Boeing awarded $32.6M for Laser Small Diameter Bombs, a sole-source contract for critical munitions
Contract Overview
Contract Amount: $32,578,581 ($32.6M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2022-11-10
End Date: 2022-11-10
Competition Type: NOT COMPETED
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: LASER SMALL DIAMETER BOMB
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $32.6 million to THE BOEING COMPANY for work described as: LASER SMALL DIAMETER BOMB Key points: 1. Contract awarded to a single, established defense contractor, indicating specialized capabilities. 2. Focus on advanced munitions highlights investment in modernizing Air Force's arsenal. 3. Fixed-price incentive contract structure aims to balance cost control with performance. 4. Delivery order signifies immediate need for these specific munitions. 5. Contracting action falls under ammunition manufacturing, a key defense industrial base sector.
Value Assessment
Rating: fair
This contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) contract, making direct value-for-money assessment challenging without the base contract details. The fixed-price incentive (FPI) structure suggests an attempt to incentivize performance while managing costs, but the lack of competition raises concerns about optimal pricing. Benchmarking against similar advanced munition contracts would be necessary for a more definitive value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one bidder was solicited. This approach is typically used when a unique capability or proprietary technology is required, or in situations where only one responsible source exists. The lack of competition means there was no opportunity for price discovery through a bidding process, potentially leading to higher costs for the government.
Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to secure the best possible pricing, potentially resulting in less favorable terms for taxpayers.
Public Impact
The U.S. Air Force is the primary beneficiary, receiving advanced munitions for its combat aircraft. This contract supports the delivery of critical 'Laser Small Diameter Bombs,' enhancing precision strike capabilities. The geographic impact is national, supporting defense readiness, with potential deployment to operational theaters. Workforce implications are primarily within the defense manufacturing sector, supporting specialized engineering and production roles at the contractor's facility.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition, potentially increasing costs for taxpayers.
- Lack of transparency in the sole-source justification requires careful review.
- Dependence on a single contractor for critical munitions could pose supply chain risks.
Positive Signals
- Awarding to a prime defense contractor ensures access to specialized manufacturing capabilities.
- Fixed-price incentive contract aims to align contractor performance with government objectives.
- Procurement of advanced munitions directly supports modernization of Air Force's combat capabilities.
Sector Analysis
This contract falls within the defense sector, specifically focusing on the manufacturing of advanced munitions. The market for precision-guided munitions is highly specialized, dominated by a few large defense contractors with the necessary research, development, and production capabilities. Spending in this area is driven by the need for technologically superior weaponry to maintain military advantage. Comparable spending benchmarks would typically involve other contracts for similar guided bomb units or advanced missile systems.
Small Business Impact
This contract does not appear to involve a small business set-aside. As a sole-source award to a large prime contractor, there are no direct subcontracting opportunities mandated for small businesses within this specific award notice. The prime contractor's overall subcontracting plan, if applicable, would govern small business participation on a broader scale.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. The Air Force is responsible for ensuring contract performance and compliance. Transparency is limited due to the sole-source nature of the award. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Guided Bomb Units (GBUs)
- Precision Strike Munitions
- Air-to-Ground Weapons Systems
- Department of Defense Ammunition Procurement
Risk Flags
- Sole-source award may limit cost savings.
- Lack of competition could impact price discovery.
- Dependence on a single supplier for critical munitions.
Tags
defense, department-of-defense, department-of-the-air-force, ammunition, munitions-manufacturing, sole-source, fixed-price-incentive, delivery-order, the-boeing-company, missouri, advanced-munitions
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $32.6 million to THE BOEING COMPANY. LASER SMALL DIAMETER BOMB
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 $32.6 million.
What is the period of performance?
Start: 2022-11-10. End: 2022-11-10.
What is the specific justification for awarding this contract on a sole-source basis?
The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are awarded when only one responsible source can provide the required supplies or services, often due to proprietary technology, unique capabilities, or urgent and compelling needs where competition is not feasible. For this contract, the justification would likely relate to Boeing's unique manufacturing capabilities or intellectual property associated with the Laser Small Diameter Bomb system. A detailed review of the contract file and associated documentation would be required to ascertain the precise rationale.
How does the fixed-price incentive (FPI) structure work for this contract, and what are the potential risks and benefits?
A Fixed-Price Incentive (FPI) contract establishes a target cost, target profit, and a price ceiling. The final price is adjusted based on the contractor's actual cost performance relative to the target cost. If the contractor's costs are lower than the target, both the contractor and the government share in the savings (cost underrun). If costs exceed the target, the contractor's profit is reduced, and the final price increases, up to the ceiling. The benefit is incentivizing the contractor to control costs while achieving performance objectives. The risk lies in the potential for cost overruns that reach the price ceiling, leading to a higher final cost for the government than initially anticipated, especially if the ceiling is set too high or if unforeseen issues arise.
What is the historical spending trend for Laser Small Diameter Bombs or similar munitions by the Department of Defense?
The provided data only includes a single delivery order for $32.6 million. To assess historical spending trends for Laser Small Diameter Bombs or similar munitions, a broader analysis of Department of Defense (DoD) contract databases would be necessary. This would involve querying for contracts awarded to Boeing and potentially other manufacturers for related munition types over several fiscal years. Factors influencing spending trends include evolving military requirements, technological advancements, geopolitical events, and budget allocations. Without access to this broader historical data, it is impossible to determine specific trends for this munition category.
What are the performance metrics or key performance indicators (KPIs) associated with this contract?
The provided data does not specify the performance metrics or Key Performance Indicators (KPIs) for this contract. In a Fixed-Price Incentive (FPI) contract, performance is typically tied to delivery schedules, quality standards, and potentially specific technical or operational capabilities of the munitions. The incentive aspect of the contract suggests that achieving certain performance targets could influence the final profit margin for the contractor. Detailed information on these KPIs would be found in the contract's statement of work (SOW) or performance work statement (PWS) and associated contract clauses.
What is the contractor's (The Boeing Company) track record with similar munition contracts?
The Boeing Company has a long and extensive track record as a major defense contractor, involved in the development and production of a wide array of aerospace and defense systems, including various types of munitions. They are known for producing advanced weapons systems for the U.S. military and international allies. While specific details on their performance for 'Laser Small Diameter Bombs' are not in the provided data, Boeing's general reputation in the defense industry suggests significant experience in complex manufacturing and program execution. A thorough review would involve examining past performance evaluations and contract histories for similar munition programs.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Address: 6200 JAMES S 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: $32,578,581
Exercised Options: $32,578,581
Current Obligation: $32,578,581
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA867220D0001
IDV Type: IDC
Timeline
Start Date: 2022-11-10
Current End Date: 2022-11-10
Potential End Date: 2024-09-23 00:00:00
Last Modified: 2025-04-26
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