DoD awards $58.5M contract for ammunition manufacturing to The Boeing Company, with a significant portion allocated to Missouri
Contract Overview
Contract Amount: $58,495,941 ($58.5M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2018-06-14
End Date: 2021-09-09
Contract Duration: 1,183 days
Daily Burn Rate: $49.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: M CODE PHASE II
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $58.5 million to THE BOEING COMPANY for work described as: M CODE PHASE II Key points: 1. Contract awarded for ammunition manufacturing, indicating a need for specialized production capabilities. 2. The Boeing Company, a major aerospace and defense contractor, secured this award. 3. The contract spans over three years, suggesting a sustained demand for these services. 4. The award type is a Delivery Order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 5. The contract utilizes a Cost Plus Incentive Fee (CPIF) structure, which can incentivize performance but also carries cost overrun risks. 6. The contract is not set aside for small businesses, suggesting the scope and nature of the work require large-scale capabilities.
Value Assessment
Rating: fair
Benchmarking the value of this $58.5 million contract is challenging without knowing the specific type and quantity of ammunition produced. However, the CPIF pricing structure suggests that the government aims to control costs while incentivizing contractor performance. The contract's duration of over three years indicates a substantial, long-term requirement. Further analysis would require comparing the unit costs of the specific ammunition types to industry benchmarks and other government contracts for similar items.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. This competitive process is generally expected to yield fair pricing and good value for the government. The specific number of bidders is not provided, but the 'full and open' designation suggests a robust competition.
Taxpayer Impact: Full and open competition typically benefits taxpayers by driving down prices through market forces and encouraging a wider range of suppliers to participate.
Public Impact
The Department of Defense benefits from a reliable supply of manufactured ammunition. The contract supports the production of essential munitions for military operations. The primary geographic impact is in Missouri, where the work is being performed. The contract likely supports jobs within The Boeing Company and its supply chain, particularly in Missouri.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Incentive Fee (CPIF) contracts can lead to cost overruns if not closely managed, as the contractor is reimbursed for costs plus a fee that can increase with performance.
- The lack of specific details on the ammunition type makes it difficult to assess the true value for money.
- The duration of the contract (over three years) requires ongoing monitoring to ensure continued performance and cost control.
Positive Signals
- Awarded under full and open competition, suggesting a competitive bidding process that should lead to better pricing.
- The Boeing Company is a well-established defense contractor with significant experience in manufacturing.
- The contract is for a critical defense need, ensuring readiness and operational capability.
Sector Analysis
This contract falls within the Defense Industrial Base sector, specifically focusing on the manufacturing of ordnance and ammunition. The market for defense manufacturing is characterized by high barriers to entry, specialized technology, and significant government procurement. The Boeing Company is a major player in this sector, and this contract represents a portion of the substantial annual government spending on defense articles and services.
Small Business Impact
This contract was not set aside for small businesses, which is typical for large-scale defense manufacturing contracts requiring specialized facilities and extensive experience. There is no explicit information provided regarding subcontracting plans for small businesses. The absence of a small business set-aside suggests that the prime contractor, The Boeing Company, will likely handle the majority of the work internally or with other large-scale suppliers.
Oversight & Accountability
Oversight for this contract would typically be managed by the Department of Defense's contracting and program management offices. The Cost Plus Incentive Fee (CPIF) structure necessitates close financial oversight to ensure costs are reasonable and that performance incentives are met. Transparency is generally maintained through contract reporting requirements, though specific public access to detailed performance data may be limited due to national security considerations. Inspector General (IG) offices within the DoD would have jurisdiction to investigate any potential fraud, waste, or abuse.
Related Government Programs
- Department of Defense Ammunition Procurement
- Ordnance Manufacturing Contracts
- Cost Plus Incentive Fee Contracts
- Defense Industrial Base Contracts
Risk Flags
- CPIF Contract Type
- Long Contract Duration
- Specific Ammunition Type Not Detailed
Tags
defense, department-of-defense, air-force, ammunition-manufacturing, cost-plus-incentive-fee, delivery-order, full-and-open-competition, the-boeing-company, missouri, large-contract, ordnance
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $58.5 million to THE BOEING COMPANY. M CODE PHASE II
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 $58.5 million.
What is the period of performance?
Start: 2018-06-14. End: 2021-09-09.
What is the specific type and quantity of ammunition being manufactured under this contract?
The provided data does not specify the exact type or quantity of ammunition. The North American Industry Classification System (NAICS) code '332993' covers 'Ammunition (except Small Arms) Manufacturing,' which is a broad category. Without further details, it's impossible to determine the specific munitions, their caliber, or the total number of units to be produced. This information is crucial for a detailed cost-benefit analysis and for comparing the contract's value against industry standards for specific ammunition types.
