DoD's $7.25 Billion F/A-18 Contract with Boeing: A Deep Dive into Value and Competition
Contract Overview
Contract Amount: $7,246,510,578 ($7.2B)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2008-12-04
End Date: 2022-10-31
Contract Duration: 5,079 days
Daily Burn Rate: $1.4M/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: F/A-18 AIRCRAFT
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $7.25 billion to THE BOEING COMPANY for work described as: F/A-18 AIRCRAFT Key points: 1. Significant investment in advanced fighter aircraft manufacturing. 2. Sole-source contract raises questions about price discovery and competition. 3. Long contract duration (2008-2022) may impact adaptability to evolving needs. 4. Focus on fixed-price incentive contracts aims to balance cost and performance.
Value Assessment
Rating: questionable
The contract value of over $7.25 billion for F/A-18 aircraft manufacturing is substantial. Without competitive bidding, it's difficult to benchmark against similar contracts to definitively assess value for money.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to The Boeing Company. This lack of competition limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The absence of competition in such a large procurement could result in taxpayers paying a premium for these aircraft.
Public Impact
Ensures continued production of critical F/A-18 fighter jets for the U.S. Navy. Supports jobs and economic activity within the aerospace manufacturing sector, particularly in Missouri. Long-term commitment to a specific aircraft platform may limit future flexibility in defense strategy.
Waste & Efficiency Indicators
Waste Risk Score: 75 / 10
Warning Flags
- Lack of competition
- Long contract duration
- Potential for cost overruns with fixed-price incentive
Positive Signals
- Ensures supply of critical defense asset
- Established relationship with sole provider
Sector Analysis
The aerospace and defense sector is characterized by high R&D costs, long production cycles, and significant government procurement. This contract falls within the Aircraft Manufacturing sub-sector, a critical component of national defense spending.
Small Business Impact
The data indicates this is a large prime contract awarded to The Boeing Company. There is no direct information on the extent of small business subcontracting within this specific contract.
Oversight & Accountability
The long duration and sole-source nature of this contract warrant close oversight to ensure cost controls and performance metrics are met. Regular reviews of contract modifications and pricing are essential.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competitive bidding
- Potential for inflated costs
- Long-term dependency on a single supplier
- Risk of technological obsolescence over contract duration
- Limited transparency in pricing mechanisms
Tags
aircraft-manufacturing, department-of-defense, mo, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $7.25 billion to THE BOEING COMPANY. F/A-18 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 Navy).
What is the total obligated amount?
The obligated amount is $7.25 billion.
What is the period of performance?
Start: 2008-12-04. End: 2022-10-31.
What was the rationale for awarding this contract on a sole-source basis, and were alternative competitive strategies ever considered?
The rationale for a sole-source award typically stems from unique capabilities, proprietary technology, or the need for commonality with existing platforms. For the F/A-18, it's likely tied to Boeing's established expertise and production line. However, without detailed documentation, it's unclear if alternative competitive strategies were explored or deemed infeasible at the time of award.
How does the per-unit cost of the F/A-18 under this contract compare to similar aircraft procured competitively?
Direct comparison is challenging due to the sole-source nature and the specific contract type (fixed-price incentive). However, historical data and industry benchmarks for comparable fighter jets procured competitively would be necessary to assess if this contract achieved favorable pricing. The lack of competition inherently makes such a comparison less robust.
What mechanisms are in place to ensure the effectiveness and continued relevance of the F/A-18 fleet given the long-term nature of this contract?
Effectiveness is likely managed through performance metrics within the fixed-price incentive structure and ongoing sustainment contracts. Fleet relevance is addressed through separate modernization programs and future platform acquisition strategies. This contract focuses on production, while broader strategic planning dictates long-term fleet effectiveness and evolution.
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
Solicitation ID: N0001908R0056
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Address: 6200 JS MCDONNELL BLVD, SAINT LOUIS, MO, 63134
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $7,246,606,739
Exercised Options: $7,246,606,739
Current Obligation: $7,246,510,578
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2008-12-04
Current End Date: 2022-10-31
Potential End Date: 2022-10-31 00:00:00
Last Modified: 2023-04-26
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