The Contract

The US Department of Defense Press Desk released today that Boeing [NYSE: BA] has been awarded a contract modification to the sum of $222,549,505 for the production of eight CH-47F Chinook helicopters.

 

Source Excerpt

Department of the Army Contract:

“The Boeing Co.-Philadelphia, Ridley Township, Pennsylvania, has been awarded a $222,549,505 firm-fixed-price modification (P00069) to contract W58RGZ-13-C-0002 for eight each CH-47F new build helicopters to support the Royal Saudi Land Forces Aviation Command (RSLFAC).  Work will be performed in Ridley Township, Pennsylvania, with an estimated completion date of July 30, 2021.  Fiscal 2017 foreign military sales funds in the amount of $222,549,505 were obligated at the time of the award.  U.S. Army Contracting Command Redstone Arsenal, Redstone Arsenal, Alabama, is the contracting activity.”

Source

 

Contract Interpretation

  • Firm-Fixed-Price: A contract with such a price is not subject to any adjustment due to costs in performing said contract. This is a maximum risk, full responsibility contract in which Boeing theoretically could end up eating costs that exceed the amount they’ve initially agreed upon. More
  • Modification: This contract modification (P00069) was created to build eight additional CH-47F Chinook than the original contract had entailed.

 

Contract W58RGZ-13-C-0002

This contract is for the foreign military sales of the CH-47F Chinook Helicopter. Modification P00069 is the addition of eight of these aircraft, headed for the Royal Saudi Land Forces Aviation Command. Previous foreign sales have been to the Netherlands, Turkey, and the United Arab Emirates.

Above: U.S. Soldiers with the 12th Combat Aviation Brigade conduct routine training flights and aircraft maintenance on the CH-47 Chinook helicopter at the Katterbach Army Airfield, Ansbach, Germany July 13, 2017. (U.S. Army video by Charles Rosemond)

Boeing refers to the Chinook as an advanced, multi-role aircraft. This helicopter utilized by the US Army for the transport of troops, armament, and fuel. In peaceful missions, the CH-47 performs perfectly as a means for evacuating refugees or bringing supplies. Nineteen countries currently rely on the Chinook. Boeing maintains that the helicopter will continue to see upgrades and have a spot in the American armed forces well beyond 2030.


Disclaimer

As of this moment, I do not own shares of The Boeing Company. My opinions are entirely my own and may or may not reflect the opinions of my peers on TickHounds. I am not being compensated for sharing my due diligence in any way other than what tips may be accrued.

Most information for this post was retrieved from various sources listed throughout the post. For other sources, see below:

CH-47F Chinook
Original Image Source