Boeing awarded $32.9M for Small Diameter Bomb sustainment, a sole-source contract

Contract Overview

Contract Amount: $32,878,731 ($32.9M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2014-08-28

End Date: 2021-07-31

Contract Duration: 2,529 days

Daily Burn Rate: $13.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SMALL DIAMETER BOMB I SUSTAINING ENGINEERING CY14/CY15

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $32.9 million to THE BOEING COMPANY for work described as: SMALL DIAMETER BOMB I SUSTAINING ENGINEERING CY14/CY15 Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Long contract duration of 2529 days suggests potential for cost overruns. 3. Firm Fixed Price contract type offers some cost certainty. 4. Contractor is a major defense industrial base participant. 5. Sustainment engineering is critical for maintaining weapon system readiness. 6. Contract value is moderate within the context of major defense procurements.

Value Assessment

Rating: fair

The contract value of $32.9 million for sustainment engineering over approximately seven years appears moderate. However, without comparable sole-source sustainment contracts for similar munitions, a precise value-for-money assessment is difficult. The firm fixed-price structure provides some cost control, but the lack of competition inherently reduces the government's leverage in price negotiation. Benchmarking against industry standards for sustainment engineering services would be beneficial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary technical expertise, proprietary data, or existing infrastructure to perform the required services. The lack of competition means the government did not benefit from a competitive bidding process, which could have led to lower prices.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. The government's ability to secure the best possible price was constrained.

Public Impact

The U.S. Air Force benefits from the continued sustainment of the Small Diameter Bomb, ensuring its operational readiness. This contract supports the maintenance and enhancement of a key precision-guided munition. The geographic impact is primarily within the United States, supporting defense industrial capabilities. Workforce implications include specialized engineering and technical roles at the contractor's facility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs.
Long contract duration increases exposure to potential cost growth over time.
Lack of competition may reduce incentives for contractor innovation and efficiency.

Positive Signals

Firm Fixed Price contract type provides cost certainty for the government.
Contractor is a well-established defense prime with expertise in munitions.
Sustainment engineering is crucial for maintaining the effectiveness of fielded weapon systems.

Sector Analysis

The defense sector, particularly munitions manufacturing and sustainment, is characterized by high barriers to entry, specialized technology, and significant government investment. The Small Diameter Bomb (SDB) is a critical component of modern air-to-ground warfare. Sustainment contracts are essential for ensuring the long-term viability and effectiveness of these complex weapon systems. Spending in this area is driven by operational requirements and the need to maintain a technological edge.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the sole-source nature and the prime contractor being The Boeing Company, it is unlikely that significant subcontracting opportunities for small businesses were mandated or actively pursued through a competitive set-aside process. Further review of subcontracting plans would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management structures. The Air Force's contracting officers are responsible for administering the contract and ensuring compliance with its terms. Inspector General reports and audits may be conducted to assess performance and financial accountability, particularly given the sole-source nature and long duration.

Related Government Programs

Air-to-Ground Munitions
Precision Guided Munitions
Weapon System Sustainment
Aerospace Engineering Services

Risk Flags

Sole-source award
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.9 million to THE BOEING COMPANY. SMALL DIAMETER BOMB I SUSTAINING ENGINEERING CY14/CY15

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 $32.9 million.

What is the period of performance?

Start: 2014-08-28. End: 2021-07-31.

What is the historical spending trend for Small Diameter Bomb sustainment engineering by the Department of Defense?

Historical spending data for the Small Diameter Bomb (SDB) sustainment engineering specifically is not readily available in the public domain for detailed trend analysis. However, the award of this $32.9 million contract for CY14/CY15 indicates a significant, albeit singular, investment in maintaining the weapon system's readiness during that period. Broader trends in munitions sustainment show consistent government investment to ensure the operational effectiveness of aging and new weapon platforms. Factors influencing these trends include evolving threat landscapes, technological advancements, and budget allocations within the Department of Defense. Without more granular historical data for this specific SDB sustainment effort, it's challenging to establish a precise multi-year spending trajectory.

How does the per-unit cost of the Small Diameter Bomb compare to similar munitions, and how does this sustainment contract impact that?

The provided data does not include per-unit cost information for the Small Diameter Bomb itself, nor does it break down the sustainment contract value into per-unit costs. Therefore, a direct comparison of per-unit costs to similar munitions is not possible with this information. Sustainment engineering contracts, like this one awarded to Boeing, focus on maintaining the operational readiness, reliability, and safety of existing weapon systems. While the cost of sustainment is a factor in the overall lifecycle cost of a munition, it is distinct from the initial procurement cost per unit. The $32.9 million contract aims to ensure the SDB remains effective, rather than directly influencing its initial per-unit manufacturing cost.

What are the key performance indicators (KPIs) used to measure the success of this sustainment engineering contract?

Specific Key Performance Indicators (KPIs) for this particular Small Diameter Bomb sustainment engineering contract are not detailed in the provided data. However, typical KPIs for such defense sustainment contracts often include metrics related to system availability, reliability, maintainability, and response times for engineering support. For example, the government might track the Mean Time Between Failures (MTBF) for critical components, the percentage of engineering support requests resolved within a specified timeframe, or the successful implementation of engineering change proposals. Ensuring the weapon system meets its operational readiness rates and that engineering issues are addressed promptly and effectively are paramount.

What is the track record of The Boeing Company in delivering sustainment engineering services for complex defense systems?

The Boeing Company has a long and extensive track record in delivering sustainment engineering services for a wide array of complex defense systems, including aircraft, missiles, and munitions. As a major defense contractor, Boeing is responsible for the lifecycle support of numerous platforms, encompassing logistics, maintenance, upgrades, and engineering services. Their experience with programs like the F-15, F/A-18, and various missile systems demonstrates a deep capability in ensuring the operational readiness and longevity of sophisticated military hardware. This includes managing complex supply chains, providing technical expertise, and implementing engineering solutions to address obsolescence and performance degradation, making them a capable provider for the SDB sustainment.

Given the sole-source nature, what mechanisms are in place to ensure fair pricing and prevent contractor overcharging?

While the sole-source nature of this contract inherently limits competitive pressure, several mechanisms are typically in place to ensure fair pricing and prevent contractor overcharging. The government's contracting officers are tasked with negotiating fair and reasonable prices, often relying on Cost and Price Analysis techniques. This can involve reviewing the contractor's cost proposals, comparing them to historical data, using should-cost estimates, and potentially employing techniques like should-cost management. Furthermore, contract clauses may require the contractor to provide detailed cost breakdowns. Audits by agencies like the Defense Contract Audit Agency (DCAA) can scrutinize the contractor's cost accounting practices and proposed costs. Finally, the contract type (Firm Fixed Price) itself imposes some cost discipline on the contractor.

What is the potential impact of this contract on the future development or sustainment of other similar munitions?

This contract for Small Diameter Bomb (SDB) sustainment engineering primarily focuses on maintaining the current operational capability of an existing munition. Its direct impact on the future development of *other* similar munitions is likely limited, as development decisions are typically driven by broader strategic requirements, technological advancements, and new program initiatives. However, the sustainment activities performed under this contract could indirectly inform future designs by identifying areas for improvement in reliability, maintainability, or cost-effectiveness that could be incorporated into next-generation munitions. Furthermore, the established relationship and engineering knowledge gained with Boeing could influence future sustainment strategies for other Boeing-produced munitions or systems.

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

Offers Received: 1

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: $40,071,045

Exercised Options: $32,878,731

Current Obligation: $32,878,731

Actual Outlays: $725,603

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline