DoD Awards Boeing $30M for Minuteman III Missile Guidance Components
Contract Overview
Contract Amount: $29,974,420 ($30.0M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2018-10-15
End Date: 2025-12-31
Contract Duration: 2,634 days
Daily Burn Rate: $11.4K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: THE PUPOSE OF THIS ORDER IS TO PRODUCE THE LEVEL DETECTOR WHICH IS A KEY COMPONENT OF THE GUIDANCE SYSTEM OF THE MINUTEMAN III MISSILE.
Place of Performance
Location: HEATH, LICKING County, OHIO, 43056
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $30.0 million to THE BOEING COMPANY for work described as: THE PUPOSE OF THIS ORDER IS TO PRODUCE THE LEVEL DETECTOR WHICH IS A KEY COMPONENT OF THE GUIDANCE SYSTEM OF THE MINUTEMAN III MISSILE. Key points: 1. Critical component for Minuteman III missile guidance system. 2. Sole-source award to The Boeing Company. 3. Long-term contract extending through 2025. 4. High-value contract for a specialized defense component.
Value Assessment
Rating: questionable
The contract's Cost Plus Incentive Fee structure for a critical defense component warrants scrutiny. Without competitive bidding, it's difficult to ascertain if the $29.97M price reflects optimal value for the taxpayer.
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 potentially increases costs for the government.
Taxpayer Impact: The absence of competition for this critical missile component raises concerns about potential overspending and reduced taxpayer value.
Public Impact
Ensures continued operational readiness of the Minuteman III strategic missile system. Supports national defense capabilities through advanced guidance technology. Potential for cost overruns due to sole-source nature. Long-term commitment to a single supplier for a vital defense asset.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Long contract duration
Positive Signals
- Critical defense component
- Ensures system readiness
Sector Analysis
This contract falls within the Defense sector, specifically for electronic and precision equipment repair and maintenance. Spending in this area is often characterized by sole-source awards for highly specialized components, but competitive benchmarking is crucial for value assessment.
Small Business Impact
The contract data indicates no specific set-aside for small businesses. The prime contractor, Boeing, is a large aerospace company, suggesting limited direct opportunities for small businesses on this specific delivery order.
Oversight & Accountability
The sole-source nature of this award necessitates robust oversight from the Department of the Air Force to ensure cost control and performance standards are met throughout the contract's duration.
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 limits competition and price discovery.
- Cost Plus Incentive Fee structure can lead to cost overruns without strong oversight.
- Long contract duration may hinder adoption of future technologies or better value.
- Lack of small business participation noted.
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 $30.0 million to THE BOEING COMPANY. THE PUPOSE OF THIS ORDER IS TO PRODUCE THE LEVEL DETECTOR WHICH IS A KEY COMPONENT OF THE GUIDANCE SYSTEM OF THE MINUTEMAN 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 $30.0 million.
What is the period of performance?
Start: 2018-10-15. End: 2025-12-31.
What is the justification for the sole-source award, and what steps are taken to ensure fair and reasonable pricing without competition?
The justification for a sole-source award typically involves unique capabilities or proprietary technology held by a single contractor. For this contract, the Air Force must have determined Boeing as the only source capable of producing the level detector for the Minuteman III. To ensure fair pricing, the government likely conducts extensive price and cost analysis, comparing proposed costs to historical data, should-cost models, and industry benchmarks, even in the absence of competing offers.
What are the potential risks associated with a Cost Plus Incentive Fee (CPIF) contract for a critical defense component awarded on a sole-source basis?
A CPIF contract incentivizes both the contractor and the government to control costs, but when awarded sole-source for a critical component, the risk of inflated baseline costs increases. The government bears the risk of cost overruns if the contractor's performance doesn't meet targets, and the incentive structure might not be as effective without competitive pressure to drive efficiency. This combination requires stringent government oversight to manage performance and costs effectively.
How does the long contract duration (ending 2025) impact the government's ability to adapt to technological advancements or seek better value in the future?
The extended duration of this contract, ending in 2025, provides stability for the Minuteman III program but could limit the government's agility. If significant technological advancements emerge or if alternative, more cost-effective solutions become available, the government may be locked into the current sole-source arrangement. Future contract planning should consider incorporating options for re-competition or technology refresh clauses to mitigate this risk.
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: GUIDED MISSLES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: COST PLUS INCENTIVE FEE (V)
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: $29,974,420
Exercised Options: $29,974,420
Current Obligation: $29,974,420
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: 2018-10-15
Current End Date: 2025-12-31
Potential End Date: 2027-12-31 00:00:00
Last Modified: 2026-01-07
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