exact reasoning. However, such justifications are often scrutinized to ensure they genuinely preclude competition and do not simply serve to avoid the process.

How does the per-unit cost of the F/A-18 E/F under this contract compare to similar aircraft programs or previous contracts for the same model?

Benchmarking the per-unit cost is crucial for assessing value. Without access to detailed cost breakdowns or comparative data for the F/A-18 E/F across different contracts or against similar aircraft, a precise comparison is not possible. However, sole-source contracts are inherently at higher risk of inflated costs compared to competitively bid ones.

What measures were in place to ensure the effectiveness and performance of the F/A-18 E/F aircraft delivered under this extensive contract?

Effectiveness and performance are typically ensured through stringent contract specifications, quality assurance protocols, testing requirements, and acceptance criteria. For a contract of this magnitude and duration, oversight from the Defense Contract Management Agency (DCMA) would be critical in monitoring production, ensuring compliance with technical specifications, and verifying operational readiness.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

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

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Timeline