Boeing awarded $46M for missile and space systems modifications, with a 2031-day duration

Contract Overview

Contract Amount: $46,044,828 ($46.0M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2005-05-09

End Date: 2010-11-30

Contract Duration: 2,031 days

Daily Burn Rate: $22.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200508!000089!5700!FA8107!OC-ALC/LAD B52 !FA810705C0003 !A!N! !N! ! !20050509!20090430!039267141!039267141!009256819!N!THE BOEING COMPANY !7755 E MARGINAL WAY !SEATTLE !WA!98124!63000!033!53!SEATTLE !KING !WASHINGTON!+000015241825!N!N!000000000000!K014!MODIFICATION OF EQ/GUIDED MISSILES !A2 !MISSILE AND SPACE SYSTEMS !000 !* !336413!E! !3! ! ! ! ! !20200930!B! ! !A! !D!U!J!2!001!N!1G!Z!Y!A! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! !Y! ! !0001! !

Place of Performance

Location: TUKWILA, KING County, WASHINGTON, 98108

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $46.0 million to THE BOEING COMPANY for work described as: 200508!000089!5700!FA8107!OC-ALC/LAD B52 !FA810705C0003 !A!N! !N! ! !20050509!20090430!039267141!039267141!009256819!N!THE BOEING COMPANY !7755 E MARGINAL WAY !SEATTLE !WA!98124!63000!033!53!SEATTLE !KING… Key points: 1. Contract awarded for modification of existing equipment, indicating potential for sustainment and upgrade work. 2. Long contract duration of 2031 days suggests a need for sustained support and potential for follow-on work. 3. FIRM FIXED PRICE contract type implies that the contractor bears the risk of cost overruns. 4. The contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code, suggesting a specialized industrial base. 5. Awarded by the Department of the Air Force, indicating a focus on aerospace and defense capabilities.

Value Assessment

Rating: fair

The total award amount of $46,044,828.44 for modification of guided missiles and related systems appears to be within a reasonable range for complex defense contracts of this nature. However, without specific details on the scope of modifications, a precise value-for-money assessment is challenging. Benchmarking against similar modification contracts for missile systems would provide a clearer picture of cost-effectiveness. The fixed-price nature of the contract shifts cost risk to the contractor, which can be beneficial for the government if managed effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source, indicating that only one vendor was deemed capable of fulfilling the requirement. This could be due to proprietary technology, unique expertise, or the nature of the modification work on existing complex systems. The lack of competition means that price discovery through a competitive bidding process was not utilized, potentially leading to higher costs than if multiple vendors had vied for the contract.

Taxpayer Impact: Sole-source awards limit opportunities for taxpayers to benefit from competitive pricing. The government may have paid a premium due to the absence of a competitive bidding environment.

Public Impact

The primary beneficiaries are likely the U.S. Air Force and potentially other branches of the Department of Defense that utilize the modified missile systems. The services delivered involve the modification and upgrade of guided missile systems, enhancing their capabilities or extending their service life. The geographic impact is primarily within the United States, specifically related to defense installations and the contractor's facilities in Washington state. Workforce implications include employment for engineers, technicians, and manufacturing personnel at The Boeing Company and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing benefits for taxpayers.
Long contract duration could lead to scope creep if not managed tightly.
Modification of complex defense systems carries inherent technical and performance risks.

Positive Signals

FIRM FIXED PRICE contract type transfers cost overrun risk to the contractor.
Award to a major defense contractor like Boeing suggests access to specialized expertise.
Long duration may indicate a critical need for sustained system support.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on missile and space systems. The market for such specialized modifications is often dominated by a few large, experienced contractors due to the high technical barriers to entry and stringent security requirements. The total value of this contract, while significant, represents a portion of the broader defense spending on strategic weapon systems and their sustainment.

