DoD's $12.3B R&D contract with Boeing shows long-term investment in physical sciences

Contract Overview

Contract Amount: $12,306,181 ($12.3M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2005-09-15

End Date: 2013-07-31

Contract Duration: 2,876 days

Daily Burn Rate: $4.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 23

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Place of Performance

Location: TUKWILA, KING County, WASHINGTON, 98108

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $12.3 million to THE BOEING COMPANY for work described as: Key points: 1. Contract awarded through full and open competition, indicating a robust bidding process. 2. Long duration (2005-2013) suggests a sustained need for the research and development services. 3. Cost Plus Fixed Fee (CPFF) pricing structure may incentivize contractor efficiency. 4. Research and Development in Physical, Engineering, and Life Sciences (NAICS 541710) is a critical sector for national security. 5. The contract's value points to significant investment in advanced technological capabilities. 6. No small business set-aside indicates the primary contractor is likely a large entity.

Value Assessment

Rating: good

The contract's substantial value of over $12.3 billion over its nearly 8-year period suggests a significant investment. While specific benchmarks for R&D contracts of this nature are difficult to ascertain without more granular data on deliverables and market conditions, the CPFF structure, when managed effectively, can provide good value by aligning contractor incentives with project goals. The long duration and consistent funding imply that the services provided were deemed valuable and met performance expectations over time.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which implies that while the competition was broad, there might have been specific reasons for excluding certain sources initially. The presence of 23 bids suggests a highly competitive environment, which is generally favorable for price discovery and achieving competitive pricing. The extensive number of bidders indicates strong market interest and a healthy level of competition for this type of R&D work.

Taxpayer Impact: The robust competition for this contract likely resulted in more favorable pricing for taxpayers compared to a sole-source or limited competition scenario. A wider pool of bidders generally drives down costs and encourages innovation.

Public Impact

The Department of Defense benefits from advanced research and development, enhancing national security capabilities. The contract supports innovation in physical, engineering, and life sciences, potentially leading to technological advancements. The geographic impact is primarily within the United States, supporting domestic R&D infrastructure. Workforce implications include employment for scientists, engineers, and support staff involved in complex research projects.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to scope creep if not managed tightly.
CPFF contracts can sometimes lead to cost overruns if not closely monitored for efficiency.
Reliance on a single large contractor (Boeing) for such a significant R&D effort carries inherent risks.

Positive Signals

Awarded through full and open competition, suggesting a fair and competitive process.
High number of bids (23) indicates strong market interest and potential for innovation.
Long-term commitment signals consistent need and potential for significant technological advancement.

Sector Analysis

This contract falls within the Research and Development sector, specifically NAICS code 541710, which covers R&D in the physical, engineering, and life sciences. This is a critical area for defense modernization and technological superiority. The aerospace and defense industry, where The Boeing Company is a major player, heavily relies on such R&D contracts to maintain its competitive edge and develop next-generation technologies. Comparable spending benchmarks are difficult without specific project details, but R&D investments of this magnitude are typical for major defense contractors pursuing advanced capabilities.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting plans for small businesses. This suggests that the primary focus was on securing the capabilities of a large, established prime contractor. The absence of small business participation in the prime contract may limit opportunities for smaller innovative firms to contribute directly to this specific large-scale R&D effort, though they might be involved in the broader defense supply chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Defense's contract management agencies, such as the Defense Contract Management Agency (DCMA). Given the CPFF structure and long duration, rigorous oversight of costs, performance, and adherence to research objectives would be crucial. Transparency is often limited in classified or sensitive R&D projects, but standard contract reporting and audits would apply. Inspector General jurisdiction would cover potential fraud, waste, and abuse.

Related Government Programs

Department of Defense Research and Development Programs
Aerospace Technology Development
Advanced Engineering Services
Physical Sciences Research Contracts
Life Sciences Research Contracts

Risk Flags

Long contract duration
Cost Plus Fixed Fee pricing
Potential for limited competition if exclusions were significant
Single large prime contractor dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.3 million to THE BOEING COMPANY. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is THE BOEING COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $12.3 million.

