Naval Air Systems Command awarded $8.99B for F-18 Hornet aircraft manufacturing, with a significant portion going to The Boeing Company

Contract Overview

Contract Amount: $8,997,913,572 ($9.0B)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 1999-02-12

End Date: 2017-12-06

Contract Duration: 6,872 days

Daily Burn Rate: $1.3M/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: 199908!1700!0757!AA4E0!NAVAL AIR SYSTEMS COMMAND !N0001999C1226 !A!*!* !19990212!20000930!161213269!006265946!009256819!N!76301!MCDONNELL DOUGLAS CORPORATION !P.O. BOX 516 !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST. LOUIS (CITY) !MISSOURI !0001!+000040000000!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !2AFX!F-18 HORNET !3721!1!*!*!*!B!A!*!D !N!L!1!001!N!1A!A!N!F!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!A!N!*!*!*!*!*!

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $9.00 billion to THE BOEING COMPANY for work described as: 199908!1700!0757!AA4E0!NAVAL AIR SYSTEMS COMMAND !N0001999C1226 !A!*!* !19990212!20000930!161213269!006265946!009256819!N!76301!MCDONNELL DOUGLAS CORPORATION !P.O. BOX 516 !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST. LO… Key points: 1. Contract value of $8.99 billion indicates a substantial investment in aircraft manufacturing. 2. The contract was not competed, raising questions about potential cost efficiencies and market price discovery. 3. Long contract duration of over 18 years suggests a long-term need for these aircraft or related services. 4. The primary contractor, The Boeing Company, is a major player in the aerospace industry. 5. The contract falls under the Aircraft Manufacturing NAICS code, specifically for Aircraft Manufacturing. 6. The Product Service Code (PSC) is 76301, relating to Aircraft Components.

Value Assessment

Rating: questionable

The total contract value of $8.99 billion is substantial. Without comparable contract data for F-18 Hornet manufacturing or sustainment, it is difficult to benchmark the value for money. The 'NOT COMPETED' status also limits the ability to assess pricing against market rates. The long duration and significant funding suggest a critical need, but the lack of competition prevents a thorough value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one responsible source is available or when there is a compelling justification for not seeking competition. The lack of competition means that the government did not receive bids from multiple potential suppliers, which can limit price negotiation and potentially lead to higher costs.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without competing offers, there is less pressure on the contractor to offer the lowest possible price.

Public Impact

The primary beneficiary is the U.S. Navy, which receives F-18 Hornet aircraft and related components. Services delivered include the manufacturing and potentially sustainment of critical fighter aircraft. The geographic impact is primarily within the United States, supporting aerospace manufacturing jobs. Workforce implications include employment for engineers, technicians, and manufacturing personnel at the contractor's facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Long contract duration could indicate potential for cost overruns or scope creep without active oversight.
Sole-source awards can reduce the incentive for innovation and efficiency compared to competitive environments.

Positive Signals

The contract supports the production of essential military aircraft, contributing to national security.
The substantial value suggests a significant and ongoing requirement for these capabilities.
The long-term nature of the contract may provide stability for the contractor and its workforce.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft manufacturing. The market for military aircraft is characterized by high barriers to entry, significant R&D costs, and long production cycles. Major defense contractors like The Boeing Company dominate this space. Comparable spending benchmarks would involve looking at other large-scale aircraft procurement contracts within the Department of Defense.

Small Business Impact

This contract does not appear to have a small business set-aside component. The primary awardee, The Boeing Company, is a large corporation. There is no explicit information regarding subcontracting plans for small businesses within the provided data, which could represent missed opportunities for small business participation in the aerospace supply chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which ensures compliance with contract terms and quality standards. Accountability measures are inherent in the contract's performance requirements and payment schedules. Transparency is limited due to the sole-source nature and the lack of publicly available detailed performance data.