How does the unit cost of this ammunition compare to similar contracts or market rates?
A direct comparison of unit costs is not possible without knowing the specific ammunition type and quantity. The contract value is $58,495,940.54. If we were to assume a hypothetical quantity, say 1 million rounds, the average cost per round would be approximately $58.50. However, this is purely speculative. To perform a valid benchmark, one would need to identify comparable contracts for the same or similar ammunition types awarded around the same period, considering factors like quantity, specifications, and contract type (e.g., fixed-price vs. cost-reimbursement).
What is The Boeing Company's track record with similar ammunition manufacturing contracts?
The Boeing Company is a major aerospace and defense contractor with extensive experience in manufacturing complex systems. While primarily known for aircraft and space systems, their capabilities often extend to integrated defense solutions. Information on their specific track record in large-scale ammunition manufacturing, beyond this contract, would require a deeper dive into their contract history with the DoD and other defense agencies. Their established position in the defense sector suggests they possess the necessary infrastructure and expertise, but specific performance metrics on past ammunition-related contracts are not detailed here.
What are the key performance indicators (KPIs) and incentive structures within the Cost Plus Incentive Fee (CPIF) arrangement?
The CPIF contract structure implies that The Boeing Company will be reimbursed for its allowable costs plus a predetermined fee. This fee is adjusted based on whether the final cost is below or above a target cost, incentivizing the contractor to control expenses. Specific KPIs and the exact formula for fee adjustment are not provided in the summary data. Typically, KPIs might include delivery schedules, quality standards, and production efficiency. The government and contractor negotiate these targets and the sharing mechanism for cost savings or overruns.
What is the historical spending trend for this specific type of ammunition or for The Boeing Company's ammunition production?
The provided data pertains to a single contract award. To understand historical spending trends, one would need to analyze aggregated spending data for 'Ammunition (except Small Arms) Manufacturing' (NAICS 332993) over several fiscal years, potentially filtering by agency (DoD) and contractor (The Boeing Company). This would reveal whether this $58.5 million award is consistent with, higher than, or lower than previous spending levels for similar requirements or from this specific contractor.
What are the potential risks associated with this contract, beyond cost overruns?
Beyond cost overruns inherent in CPIF contracts, potential risks include supply chain disruptions affecting raw materials or components, manufacturing defects leading to quality issues, delays in production impacting delivery schedules, and geopolitical factors influencing demand or material availability. Furthermore, reliance on a single large contractor for critical munitions could pose a strategic risk if their production capacity is compromised. The long duration also increases exposure to evolving technological requirements or changes in military strategy.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Address: 6200 JS MCDONNELL BLVD, SAINT LOUIS, MO, 63134
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: $62,698,424
Exercised Options: $62,698,424
Current Obligation: $58,495,941
Subaward Activity
Number of Subawards: 21
Total Subaward Amount: $25,471,600
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA865615D0262
IDV Type: IDC
Timeline
Start Date: 2018-06-14
Current End Date: 2021-09-09
Potential End Date: 2021-09-09 00:00:00
Last Modified: 2025-12-22
More Contracts from THE Boeing Company
- KC-X Modernization Program — $32.0B (Department of Defense)
- International Space Station — $22.4B (National Aeronautics and Space Administration)
- 200112!000108!9700!ZD60 !ballistic Missile Defense ORG. !HQ000601C0001 !A!N!*!N! !20001222!20080930!848025649!848025649!009256819!n!the Boeing Company !3370 E Miraloma AVE !anaheim !ca!92806!37000!089!01!huntsville !madison !alabama !+000383571022!n!n!000000000000!ad93!rdte/Other Defense-Adv Tech DEV !S1 !services !1caa!ballistic Missile Defense SYS !541710!*!*!3! ! ! !*!*!*!B!*!*!A! !A !U!R!2!001!B! !Z!Y!Z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! — $18.8B (Department of Defense)
- USN P-8A FRP II Long Lead Material — $18.1B (Department of Defense)
- 200512!010860!2100!w56hzv!tacom - Warren !w56hzv05c0724 !A!N! !Y! ! !20050923!20141231!016544780!016544780!009256819!n!the Boeing Company !J S Mcdonnell Blvd !saint Louis !mo!63166!65000!510!29!st. Louis !ST. Louis (city) !missouri !+000219245691!n!n!000000000000!az15!rdte/Other Research&development-Eng/Manuf Devel !S1 !services !301 !FCS !541330!E! !1! ! ! ! ! !20200930!B! ! !A! !d!u!u!1!001!n!1a!z!y!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! ! TAS::21 2040::TAS — $12.7B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)