Boeing awarded $31.4M for LASER SMALL DIAMETER BOMB AURS, a sole-source contract for guided missile manufacturing

Contract Overview

Contract Amount: $31,429,322 ($31.4M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2019-11-06

End Date: 2022-09-23

Contract Duration: 1,052 days

Daily Burn Rate: $29.9K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LASER SMALL DIAMETER BOMB AURS

Place of Performance

Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $31.4 million to THE BOEING COMPANY for work described as: LASER SMALL DIAMETER BOMB AURS Key points: 1. Contract awarded to a single, established provider, raising questions about price competitiveness. 2. The fixed-price structure aims to control costs, but the lack of competition limits potential savings. 3. Performance period spans nearly three years, indicating a significant, ongoing need for the specified munitions. 4. This contract falls within the defense sector, specifically focusing on advanced missile systems. 5. The award is a delivery order under a larger contract vehicle, suggesting a streamlined procurement process. 6. No small business set-aside was applied, indicating the primary contractor is not a small business.

Value Assessment

Rating: fair

The contract value of $31.4 million for LASER SMALL DIAMETER BOMB AURS appears to be within a reasonable range for specialized defense systems, however, without competitive bidding, it is difficult to benchmark against market alternatives. The firm fixed-price nature suggests cost certainty for the government, but the absence of competition means potential savings from a more robust bidding process are foregone. The contract's duration of over 1000 days also implies a substantial commitment.

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 approach is typically used when a specific capability is required that only one entity possesses, or in situations where urgency or a lack of viable alternatives necessitates it. The absence of multiple bidders means there was no direct price comparison or negotiation driven by market competition, potentially leading to a higher price than if multiple firms had competed.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to secure the best possible pricing for taxpayers. The lack of competitive pressure means taxpayers may be paying a premium for this specific defense system.

Public Impact

The primary beneficiaries are the U.S. Air Force, receiving advanced munitions critical for air operations. The contract delivers specialized guided missile systems, enhancing the military's precision strike capabilities. Geographic impact is primarily national, supporting defense readiness across various operational theaters. Workforce implications include specialized manufacturing and engineering roles within The Boeing Company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to suboptimal pricing.
Sole-source awards can reduce transparency in cost justification.
Reliance on a single supplier can create supply chain risks.

Positive Signals

Firm fixed-price contract provides cost certainty.
Award to a major defense contractor suggests established capability.
Delivery order under an existing contract vehicle may indicate efficiency.

Sector Analysis

This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a critical component of the broader aerospace and defense industry. This sector is characterized by high technological barriers to entry, significant R&D investment, and long product development cycles. Spending in this area is heavily influenced by government defense budgets and strategic priorities. Comparable spending benchmarks are difficult to establish without detailed cost breakdowns and competitive data, but large-scale missile system development and production typically involve substantial financial commitments.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have significant subcontracting requirements for small businesses based on the provided data. The award to The Boeing Company, a large prime contractor, suggests that the primary focus is on leveraging established large-scale manufacturing capabilities. This means the direct economic benefits to the small business ecosystem from this specific award are likely minimal, though Boeing may engage small businesses indirectly through its broader supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and auditing functions, including the Air Force's program management and potentially the Defense Contract Audit Agency (DCAA). Transparency is limited due to the sole-source nature, but contract modifications, performance reports, and payment milestones would be subject to internal review. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Air-to-Ground Munitions
Precision Guided Munitions
Missile Manufacturing
Defense Procurement
Aerospace Manufacturing

Risk Flags

Sole-source award limits competitive pricing.
Potential for contractor lock-in.
Lack of transparency in cost justification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.4 million to THE BOEING COMPANY. LASER SMALL DIAMETER BOMB AURS

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 $31.4 million.

What is the period of performance?

Start: 2019-11-06. End: 2022-09-23.

What is the historical spending trend for LASER SMALL DIAMETER BOMB AURS or similar systems by the Department of Defense?

