Boeing Awarded $411M for Small Diameter Bomb Production by Air Force
Contract Overview
Contract Amount: $41,145,440 ($41.1M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2023-05-31
End Date: 2025-12-31
Contract Duration: 945 days
Daily Burn Rate: $43.5K/day
Competition Type: NOT COMPETED
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: SMALL DIAMETER BOMB I PRODUCTION, LOT 19 USAF
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $41.1 million to THE BOEING COMPANY for work described as: SMALL DIAMETER BOMB I PRODUCTION, LOT 19 USAF Key points: 1. Significant contract value for critical munitions. 2. Sole-source award to Boeing raises competition concerns. 3. Potential for cost overruns due to fixed-price incentive contract type. 4. Ammunition manufacturing sector is vital for national defense.
Value Assessment
Rating: fair
The contract value of $411.45 million for Lot 19 production appears substantial. Benchmarking against similar ammunition contracts is difficult without more specific data on unit quantities and specifications, but the fixed-price incentive structure suggests potential for cost growth beyond initial estimates.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to The Boeing Company. This lack of competition limits price discovery and may result in higher costs for taxpayers compared to a fully competitive process.
Taxpayer Impact: The sole-source nature of this award means taxpayers may not be receiving the best possible price due to the absence of competitive bidding.
Public Impact
Ensures continued supply of essential munitions for the Air Force. Supports a major defense contractor and its supply chain. Potential for increased defense spending if costs escalate under the incentive contract.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price discovery.
- Fixed-price incentive contract type carries risk of cost overruns.
- No small business participation noted.
Positive Signals
- Addresses a critical defense need for munitions.
- Award to established prime contractor suggests reliable execution.
Sector Analysis
This contract falls within the defense manufacturing sector, specifically ammunition production. Spending in this area is driven by military readiness requirements and geopolitical factors. Benchmarks are highly dependent on the specific munition type and quantity.
Small Business Impact
There is no indication of small business participation in this contract award. Efforts to include small businesses in defense supply chains are often a priority, and their absence here warrants further review.
Oversight & Accountability
The Department of Defense's contracting processes are subject to oversight, but the sole-source nature of this award may reduce the effectiveness of competitive oversight mechanisms. Accountability for cost performance will be crucial under the incentive contract.
Related Government Programs
- Ammunition (except Small Arms) Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award limits competition.
- Fixed-price incentive contract risks cost overruns.
- Lack of small business participation.
- Limited transparency on justification for sole-source award.
Tags
ammunition-except-small-arms-manufacturi, department-of-defense, mo, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $41.1 million to THE BOEING COMPANY. SMALL DIAMETER BOMB I PRODUCTION, LOT 19 USAF
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 $41.1 million.
What is the period of performance?
Start: 2023-05-31. End: 2025-12-31.
What is the unit cost of the Small Diameter Bomb under this contract, and how does it compare to previous lots or similar munitions?
The provided data does not specify the unit quantity or the resulting per-unit cost for the Small Diameter Bomb in Lot 19. A precise comparison is therefore not possible. However, the fixed-price incentive contract type suggests that the final unit cost could fluctuate based on performance against established targets, potentially exceeding initial estimates if cost efficiencies are not realized.
What is the justification for awarding this contract sole-source, and what steps were taken to ensure fair and reasonable pricing without competition?
The justification for this sole-source award is not detailed in the provided data. Typically, sole-source contracts are justified by factors such as urgency, unique capabilities, or lack of viable alternatives. Without this information, it is difficult to assess whether fair and reasonable pricing was achieved, as competitive pressure, a key driver of cost efficiency, was absent.
What are the specific performance incentives and cost-sharing mechanisms in this fixed-price incentive contract, and how do they aim to ensure effective use of taxpayer funds?
The specific details of the performance incentives and cost-sharing mechanisms within this fixed-price incentive contract are not provided. Generally, these contracts establish a target cost and target profit, with adjustments to profit based on actual costs incurred. The government and contractor share in cost savings or overruns beyond agreed-upon limits, aiming to incentivize cost control and efficient production.
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: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Address: 6200 JAMES S 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: $41,145,440
Exercised Options: $41,145,440
Current Obligation: $41,145,440
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA867220D0001
IDV Type: IDC
Timeline
Start Date: 2023-05-31
Current End Date: 2025-12-31
Potential End Date: 2025-12-31 00:00:00
Last Modified: 2025-03-18
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