Boeing Awarded $23.2M for SLEP III Fuse Assembly, Sole-Source Contract Raises Concerns
Contract Overview
Contract Amount: $23,203,656 ($23.2M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2018-05-17
End Date: 2026-04-30
Contract Duration: 2,905 days
Daily Burn Rate: $8.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: SLEP III FUSE ASSEMBLY
Place of Performance
Location: HEATH, LICKING County, OHIO, 43056
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $23.2 million to THE BOEING COMPANY for work described as: SLEP III FUSE ASSEMBLY Key points: 1. The contract is a sole-source award to The Boeing Company, indicating a lack of competition. 2. The fixed-price incentive contract type suggests potential for cost overruns if performance targets are not met. 3. The spending is categorized under 'Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing'. 4. The contract duration is substantial, spanning over 2900 days, requiring ongoing oversight.
Value Assessment
Rating: questionable
The contract value of $23.2 million for a fuse assembly is difficult to assess without specific unit cost data. The fixed-price incentive structure introduces risk, as the final cost could exceed initial estimates if performance incentives are not achieved efficiently.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, which limits price discovery and potentially leads to higher costs for taxpayers. The sole-source nature suggests a unique capability or proprietary technology held by The Boeing Company, but it warrants scrutiny to ensure fair pricing.
Taxpayer Impact: The lack of competition in this sole-source award may result in higher costs for taxpayers compared to a competitively bid contract.
Public Impact
Taxpayers may be paying a premium due to the absence of competitive bidding. The long contract duration necessitates continuous monitoring to ensure value for money. The specific application of the SLEP III fuse assembly is not detailed, limiting public understanding of its necessity.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Fixed-price incentive contract risk
Positive Signals
- Awarded to a known defense contractor
- Contract supports Department of Defense needs
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically for guided missile and space vehicle parts. Benchmarks for similar sole-source contracts for specialized components are often difficult to establish due to unique requirements and limited market availability.
Small Business Impact
There is no indication that small businesses were involved in this sole-source award. The contract is directly with a large prime contractor, The Boeing Company, suggesting no subcontracting opportunities for small businesses were explicitly mandated or highlighted in this award.
Oversight & Accountability
The sole-source nature of this contract necessitates robust oversight from the Department of the Air Force to ensure that pricing is fair and that the contractor is meeting all performance requirements. Regular audits and performance reviews are crucial for accountability.
Related Government Programs
- Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award limits competition and potentially inflates costs.
- Fixed-price incentive contract carries risk of cost overruns.
- Long contract duration requires sustained oversight.
- Lack of transparency regarding specific component function and necessity.
- No clear indication of small business participation.
Tags
other-guided-missile-and-space-vehicle-p, department-of-defense, oh, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $23.2 million to THE BOEING COMPANY. SLEP III FUSE ASSEMBLY
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 $23.2 million.
What is the period of performance?
Start: 2018-05-17. End: 2026-04-30.
What is the justification for the sole-source award, and has a thorough market research been conducted to confirm no other capable sources exist?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. A comprehensive market research report should be available to substantiate this decision, demonstrating that alternatives were explored and found unsuitable or unavailable, thereby ensuring the government is not unnecessarily foregoing competitive pricing.
How does the unit cost of this fuse assembly compare to similar components or previous iterations, considering the fixed-price incentive structure?
Assessing the unit cost requires detailed breakdowns not provided in the award data. The fixed-price incentive (FPI) contract means the final price is tied to performance targets. If Boeing exceeds cost goals, the government pays more, up to a ceiling. Conversely, if they perform better than expected, savings are shared. Without historical data or benchmarks for comparable fuse assemblies, it's challenging to determine if the current FPI pricing is optimal or if the incentive structure adequately protects taxpayer interests.
What are the specific performance metrics tied to the incentive portion of the contract, and how are they measured to ensure effectiveness and value?
The effectiveness and value of this contract hinge on the specific performance metrics defined within the Fixed Price Incentive (FPI) agreement. These metrics likely relate to factors such as delivery timelines, quality standards, reliability, or specific technical performance characteristics of the SLEP III fuse assembly. The Department of the Air Force must have a clear, objective, and measurable system in place to track Boeing's performance against these metrics and to accurately calculate any incentive payments or penalties.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing
Product/Service Code: NUCLEAR ORDNANCE
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: FA812816R0004
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Address: 801 IRVING WICK DR W, NEWARK, OH, 43056
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $32,719,303
Exercised Options: $23,203,656
Current Obligation: $23,203,656
Subaward Activity
Number of Subawards: 14
Total Subaward Amount: $9,972,023
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2018-05-17
Current End Date: 2026-04-30
Potential End Date: 2026-04-30 00:00:00
Last Modified: 2025-12-01
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