Related Government Programs

F/A-18 Hornet Program
Naval Aviation Procurement
Defense Aircraft Manufacturing
Fixed-Price Incentive Contracts
Sole-Source Defense Contracts

Risk Flags

Sole-source award
Lack of competition
Long contract duration
High contract value

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $9.00 billion to THE BOEING COMPANY. 199908!1700!0757!AA4E0!NAVAL AIR SYSTEMS COMMAND !N0001999C1226 !A!*!* !19990212!20000930!161213269!006265946!009256819!N!76301!MCDONNELL DOUGLAS CORPORATION !P.O. BOX 516 !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST. LOUIS (CITY) !MISSOURI !0001!+000040000000!N!N!000000000000!1510!AIRCRAFT FIXED WING !A1A!AIRFRAMES AND SPARES !2AFX!F-18 HORNET !3721!1!*!*!*!B!A!*!D !N!L!1!0

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 $9.00 billion.

What is the period of performance?

Start: 1999-02-12. End: 2017-12-06.

What is the historical spending trend for F-18 Hornet aircraft manufacturing and sustainment by the Naval Air Systems Command?

The provided data reflects a single, large award of $8.99 billion for F-18 Hornet aircraft manufacturing, awarded in 1999 and ending in 2017. This specific award represents a significant portion of the program's lifecycle funding. To understand the broader historical spending trend, one would need to access historical contract databases to aggregate all awards related to the F-18 program, including previous production runs, upgrades, spare parts, and sustainment contracts over several decades. This would reveal the total investment in the F-18 platform and its evolution over time, highlighting periods of high procurement versus sustainment spending.

How does the per-unit cost of the F-18 Hornet under this contract compare to other similar fighter aircraft programs?

The provided data does not include per-unit cost information, making a direct comparison difficult. The total award of $8.99 billion is for an unspecified number of aircraft and potentially includes associated support. To assess per-unit cost, the total value would need to be divided by the number of aircraft delivered. Furthermore, comparing the F-18 to other fighter aircraft requires identifying comparable platforms in terms of age, capabilities, and production volume. Fighter jet costs vary widely based on technological sophistication, stealth capabilities, and intended mission roles. A comprehensive analysis would involve benchmarking against aircraft like the F-16, F-35, or international equivalents, considering their respective development and production costs.

What are the specific performance metrics and risk indicators associated with this $8.99 billion F-18 Hornet contract?

The provided data indicates the contract type is 'FIXED PRICE INCENTIVE' (FPI), which implies performance metrics are tied to cost, schedule, and potentially technical specifications. Under an FPI contract, the final price is determined by the contractor's performance against target costs and prices. Specific risk indicators for this contract would likely include potential cost overruns if the contractor exceeds target costs, schedule delays impacting fleet readiness, and technical performance issues affecting aircraft capabilities. The 'NOT COMPETED' status itself is a risk indicator, suggesting potential lack of price competition. Detailed performance metrics and specific risk mitigation plans are typically found in the contract's statement of work and associated documentation, which are not fully detailed in the provided summary data.

What is the track record of The Boeing Company in delivering large-scale aircraft manufacturing contracts, particularly for naval aviation?

The Boeing Company has a long and extensive track record in delivering large-scale aircraft manufacturing contracts, including for naval aviation. As a primary contractor for numerous military aircraft programs, including variants of the F-18 (Super Hornet, Growler), F-15, and previously the C-17, Boeing has demonstrated its capability to produce complex systems. Their experience spans decades, involving significant production volumes, integration of advanced avionics, and adherence to stringent military specifications. While specific performance details for every contract are not always public, Boeing's continued role as a major defense contractor suggests a generally reliable performance history in meeting the demanding requirements of the Department of Defense and allied nations for fighter and support aircraft.

How has the $8.99 billion expenditure on F-18 Hornets impacted the overall defense budget and naval aviation readiness over the contract's lifespan?

An expenditure of $8.99 billion represents a significant allocation within the Department of Defense budget, particularly for naval aviation. This funding directly supported the production and delivery of F-18 aircraft, which are crucial for maintaining the Navy's carrier air wing capabilities and overall air superiority. The long duration of the contract (1999-2017) implies that these funds were disbursed over many fiscal years, influencing budget planning and resource allocation. The impact on readiness would be positive, as the contract ensured the continued supply of operational aircraft to replace aging platforms and meet operational tempo requirements. However, such large investments also mean resources were potentially diverted from other defense priorities or programs.

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 INCENTIVE (L)

Contractor Details

Address: 6200 JS MCDONNELL BLVD, SAINT LOUIS, MO, 63134

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline