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How Do Boeing’s Recent Issues Affect Their Position as a Contractor for Defense Solutions?

Brendan Ryan

This story is relevant to defense and security because it focuses on the scope of the current issues at Boeing, and how deeply rooted they are. Boeing’s production problems with commercial aircraft extend into their defense and space unit, and assembly line problems are found throughout the company’s several manufacturing facilities. Despite these delays and a general lack of quality assurance, the Department of Defense continues to contract the Seattle-based aerospace and defense company.

Image via Getty Images

Since the turn of the year, Boeing has found itself mired in several major issues. The headlines began on January 5th, when the door-plug of a new 737 MAX 9 jet blew off on an Alaska Airlines flight shortly after taking off from Portland, Oregon. The major aerospace producer has struggled to clear its name since then, with reports from former employees claiming a lack in manufacturing standards and proper procedures from both Boeing and its suppliers. Countless difficulties have culminated in Boeing announcing on March 25th that CEO David Calhoun will be stepping down by the end of the year, alongside immediate changes at the board and executive level. These shake-ups are expected to further current delays on the assembly line with production of 737 MAX jets and 787 Dreamliners, which will freeze orders from major airlines and prove to be extremely costly.

Amidst accusations that the company has prioritized shareholder profits over safety and quality measures, the Department of Defense continues to award Boeing with numerous high-grossing contracts for military aircraft and other solutions. These contracts are published by the DoD daily, and the March 25th posting, the day of Calhoun’s exit announcement, includes two separate orders to Boeing that total over $107 million. These contracts are a regular occurrence for Boeing -- defense, space and security operations made up roughly a third of the company’s revenue in fiscal year 2023. With frequent flyers struggling to feel comfortable riding on a Boeing commercial airplane, why does the US Government still trust the manufacturer with so much defense equipment?

While there are many performance and service expectations defined in Boeing’s deals with commercial airlines, contracts with the DoD, and the US Government as a whole, are a different story. The federal government works with hundreds of firms to obtain defense, tech, logistics and consulting services and grants several new contracts each day. The bylaws regarding the purchasing process of these solutions are outlined by a document called the Federal Acquisition Regulation (FAR). Additionally, defense contractors like Boeing, RTX, or Lockheed Martin are subject to further documentation, called the Defense Federal Acquisition Regulation Supplement (DFARS).

These regulations include many stipulations that allow for the US Government to monitor production quality or terminate for convenience if “it is in the Government’s best interest”. Faced with constant pressure of federal inspection and precise specifications, Boeing is obligated to monitor its military assembly line and suppliers closely to ensure every piece of equipment delivered to the DoD is perfect. The commercial business unit is under significantly more public scrutiny, especially recently, but military operations are subject to near-constant perusal and additional legal obligations.

Despite the watchful eye and fine print, the company has faced several problems with its defense and space products. Among them, Boeing was tasked with building the new 747 variant for the President, which famously sports the call sign Air Force One while in use. Increased costs and labor issues have caused production delays in the iconic aircraft, frustrating the Pentagon. Other deliveries to the Air Force and Navy are well behind schedule, and Boeing’s $4.2 billion contract with NASA for Starliner capsules is yet to result in an astronaut taking flight on the product.

Even with significant delays on the military side of the company and numerous high-stakes issues with their commercial aircraft, the Department of Defense still trusts Boeing’s products and continues to spend big with them. Their manufacturing of military solutions goes back nearly a century, and that isn’t likely to change over recent struggles. The company may lack accountability to the hundreds of thousands of passengers that ride their various commercial planes each day, but Boeing’s commitment to their deep-seeded relationship with the US Government appears to be as strong as ever.


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