Air Force awards $50.4M contract for missile guidance set repair to Boeing, highlighting specialized maintenance needs

Contract Overview

Contract Amount: $50,387,122 ($50.4M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2025-09-28

End Date: 2026-09-27

Contract Duration: 364 days

Daily Burn Rate: $138.4K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: MISSILE GUIDANCE SET REPAIR (MGS)541330

Place of Performance

Location: HILL AFB, DAVIS County, UTAH, 84056

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $50.4 million to THE BOEING COMPANY for work described as: MISSILE GUIDANCE SET REPAIR (MGS)541330 Key points: 1. Contract focuses on critical repair services for missile guidance sets, essential for national defense. 2. Sole-source award to Boeing suggests unique technical expertise or existing system integration. 3. The contract duration of one year indicates a need for ongoing, specialized support. 4. Performance-based contract type (Cost Plus Award Fee) incentivizes contractor efficiency and quality. 5. Geographic focus on Utah points to a specific operational or maintenance hub. 6. High value suggests significant demand for these specialized repair services.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the scope of repair work and the number of missile guidance sets involved. The 'Cost Plus Award Fee' structure can lead to cost overruns if not managed tightly, but it also allows for flexibility in addressing complex technical issues. Compared to similar specialized defense maintenance contracts, the price appears within a reasonable range, though a lack of competition limits direct price comparison.

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 typically occurs when a contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the government's requirements. The lack of competition means the government did not benefit from a bidding process that could drive down prices through market forces.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding, as the government could not leverage multiple offers to secure the best possible price.

Public Impact

The primary beneficiaries are the U.S. Air Force units relying on operational missile systems. Services delivered include the repair and maintenance of critical missile guidance sets. Geographic impact is centered around the Air Force's operations and maintenance facilities in Utah. Workforce implications include the need for highly skilled technicians and engineers specializing in missile systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Cost Plus Award Fee contracts require robust government oversight to control spending.
Reliance on a single contractor for critical repair services poses a supply chain risk.

Positive Signals

Boeing's established expertise in aerospace and defense systems suggests a high likelihood of successful performance.
The contract's focus on specialized repair ensures the readiness of critical defense assets.
Performance incentives within the contract structure encourage quality and efficiency.

Sector Analysis

The aerospace and defense sector is characterized by high technological complexity and significant government investment. Contracts for specialized repair and maintenance of advanced weapon systems, such as missile guidance sets, are crucial for maintaining military readiness. This contract fits within the broader category of defense logistics and sustainment services, a substantial market segment driven by the need to keep sophisticated equipment operational. Comparable spending benchmarks for such niche repair services are difficult to ascertain publicly due to proprietary information and the specialized nature of the equipment.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the sole-source nature and the specialized technical requirements for repairing missile guidance sets, it is unlikely that small businesses would be primary contractors. However, The Boeing Company may engage small businesses as subcontractors for specific components or services, though this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Air Force's contracting and program management offices. Accountability measures are built into the Cost Plus Award Fee structure, which allows for award fees based on performance against defined criteria. Transparency may be limited due to the sole-source nature and the sensitive defense-related aspects of the work. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Missile Systems Sustainment
Aerospace and Defense Maintenance
Air Force Logistics Contracts
Weapon System Repair
Defense Industrial Base Services

Risk Flags

Sole-source award limits competition.
Cost Plus Award Fee contracts require careful management to control costs.
Reliance on a single contractor for critical components.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $50.4 million to THE BOEING COMPANY. MISSILE GUIDANCE SET REPAIR (MGS)541330

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 $50.4 million.

What is the period of performance?

Start: 2025-09-28. End: 2026-09-27.

What is Boeing's track record with similar missile guidance set repair contracts for the Department of Defense?

The Boeing Company has a long-standing and extensive track record of providing complex systems, components, and sustainment services to the Department of Defense, including for various missile platforms. While specific data on 'missile guidance set repair' contracts is not publicly itemized, Boeing's broad experience in aerospace manufacturing, integration, and maintenance suggests a strong capability. They are a prime contractor on numerous defense programs, often involving intricate electronic and mechanical systems. Historical performance reviews and contract awards from sources like the Federal Procurement Data System (FPDS) would provide more granular detail on their past performance in similar repair and sustainment roles, including on-time delivery, quality metrics, and cost control.

How does the 'Cost Plus Award Fee' (CPAF) structure typically impact contract costs compared to fixed-price contracts for specialized repair services?

Cost Plus Award Fee (CPAF) contracts allow the contractor to recover all allowable costs plus a base fee, with the potential for an additional award fee based on performance exceeding baseline requirements. For specialized repair services like missile guidance sets, CPAF offers flexibility to adapt to unforeseen technical challenges and evolving requirements that are difficult to define precisely upfront, unlike fixed-price contracts. However, CPAF contracts can lead to higher overall costs if the government's performance metrics are not well-defined or if contractor performance is not rigorously evaluated, as the potential for award fees incentivizes exceeding minimum standards. This structure requires robust government oversight to ensure costs remain reasonable and that award fees are justified by exceptional performance, making it potentially more expensive than a well-defined fixed-price contract but more adaptable for complex, uncertain work.

What are the primary risks associated with a sole-source award for critical defense maintenance, and how are they typically mitigated?

The primary risks of a sole-source award for critical defense maintenance include a lack of price competition, potentially leading to higher costs for taxpayers, and reduced incentive for the contractor to innovate or improve efficiency. There's also a risk of vendor lock-in and potential supply chain vulnerabilities if the sole provider faces operational issues. Mitigation strategies often involve extensive pre-award negotiations to ensure fair and reasonable pricing, stringent contract terms and performance metrics, and robust government oversight. The government may also invest in developing alternative sources or organic capabilities over the long term to reduce reliance on a single vendor for critical systems. For specialized services, the government might conduct thorough market research to confirm the necessity of a sole-source approach.

What is the typical annual spending range for contracts related to missile guidance set repair or similar specialized electronic/precision equipment maintenance within the Department of Defense?

Pinpointing a precise 'typical' annual spending range for missile guidance set repair is challenging due to the highly specialized nature of the equipment and the variability in contract scope, volume, and specific system types across different branches and platforms. However, contracts for the repair and maintenance of advanced electronic and precision equipment within the defense sector can range significantly, from hundreds of thousands to tens or even hundreds of millions of dollars annually, depending on the complexity, criticality, and quantity of items requiring service. This $50.4 million contract for one year suggests a substantial requirement for maintaining a specific set of critical components, aligning with the higher end for specialized sustainment services rather than routine maintenance.

What are the implications of the contract being performed in Utah for the local economy and defense infrastructure?

A contract of this magnitude being performed in Utah suggests a significant presence of defense-related activities and specialized technical expertise within the state. It implies that the Air Force utilizes or maintains missile systems that require servicing in this region, potentially leveraging existing infrastructure or specialized workforce capabilities in Utah. This can lead to job creation for skilled technicians, engineers, and support staff in the local economy. Furthermore, it reinforces Utah's role as a key location for defense logistics and maintenance operations, potentially attracting further investment and development in the aerospace and defense industrial base within the state.

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, HEATH, 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: $129,060,992

Exercised Options: $129,060,992

Current Obligation: $50,387,122

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA821421D0003

IDV Type: IDC

Timeline