DoD awards $239.6M for Joint Direct Attack Munitions to Boeing, raising concerns about limited competition
Contract Overview
Contract Amount: $239,555,451 ($239.6M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2021-09-13
End Date: 2023-09-13
Contract Duration: 730 days
Daily Burn Rate: $328.2K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: JOINT DIRECT ATTACK MUNITION (JDAM)
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $239.6 million to THE BOEING COMPANY for work described as: JOINT DIRECT ATTACK MUNITION (JDAM) Key points: 1. Significant contract value of $239.6 million awarded. 2. Sole-source award to The Boeing Company limits competitive pricing. 3. Ammunition manufacturing sector faces potential consolidation risks. 4. Defense sector spending on munitions remains a critical area.
Value Assessment
Rating: questionable
The contract's value of $239.6 million for JDAMs needs comparison against historical pricing and similar munitions. Without competitive bidding, it's difficult to ascertain if this price reflects fair market value or if taxpayers are overpaying.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, The Boeing Company, was considered. This lack of competition significantly hinders price discovery and may lead to higher costs for the government.
Taxpayer Impact: The sole-source nature of this award raises concerns about potential overspending, impacting taxpayer funds allocated for defense.
Public Impact
Taxpayers may be paying a premium due to the absence of competitive bidding. Reliance on a single supplier for critical munitions could pose supply chain risks. The Department of Defense's procurement strategy for essential weaponry warrants closer scrutiny.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for overpricing
- Supply chain dependency
Positive Signals
- Essential defense capability
- Established supplier relationship
Sector Analysis
This contract falls within the Ammunition (except Small Arms) Manufacturing sector, a critical component of the defense industrial base. Spending in this area is often substantial, driven by national security needs, but competition is vital to ensure cost-effectiveness.
Small Business Impact
The data provided does not indicate any specific involvement or benefit for small businesses in this contract award. The sole-source nature suggests a focus on an established prime contractor.
Oversight & Accountability
The sole-source award mechanism for such a significant defense contract warrants robust oversight to ensure fair pricing and prevent potential waste, fraud, or abuse. Accountability for the justification of the sole-source decision is crucial.
Related Government Programs
- Ammunition (except Small Arms) Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award lacks competition.
- Potential for inflated pricing.
- Dependency on a single supplier.
- Limited transparency in price justification.
- Risk of supply chain disruption.
Tags
ammunition-except-small-arms-manufacturi, department-of-defense, mo, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $239.6 million to THE BOEING COMPANY. JOINT DIRECT ATTACK MUNITION (JDAM)
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 $239.6 million.
What is the period of performance?
Start: 2021-09-13. End: 2023-09-13.
What is the justification for awarding this JDAM contract solely to The Boeing Company, and what steps are being taken to ensure fair pricing?
The justification for a sole-source award typically involves factors like unique capabilities, urgent need, or lack of viable alternatives. To ensure fair pricing, the agency should conduct thorough market research, benchmark against similar contracts, and potentially negotiate pricing aggressively. Independent cost analysis and review by oversight bodies are also critical to validate the price.
What are the potential risks associated with relying on a single supplier for Joint Direct Attack Munitions, especially given the contract's duration?
Sole reliance on The Boeing Company for JDAMs creates significant supply chain risks. This includes vulnerability to production disruptions, potential price increases due to lack of competition, and reduced leverage for the government in future negotiations. It also limits the government's ability to foster innovation or secure more cost-effective solutions from alternative manufacturers.
How does this contract contribute to the overall effectiveness and readiness of the Air Force's munitions capabilities?
The JDAM is a crucial component of the Air Force's precision-strike capabilities, enhancing mission effectiveness by enabling accurate targeting in various conditions. Ensuring a steady supply through this contract directly supports operational readiness. However, the effectiveness is intertwined with cost-efficiency; sustained high costs due to lack of competition could indirectly impact the overall value and availability of munitions.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: FA821313R3032
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 6200 JS MCDONNELL BLVD, SAINT LOUIS, MO, 63134
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: $239,555,451
Exercised Options: $239,555,451
Current Obligation: $239,555,451
Subaward Activity
Number of Subawards: 20
Total Subaward Amount: $219,993,771
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA821315D0002
IDV Type: IDC
Timeline
Start Date: 2021-09-13
Current End Date: 2023-09-13
Potential End Date: 2023-09-13 00:00:00
Last Modified: 2022-06-01
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