Boeing's $347M Joint Direct Attack Munition contract awarded by the Air Force, with no competition

Contract Overview

Contract Amount: $347,248,196 ($347.2M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2023-03-01

End Date: 2025-07-30

Contract Duration: 882 days

Daily Burn Rate: $393.7K/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 $347.2 million to THE BOEING COMPANY for work described as: JOINT DIRECT ATTACK MUNITION (JDAM) Key points: 1. The contract value represents a significant investment in precision-guided munitions. 2. Sole-source award raises questions about potential price inflation and lack of market pressure. 3. Long-term contract duration suggests sustained demand for JDAM systems. 4. Fixed-price contract type shifts cost risk to the contractor, but oversight is crucial. 5. The award is concentrated within the Defense sector, specifically for ammunition manufacturing. 6. Lack of small business involvement noted, indicating a focus on large prime contractors.

Value Assessment

Rating: fair

Benchmarking the value of this specific Joint Direct Attack Munition (JDAM) contract is challenging without detailed cost breakdowns and comparisons to similar sole-source awards. However, the substantial dollar amount suggests a critical capability for the Department of Defense. The firm fixed-price structure is generally favorable for the government, but the absence of competition means there's no direct market validation of the pricing. Further analysis would require comparing unit costs to historical JDAM procurements or similar munition systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of the Air Force did not solicit bids from multiple potential suppliers. This approach is typically used when a specific contractor possesses unique capabilities, proprietary technology, or when urgent needs preclude a competitive process. The lack of competition limits price discovery and may result in higher costs for the government compared to a fully competed award.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive bidding, as there is no market pressure to drive down prices. This also limits opportunities for other capable manufacturers to enter the market and potentially offer more cost-effective solutions.

Public Impact

The primary beneficiaries are the U.S. Air Force and potentially other branches of the military requiring advanced air-to-ground munitions. The contract delivers critical Joint Direct Attack Munition (JDAM) systems, enhancing the precision strike capabilities of U.S. airpower. Geographic impact is national, supporting defense readiness across various operational theaters. Workforce implications are likely concentrated within The Boeing Company's manufacturing facilities, particularly in Missouri, supporting skilled labor in aerospace and defense manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially leading to higher unit costs.
Lack of transparency in pricing due to no-bid nature.
Long-term contract duration could lock in potentially suboptimal pricing if market conditions change.
No explicit small business set-aside or subcontracting goals mentioned, potentially limiting small business participation.

Positive Signals

Firm fixed-price contract shifts cost overrun risk to the contractor.
Awarding to a known prime contractor like Boeing suggests reliance on established capabilities and supply chains.
Sustained funding indicates a critical and ongoing need for this munition system.

Sector Analysis

The defense sector, particularly the segment focused on munitions and ordnance, is characterized by high technological barriers to entry and significant government procurement. The Joint Direct Attack Munition (JDAM) is a widely deployed precision-guidance kit that converts unguided bombs into 'smart' munitions. Spending in this area is substantial, driven by ongoing military operations and modernization efforts. Comparable spending benchmarks would involve analyzing other large-scale awards for similar munition systems or defense manufacturing contracts.

Small Business Impact

This contract does not appear to include specific small business set-aside provisions, nor is there an indication of mandated subcontracting goals for small businesses. The award to a large prime contractor like The Boeing Company suggests that the primary focus is on direct production by the awardee. This could limit opportunities for small businesses to participate directly in this specific contract, although they may be part of Boeing's broader supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. The firm fixed-price nature of the contract means that financial oversight will focus on ensuring delivery according to specifications and schedule, rather than detailed cost auditing. Transparency is limited due to the sole-source nature. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Precision-Guided Munitions Procurement
Air Force Ammunition Contracts
Joint Direct Attack Munition (JDAM) Program
Defense Manufacturing Contracts
Boeing Defense Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for price inflation
Limited small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $347.2 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 $347.2 million.

What is the period of performance?

Start: 2023-03-01. End: 2025-07-30.

What is the historical spending trend for Joint Direct Attack Munitions (JDAM) by the Department of Defense?

Historical spending on Joint Direct Attack Munitions (JDAM) by the Department of Defense has been substantial over the past two decades, reflecting their critical role in air operations. While specific annual figures fluctuate based on operational tempo, modernization programs, and budget allocations, the total investment runs into billions of dollars. For instance, prior to this award, cumulative spending on JDAM kits and related services has been consistently high. Analyzing trends requires examining annual defense appropriations and contract awards data, which often show significant outlays for munitions. This particular $347 million award represents a portion of that ongoing investment, underscoring the sustained demand for these precision-guided munitions.

How does the unit cost of JDAMs under this contract compare to previous procurements or industry benchmarks?

Direct comparison of unit costs for JDAMs under this specific $347 million contract to previous procurements or industry benchmarks is difficult without access to detailed pricing information, which is often proprietary or not publicly disclosed for sole-source awards. However, historical data suggests that the unit cost of JDAM kits has varied based on quantity, specific variants, and contract terms. Given this is a sole-source award to The Boeing Company, there is a risk that the unit price may be higher than what could be achieved through a competitive process. A thorough benchmark analysis would involve comparing the implied unit cost (total award value divided by estimated quantity) against publicly available data for similar munitions or historical JDAM awards, adjusting for inflation and technological upgrades.

What are the specific risks associated with a sole-source award for critical defense munitions like JDAMs?

Sole-source awards for critical defense munitions like JDAMs present several risks. Primarily, the absence of competition can lead to higher prices for the government, as there is no market pressure to drive down costs. This can result in less value for taxpayer money. Secondly, it can stifle innovation and discourage potential competitors from entering the market, potentially reducing future sourcing options and increasing long-term reliance on a single provider. There's also a risk of complacency from the sole provider, potentially impacting quality or delivery schedules if not rigorously managed. Finally, without competitive benchmarking, it's harder to ensure the government is receiving the best possible value and technological advancements.

What is The Boeing Company's track record in delivering Joint Direct Attack Munitions (JDAM) and similar defense systems?

The Boeing Company has a long-standing and extensive track record in the production and delivery of Joint Direct Attack Munitions (JDAM) and a wide array of other defense systems. As a major defense contractor, Boeing has been a primary supplier of JDAM kits for many years, fulfilling numerous large-scale contracts for the U.S. military and allied nations. Their experience encompasses manufacturing, integration, and sustainment of complex aerospace and defense products. While specific performance metrics for individual contracts are not always public, Boeing's continued role as a key supplier for critical munitions like JDAM suggests a generally reliable performance history in meeting production demands and technical specifications, though like any large contractor, they may have faced challenges or scrutiny on specific programs over time.

How does this contract align with the Department of Defense's overall strategy for air-to-ground munitions?

This contract for Joint Direct Attack Munitions (JDAM) aligns with the Department of Defense's (DoD) overarching strategy of maintaining a robust and technologically advanced inventory of air-to-ground munitions. JDAMs are a cornerstone of precision strike capabilities, enabling aircraft to deliver ordnance accurately against high-value targets while minimizing collateral damage. The continued procurement signifies the DoD's ongoing commitment to equipping its air forces with reliable and effective 'smart' munitions. This strategy emphasizes the need for systems that can operate in contested environments and provide flexibility across various mission profiles. The sole-source nature, however, might warrant further examination regarding the long-term strategic implications for competition and innovation within the munitions sector.

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: $347,248,196

Exercised Options: $347,248,196

Current Obligation: $347,248,196

Subaward Activity

Number of Subawards: 32

Total Subaward Amount: $211,393,679

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