DoD's $54M Minuteman III Missile Guidance Repair Contract Awarded to Boeing Without Competition
Contract Overview
Contract Amount: $54,194,673 ($54.2M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2018-05-16
End Date: 2019-09-27
Contract Duration: 499 days
Daily Burn Rate: $108.6K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Official Description: THE PURPOSE OF THIS CONTRACT IS TO REPAIR THE GUIDANCE SUBSYSTEM OF THE MINTUEMAN III MISSILE.
Place of Performance
Location: HEATH, LICKING County, OHIO, 43056
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $54.2 million to THE BOEING COMPANY for work described as: THE PURPOSE OF THIS CONTRACT IS TO REPAIR THE GUIDANCE SUBSYSTEM OF THE MINTUEMAN III MISSILE. Key points: 1. The contract focuses on critical missile defense infrastructure, highlighting the importance of maintaining aging strategic assets. 2. Sole-source award to Boeing raises questions about price discovery and potential lack of competitive pressure. 3. The high value of the contract underscores the significant investment required for maintaining nuclear deterrent capabilities. 4. Repair and maintenance of complex defense systems represent a substantial and ongoing sector of government spending.
Value Assessment
Rating: questionable
The contract's Cost Plus Award Fee structure, combined with a lack of competition, makes it difficult to assess value for money. The awarded amount of $54.2M is a ceiling, and the final cost could vary significantly.
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. Without competition, there is no direct price discovery mechanism, potentially leading to higher costs than if multiple vendors had bid.
Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for the repair services, as there was no market pressure to drive down costs.
Public Impact
Ensures the continued operational readiness of the Minuteman III intercontinental ballistic missile (ICBM) system. Supports national security by maintaining a key component of the U.S. nuclear triad. The contract's duration and cost reflect the complexity and criticality of the defense systems involved.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type
- Critical defense system maintenance
Positive Signals
- Maintains strategic defense capability
- Awarded to incumbent prime contractor
Sector Analysis
This contract falls within the defense sector, specifically focusing on the repair and maintenance of complex electronic systems for strategic weapons. Spending in this area is driven by national security requirements and the lifecycle management of aging military hardware.
Small Business Impact
The contract was awarded to The Boeing Company, a large prime contractor. There is no indication of subcontracting opportunities for small businesses within the provided data.
Oversight & Accountability
The Department of the Air Force is the contracting agency. Oversight would typically involve monitoring contract performance, costs, and adherence to technical specifications, especially given the cost-plus nature of the award.
Related Government Programs
- Other Electronic and Precision Equipment Repair and Maintenance
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award lacks competitive pricing.
- Cost-plus contract type can lead to cost overruns.
- Maintenance of aging strategic assets is inherently expensive.
- Potential for contractor to prioritize fee over cost efficiency.
- Limited transparency into specific repair costs and processes.
Tags
other-electronic-and-precision-equipment, department-of-defense, oh, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $54.2 million to THE BOEING COMPANY. THE PURPOSE OF THIS CONTRACT IS TO REPAIR THE GUIDANCE SUBSYSTEM OF THE MINTUEMAN III MISSILE.
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 $54.2 million.
What is the period of performance?
Start: 2018-05-16. End: 2019-09-27.
What is the justification for awarding this critical missile component repair contract on a sole-source basis?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the need for seamless integration with existing systems, often held by the original equipment manufacturer. For the Minuteman III guidance subsystem, Boeing's role as the prime contractor likely necessitates their involvement for specialized knowledge and access to unique parts or repair procedures, potentially limiting viable alternatives.
How does the Cost Plus Award Fee structure impact cost control and taxpayer value in this sole-source scenario?
A Cost Plus Award Fee (CPAF) contract allows the contractor to recover allowable costs plus a fee that is composed of a base amount and an award amount, determined by performance against pre-defined criteria. In a sole-source context, the lack of competitive pressure means Boeing might have less incentive to aggressively control costs, as the fee structure could reward meeting targets rather than achieving the lowest possible cost. This can lead to higher overall spending for taxpayers compared to fixed-price contracts with robust competition.
What are the long-term implications for the Minuteman III program given the age of the system and the nature of this repair contract?
The ongoing need for repairs to critical components like the guidance subsystem highlights the aging nature of the Minuteman III ICBM. This contract signifies continued investment in maintaining legacy systems, which can become increasingly expensive over time due to specialized parts and labor. It also underscores the strategic decision-making required regarding the eventual modernization or replacement of the Minuteman III fleet.
Industry Classification
NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Other Electronic and Precision Equipment Repair and Maintenance
Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: COST PLUS AWARD FEE (R)
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: $54,442,161
Exercised Options: $54,442,161
Current Obligation: $54,194,673
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA821415D0002
IDV Type: IDC
Timeline
Start Date: 2018-05-16
Current End Date: 2019-09-27
Potential End Date: 2019-09-27 00:00:00
Last Modified: 2025-04-24
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