Small Business Impact

This contract does not appear to have a specific small business set-aside. As a sole-source award to a large prime contractor, The Boeing Company, the primary focus is on the prime contractor's capabilities. Subcontracting opportunities for small businesses may exist, but they are not explicitly mandated by the contract's set-aside status. The impact on the small business ecosystem would depend on Boeing's subcontracting strategy.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Air Force contracting and program management offices. Accountability measures are embedded within the contract terms, including performance requirements and payment schedules tied to milestones. Transparency is generally limited for sole-source defense contracts due to national security considerations, though contract awards are publicly reported. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Missile Systems Sustainment Programs
Guided Missile Development Contracts
Aerospace Manufacturing Contracts
Defense Equipment Modification Contracts
Air Force Weapon Systems Support

Risk Flags

Sole-source award limits price competition.
Long contract duration requires robust oversight.
Modification of complex defense systems carries inherent risks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $46.0 million to THE BOEING COMPANY. 200508!000089!5700!FA8107!OC-ALC/LAD B52 !FA810705C0003 !A!N! !N! ! !20050509!20090430!039267141!039267141!009256819!N!THE BOEING COMPANY !7755 E MARGINAL WAY !SEATTLE !WA!98124!63000!033!53!SEATTLE !KING !WASHINGTON!+000015241825!N!N!000000000000!K014!MODIFICATION OF EQ/GUIDED MISSILES !A2 !MISSILE AND SPACE SYSTEMS !000 !* !336413!E! !3! ! ! ! ! !202

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 Air Force).

What is the total obligated amount?

The obligated amount is $46.0 million.

What is the period of performance?

Start: 2005-05-09. End: 2010-11-30.

What is the specific nature of the 'modification of eq/guided missiles' being undertaken under this contract?

The provided data indicates the contract is for 'MODIFICATION OF EQ/GUIDED MISSILES' under NAICS code 'Other Aircraft Parts and Auxiliary Equipment Manufacturing'. While the exact technical specifications of the modifications are not detailed in the summary data, such contracts typically involve upgrades to enhance performance, extend service life, incorporate new technologies, or address obsolescence in existing missile systems. This could range from software updates and avionics improvements to structural enhancements or integration of new payloads. The long duration (2031 days) suggests a substantial scope of work beyond simple repairs, likely involving significant engineering and integration efforts.

How does the $46 million award compare to historical spending on similar missile modification contracts?

Benchmarking this $46 million award against similar missile modification contracts requires access to a broader dataset of historical procurements. However, for complex, long-duration modification projects on strategic weapon systems awarded to major defense contractors like Boeing, this figure is not unusual. Contracts for major system upgrades or sustainment can easily reach tens or hundreds of millions of dollars. The 'sole-source' nature of this award means direct price comparison with competitive bids is impossible. A comprehensive analysis would involve identifying comparable missile systems, the scope of their modifications, and the contract values awarded through competitive processes over the past decade.

What are the primary risks associated with a sole-source contract for missile system modifications?

The primary risks associated with a sole-source contract for missile system modifications include potential for inflated pricing due to the lack of competition, reduced incentive for the contractor to innovate or optimize costs, and a lack of transparency in the procurement process. Taxpayers may not receive the best possible value. Furthermore, reliance on a single contractor can create dependency and limit future flexibility if the contractor's performance falters or their business strategy changes. The government must rely heavily on its negotiation and oversight capabilities to mitigate these risks, ensuring the scope of work is well-defined and the price is fair and reasonable.

What is The Boeing Company's track record with Department of Defense missile system contracts?

The Boeing Company has a long and extensive track record as a major defense contractor for the Department of Defense, including significant involvement in missile systems. They are a key player in the development, production, and sustainment of various missile platforms, including strategic, tactical, and air-to-air missiles. Their experience spans decades and encompasses a wide range of complex engineering, manufacturing, and integration efforts. While specific performance metrics for all contracts are not publicly available, Boeing's continued large-scale awards from the DoD indicate a generally accepted capability and reliability in delivering sophisticated defense systems and related services.

How does the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' classification impact the understanding of this contract?

The classification under NAICS code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' suggests that this contract focuses on components or modifications related to aircraft and missile systems, rather than the complete assembly of a new missile. This could encompass specialized parts, subsystems, or integration services necessary for the modification of guided missiles. It implies that the work is likely being performed by a segment of Boeing that specializes in these types of components or integration services, potentially leveraging existing manufacturing capabilities and supply chains for aircraft and missile parts. This classification helps contextualize the type of industrial activity involved.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 7755 E MARGINAL WAY, SEATTLE, WA, 98124

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline