Boeing awarded $41.4M for MMIII program telemetry, with no competition

Contract Overview

Contract Amount: $41,411,686 ($41.4M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2025-12-03

End Date: 2028-03-03

Contract Duration: 821 days

Daily Burn Rate: $50.4K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FLIGHT TEST TELEMETRY AND TERMINATION (FT3) PRODUCTION FOR THE MMIII PROGRAM

Place of Performance

Location: LAYTON, DAVIS County, UTAH, 84041

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $41.4 million to THE BOEING COMPANY for work described as: FLIGHT TEST TELEMETRY AND TERMINATION (FT3) PRODUCTION FOR THE MMIII PROGRAM Key points: 1. Contract awarded to a single source, raising questions about price discovery. 2. Long-term contract duration (2025-2028) suggests a sustained need for these services. 3. Firm Fixed Price contract type offers cost certainty but limits flexibility. 4. The award is for specialized parts, indicating a niche but critical role. 5. No small business participation noted, potentially missing opportunities for smaller firms.

Value Assessment

Rating: questionable

The contract's value of $41.4 million for flight test telemetry and termination services for the MMIII program is difficult to benchmark without competitive data. As a sole-source award, there is no direct comparison to assess if the pricing is optimal or represents good value for money. The firm fixed-price structure provides cost predictability for the government, but the absence of competition means the government cannot be certain it secured the best possible price. Further analysis would require understanding the specific technical requirements and market rates for such specialized services.

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 considered. This approach is typically used when a unique capability or proprietary technology is required, or in cases of urgent need where competition is not feasible. The lack of competition means there was no opportunity for other qualified companies to bid, which can limit price discovery and potentially lead to higher costs for the government compared to a competitively bid contract. The rationale for sole-sourcing should be clearly documented to ensure it was justified.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without multiple bids, the government lacks assurance that the price reflects the lowest reasonable cost for the required services.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Air Force, which relies on these services for the MMIII program. Services delivered include flight test telemetry and termination, crucial for missile system development and safety. The geographic impact is primarily within Utah, where the contract is being performed. Workforce implications include specialized engineering and technical roles at The Boeing Company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings.
Lack of small business set-aside may exclude smaller, innovative firms.
Long-term contract duration could lead to vendor lock-in if not managed carefully.

Positive Signals

Award to incumbent contractor (Boeing) suggests proven capability and reliability for a critical program.
Firm Fixed Price contract provides budget certainty for the government.
Specialized nature of the work indicates a high level of technical expertise.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex supply chains, and significant government investment. Contracts for specialized components like flight test telemetry are vital for maintaining national security and technological superiority. The MMIII program falls within the broader category of strategic missile systems, a critical area for defense spending. Benchmarking this contract's value is challenging without comparable sole-source awards, but the overall spending in this sub-sector is substantial, driven by modernization and sustainment efforts.

Small Business Impact

This contract does not appear to include a small business set-aside, nor is there an indication of subcontracting goals for small businesses. Given the specialized nature of the work and the sole-source award to a large prime contractor, opportunities for small businesses may be limited unless Boeing proactively engages them in its supply chain. This could represent a missed opportunity to foster innovation and economic participation within the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely fall under the Department of the Air Force's contracting and program management offices. Accountability measures are inherent in the firm fixed-price structure, which obligates Boeing to deliver specific outcomes. Transparency may be limited due to the sole-source nature of the award, but contract performance reviews and milestone tracking should provide visibility. The Inspector General's office for the Department of Defense would have jurisdiction for audits and investigations if any irregularities were suspected.

Related Government Programs

Missile Defense Systems
Strategic Weapons Programs
Aerospace Manufacturing
Defense Production Act Title III

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns not borne by contractor
Limited small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.4 million to THE BOEING COMPANY. FLIGHT TEST TELEMETRY AND TERMINATION (FT3) PRODUCTION FOR THE MMIII PROGRAM

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 $41.4 million.

What is the period of performance?

Start: 2025-12-03. End: 2028-03-03.

What is the historical spending trend for flight test telemetry and termination services for the MMIII program?

Historical spending data for this specific contract line item is not readily available in the provided data. However, the current award of $41.4 million for a period of approximately 3 years (December 2025 to March 2028) suggests a significant and sustained investment in the MMIII program's testing and operational readiness. To understand historical trends, one would need to access historical contract databases and analyze previous awards related to the MMIII program, looking for similar services or components. This would help determine if the current award represents an increase, decrease, or stable level of spending for these critical functions over time.

What specific technical capabilities does The Boeing Company possess that justify a sole-source award for this contract?

The justification for a sole-source award typically rests on unique technical capabilities, proprietary technology, or specialized expertise that only one contractor can provide. For The Boeing Company regarding the MMIII program's flight test telemetry and termination, this likely stems from their deep involvement in the program's development, existing intellectual property, established manufacturing processes, and specialized testing infrastructure. They may possess unique knowledge of the missile system's architecture, integration requirements, and specific testing protocols that are not replicated by other potential bidders. A formal justification document, often required for sole-source procurements, would detail these specific capabilities and why competition is not feasible or advantageous.

How does the firm fixed-price (FFP) contract type impact risk allocation between the government and The Boeing Company?

Under a Firm Fixed Price (FFP) contract, the contractor (The Boeing Company) bears the majority of the cost risk. This means Boeing is obligated to complete the work for the agreed-upon price, regardless of their actual costs. If their costs exceed the contract price, they absorb the loss. Conversely, if their costs are lower than anticipated, they retain the profit. This structure provides the government with cost certainty and predictability, making budgeting easier. However, it can also incentivize the contractor to cut corners if not properly monitored, or conversely, lead to higher initial pricing to account for potential cost overruns. The government's risk is primarily related to ensuring the contractor meets the quality and performance specifications within the fixed price.

What are the potential performance risks associated with this contract, given its sole-source nature and specialized requirements?

Performance risks for this sole-source contract include potential complacency from the contractor due to the lack of competitive pressure, which could lead to suboptimal performance or innovation. There's also a risk that the government may not be receiving the best value for its investment. Specialized requirements mean that if Boeing encounters unforeseen technical challenges or cost overruns, the government has limited leverage to seek alternative solutions without potentially disrupting the program. Furthermore, reliance on a single source can create vulnerabilities if the contractor faces financial instability, labor disputes, or supply chain disruptions. Robust government oversight and clear performance metrics are crucial to mitigate these risks.

Are there any comparable contracts for similar telemetry and termination services awarded competitively that could serve as a benchmark?

Without access to a comprehensive database of all federal contracts, particularly those with similar specialized requirements and sole-source justifications, it is difficult to provide direct competitive benchmarks. However, the absence of competition for this $41.4 million contract suggests that finding directly comparable competitively awarded contracts may be challenging. Typically, sole-source awards are made precisely because a direct competitive comparison is not feasible due to unique requirements. To establish a benchmark, one would need to identify contracts for similar services (flight test telemetry, missile termination systems) awarded to different entities, analyze their scope, duration, and pricing, and then attempt to adjust for differences in complexity, technology, and market conditions.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 465 N MARSHALL WAY, LAYTON, UT, 84041

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: $41,411,686

Exercised Options: $41,411,686

Current Obligation: $41,411,686

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA821422D0001

IDV Type: IDC

Timeline