What is the period of performance?

Start: 2005-09-15. End: 2013-07-31.

What specific technological advancements or research outcomes resulted from this $12.3 billion contract?

Detailed outcomes of specific R&D contracts, especially those within the defense sector, are often classified or proprietary due to national security implications and competitive sensitivities. While the contract's substantial value and long duration (2005-2013) indicate a significant investment in advancing physical, engineering, and life sciences, the precise technological breakthroughs or research findings are not publicly disclosed in the provided data. Such contracts typically aim to develop new materials, enhance system performance, improve operational effectiveness, or explore novel scientific principles relevant to defense applications. The success would be measured against specific research objectives and milestones outlined in the contract, which are not available here.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types for similar R&D efforts?

The Cost Plus Fixed Fee (CPFF) contract type is common for research and development where the scope of work is not precisely defined at the outset, making it difficult to establish a firm fixed price. In CPFF, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This structure incentivizes the contractor to control costs, as the fee remains constant regardless of the final cost. Compared to Cost Plus Incentive Fee (CPIF), CPFF offers less flexibility for performance-based incentives but provides greater cost certainty for the government regarding the contractor's profit. It differs from Firm Fixed Price (FFP) contracts, which are suitable for well-defined scopes but risky for R&D due to potential cost overruns. For R&D, CPFF balances the need for flexibility with contractor cost consciousness.

What was the historical spending trend for R&D in physical, engineering, and life sciences within the Department of Defense during the contract period (2005-2013)?

The Department of Defense consistently allocates significant portions of its budget to Research, Development, Test, and Evaluation (RDT&E). During the 2005-2013 period, DoD R&D spending fluctuated due to factors like ongoing conflicts (Iraq and Afghanistan), evolving threat landscapes, and shifting technological priorities. While specific figures for NAICS 541710 are not directly available, overall DoD RDT&E budgets ranged roughly from $70 billion to over $80 billion annually during this timeframe. This contract, representing $12.3 billion over its life, constituted a notable investment within the broader R&D portfolio, likely focusing on strategic, long-term technological advancements rather than immediate operational needs, reflecting a sustained commitment to innovation in these critical scientific domains.

What are the potential risks associated with a single large contractor like Boeing holding such a substantial R&D contract for an extended period?

A significant risk associated with a single large contractor holding a substantial R&D contract for an extended period is the potential for complacency or reduced innovation due to a lack of competitive pressure over time. If the contract's scope is not actively managed and re-competed or adjusted, the contractor might become less incentivized to push boundaries. Furthermore, over-reliance on one entity can create vulnerabilities if the contractor faces financial difficulties, internal issues, or shifts in strategic focus. Dependency can also stifle the growth of smaller, more agile competitors who might offer novel solutions. Effective oversight, clear performance metrics, and periodic reviews are crucial to mitigate these risks and ensure continued value and innovation.

How did the 'Full and Open Competition After Exclusion of Sources' process impact the final contract award and pricing?

The 'Full and Open Competition After Exclusion of Sources' designation suggests that the initial solicitation was broadly advertised, but certain potential bidders were excluded based on specific criteria, possibly related to security clearances, existing technology access, or specialized capabilities required for the R&D. While this process aims for broad competition, the exclusion of sources could potentially limit the number of viable bidders compared to a purely 'full and open' competition. However, with 23 bids received, the competition remained robust. The exclusion might have ensured that only highly qualified entities participated, potentially leading to a higher quality of proposals and a more focused evaluation, which could indirectly influence pricing by ensuring that bids are technically sound and aligned with complex R&D requirements, rather than solely price-driven.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 23

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 7755 E MARGINAL WAY, SEATTLE, WA, 98124

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline