Boeing awarded $163M for Joint Direct Attack Munitions, a sole-source contract for critical defense capabilities

Contract Overview

Contract Amount: $163,000,002 ($163.0M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2023-09-14

End Date: 2026-03-31

Contract Duration: 929 days

Daily Burn Rate: $175.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: JOINT DIRECT ATTACK MUNITIONS (JDAM)

Place of Performance

Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $163.0 million to THE BOEING COMPANY for work described as: JOINT DIRECT ATTACK MUNITIONS (JDAM) Key points: 1. Contract awarded to a single, established supplier, raising questions about price competitiveness. 2. Long-term contract duration suggests a sustained need for these munitions. 3. Fixed-price contract type aims to control costs, but without competition, actual value is harder to ascertain. 4. This award represents a significant investment in air-delivered ordnance for the Department of Defense. 5. The contract is for a specific type of munition, indicating a focused procurement strategy. 6. No small business set-aside was applied, suggesting the prime contractor is a large entity.

Value Assessment

Rating: fair

The contract's value of $163 million over approximately 2.5 years for Joint Direct Attack Munitions (JDAM) is substantial. As a sole-source award, direct comparison to similar contracts is challenging. However, the fixed-price nature of the contract provides some cost certainty for the government. Without competitive bidding, it's difficult to definitively benchmark the value for money, but the sustained award indicates a recognized need and potentially a fair price negotiated with a sole provider.

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 solicited. This approach is typically used when a unique capability is required, or when only one responsible source can provide the product or service. The lack of competition means that the government did not benefit from a bidding process that could drive down prices through market forces.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as there is no competitive pressure to ensure the lowest possible cost. The government must rely on negotiation and internal cost analysis to secure a fair price.

Public Impact

The primary beneficiaries are the U.S. Air Force and other branches of the Department of Defense, receiving critical munitions for air operations. The services delivered include the manufacturing and supply of Joint Direct Attack Munitions (JDAM), enhancing aerial combat capabilities. The geographic impact is national, supporting defense readiness across various theaters of operation. Workforce implications include continued employment at Boeing facilities involved in munition production, particularly in Missouri.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of open competition may stifle innovation from other potential suppliers.
Long contract duration could lock in pricing that may not reflect future market changes.
Dependence on a single supplier creates a potential supply chain risk if issues arise with the contractor.

Positive Signals

Award to a known, established contractor like Boeing suggests reliability and proven capability.
Fixed-price contract type offers cost predictability for the government.
Sustained award indicates the critical nature and ongoing requirement for JDAMs.
Contract ensures continued availability of essential munitions for national defense.

Sector Analysis

The defense industry, particularly the segment focused on munitions manufacturing, is characterized by high barriers to entry due to specialized technology, stringent quality control, and significant capital investment. The Joint Direct Attack Munitions (JDAM) program is a key component of modern air power, providing precision-guided capabilities. Spending in this sector is driven by geopolitical factors and military readiness requirements. Comparable spending benchmarks are difficult to establish precisely due to the classified nature of some defense procurements and the unique specifications of munitions, but this award represents a significant portion of annual spending on air-launched ordnance.

Small Business Impact

This contract was not set aside for small businesses, and the prime contractor, The Boeing Company, is a large aerospace and defense corporation. There is no explicit information provided regarding subcontracting plans for small businesses within this specific award. Without a small business set-aside or specific subcontracting goals mandated, the direct impact on the small business defense ecosystem from this particular contract is likely minimal, though Boeing may engage small businesses in its broader supply chain.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Air Force, likely through contracting officers and program managers. Accountability measures are embedded in the fixed-price contract terms, requiring delivery of specified munitions. Transparency is limited due to the sole-source nature and the defense sector context. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Air-to-Ground Munitions
Precision Guided Munitions
Ordnance Manufacturing
Defense Procurement
Aerospace Manufacturing
Joint Direct Attack Munitions (JDAM) Program

Risk Flags

Sole-source award
Lack of competition
Potential for higher costs
Supply chain dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $163.0 million to THE BOEING COMPANY. JOINT DIRECT ATTACK MUNITIONS (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 $163.0 million.

What is the period of performance?

Start: 2023-09-14. End: 2026-03-31.

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

Historical spending on Joint Direct Attack Munitions (JDAM) by the Department of Defense has been substantial over the years, reflecting their critical role in air operations. While specific annual figures fluctuate based on operational tempo, inventory needs, and technological upgrades, the program has consistently represented a significant investment. For instance, in the years following major conflicts, spending often increased to replenish stocks. More recently, as the DoD focuses on modernizing its arsenal and countering peer adversaries, investments continue, though the exact dollar amounts are often part of broader defense budgets and specific contract awards. The $163 million awarded to Boeing in this instance is indicative of ongoing, significant procurement activity for these munitions, suggesting a sustained level of investment in this capability over the last decade.

How does the price of JDAMs under this contract compare to previous awards or market benchmarks, given it's a sole-source contract?

Directly comparing the price of JDAMs under this sole-source contract to previous awards or market benchmarks is challenging due to the lack of competitive bidding. Sole-source contracts inherently limit price discovery through market forces. While the government negotiates with The Boeing Company, the absence of competing offers means there's no direct market validation of the price. Historical data on JDAM pricing might exist, but without knowing the specific configuration, quantity, and year of previous awards, a precise comparison is difficult. The government likely relies on cost analysis, historical pricing trends, and profit margin reviews to ensure the negotiated price is fair, but the 'value for money' is less transparent than in a competed procurement.

What are the primary risks associated with a sole-source contract for critical munitions like JDAMs?

The primary risks associated with a sole-source contract for critical munitions like JDAMs include potential overpricing due to the lack of competition, reduced incentive for the contractor to innovate or improve efficiency, and increased vulnerability to supply chain disruptions if the sole provider faces production issues. Taxpayers may bear a higher cost than if the contract were competed. Furthermore, reliance on a single source can create strategic risks if geopolitical factors affect the supplier's ability to deliver or if the government's needs evolve beyond the sole provider's capabilities. Ensuring robust oversight and negotiation strategies are crucial to mitigate these risks.

What is the expected performance and reliability of the JDAMs being procured under this contract?

The Joint Direct Attack Munitions (JDAM) are a well-established and highly reliable family of munitions designed to provide adverse weather, precision-guided capability to standard gravity bombs. The JDAM kits, manufactured by The Boeing Company, convert unguided bombs into accurate, GPS-guided weapons. Performance expectations under this contract would align with the known capabilities of the JDAM system, including high accuracy (typically within meters of the target coordinates), effective range, and reliability in various environmental conditions. The fixed-price contract likely specifies stringent quality control and acceptance testing requirements to ensure the delivered munitions meet or exceed established performance and reliability standards critical for military operations.

What is the strategic importance of JDAMs to the U.S. Air Force and the Department of Defense?

Joint Direct Attack Munitions (JDAMs) are of paramount strategic importance to the U.S. Air Force and the Department of Defense because they significantly enhance the effectiveness and efficiency of air power. JDAMs enable aircraft to deliver precision strikes against a wide range of targets, including moving ones, with high accuracy, even in adverse weather conditions. This precision minimizes collateral damage and reduces the number of sorties required to neutralize a target, thereby saving resources and reducing risk to aircrews. Their integration with various aircraft platforms and their relatively lower cost compared to other precision-guided munitions make them a versatile and indispensable component of the U.S. military's arsenal for both combat operations and strategic deterrence.

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

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: $163,000,002

Exercised Options: $163,000,002

Current Obligation: $163,000,002

Subaward Activity

Number of Subawards: 42

Total Subaward Amount: $102,381,788

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