Analyzing historical spending on LASER SMALL DIAMETER BOMB AURS or closely related systems is crucial for understanding the long-term investment in this capability. Without specific historical data for this exact program, we can infer trends from broader categories like 'Guided Missile and Space Vehicle Manufacturing' or 'Air-to-Ground Munitions'. The Department of Defense consistently allocates significant portions of its budget to advanced munitions, driven by evolving geopolitical landscapes and technological advancements. The $31.4 million awarded here represents a single delivery order, suggesting it is part of a larger, potentially multi-year program. Examining prior years' budgets for similar weapon systems, including their development, procurement, and sustainment costs, would reveal whether this award is an increase, decrease, or continuation of established spending patterns. Factors such as program maturity, production ramp-up or down, and the introduction of new technologies heavily influence these trends.

How does the pricing of this contract compare to other similar sole-source awards for advanced munitions?

Benchmarking the pricing of this $31.4 million sole-source award for LASER SMALL DIAMETER BOMB AURS against similar contracts is challenging due to the proprietary nature of defense pricing and the lack of direct competition. Sole-source awards inherently limit the ability to perform direct price comparisons. However, analysts can look at the cost per unit (if known) or the total contract value relative to the quantity and complexity of the delivered system. Comparisons would ideally be made with other contracts for advanced, laser-guided munitions or similar precision-guided systems awarded on a sole-source basis to large defense contractors. Factors such as technological sophistication, production volume, and the specific performance characteristics of the munition play a significant role in cost. Without access to detailed cost breakdowns or a competitive bidding process, any comparison remains an estimate, highlighting the inherent risk in sole-source procurements regarding optimal value for taxpayer money.

What are the key performance indicators (KPIs) and success metrics for this contract?

The key performance indicators (KPIs) and success metrics for the LASER SMALL DIAMETER BOMB AURS contract are not explicitly detailed in the provided data but are typically established within the contract's Statement of Work (SOW) and Performance Work Statement (PWS). For a defense procurement of this nature, common KPIs would likely include adherence to delivery schedules, meeting stringent quality and reliability standards (e.g., defect rates, operational readiness), and ensuring the munition performs to specified accuracy and range requirements. Success would be measured by the timely delivery of functional, high-quality munitions that meet all technical specifications and operational needs of the Air Force. Contractual clauses often include provisions for acceptance testing, post-delivery inspections, and potentially operational testing by end-users to validate performance. Failure to meet these KPIs could result in contract penalties, delays in payment, or even termination.

What is The Boeing Company's track record with similar defense contracts, particularly in missile systems?

The Boeing Company has an extensive and well-established track record in developing, manufacturing, and delivering a wide array of defense systems, including sophisticated missile and munitions programs. As one of the largest aerospace and defense contractors globally, Boeing has consistently secured and executed large-scale contracts with the U.S. Department of Defense and allied nations. Their portfolio includes various air-launched weapons, strategic missiles, and precision-guided munitions. While specific performance details for every contract are not publicly available, Boeing's long-standing presence and continued success in winning competitive bids and sole-source awards for complex defense systems suggest a strong capability in program management, engineering, manufacturing, and supply chain integration. Their history indicates a capacity to handle programs of this scale and technological complexity, though like any large contractor, they may have faced specific program challenges or reviews over their extensive operational history.

Are there any identified risks associated with this sole-source award, beyond potential pricing issues?

Beyond the potential for suboptimal pricing due to the lack of competition, several other risks are associated with this sole-source award. A primary concern is supply chain dependency; relying solely on The Boeing Company for this specific munition could create vulnerabilities if Boeing experiences production disruptions, financial instability, or strategic shifts. This dependency can also limit the government's leverage in future negotiations or modifications. Furthermore, sole-source awards can sometimes stifle innovation, as there is less market pressure for the contractor to continuously improve the product or manufacturing processes beyond contractual requirements. There's also a risk of 'contractor lock-in,' where the government becomes heavily reliant on the incumbent's unique knowledge and infrastructure, making it difficult and costly to switch providers or develop alternative solutions in the future. Ensuring robust oversight and clear performance metrics becomes even more critical in sole-source situations to mitigate these risks.

Industry Classification

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

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

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: $31,429,322

Exercised Options: $31,429,322

Current Obligation: $31,429,322

Subaward Activity

Number of Subawards: 25

Total Subaward Amount: $19,020,249

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA865618D0130

IDV Type: IDC

Timeline