DoD awards $291M for Ammunition Manufacturing to Boeing, raising concerns about competition and value
Contract Overview
Contract Amount: $291,282,123 ($291.3M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2017-11-01
End Date: 2020-10-30
Contract Duration: 1,094 days
Daily Burn Rate: $266.3K/day
Competition Type: NOT COMPETED
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: SDB I LOT 13
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $291.3 million to THE BOEING COMPANY for work described as: SDB I LOT 13 Key points: 1. Significant contract value awarded to a single large contractor. 2. Lack of competition raises questions about price discovery and potential overpayment. 3. Ammunition manufacturing is a critical defense sector with potential for cost overruns. 4. The fixed-price incentive contract type may not fully mitigate risk for the government.
Value Assessment
Rating: questionable
The contract value of $291M for ammunition manufacturing is substantial. Without competitive bidding, it's difficult to assess if this price is reasonable compared to market rates or similar government contracts for ammunition.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and may lead to higher costs for taxpayers as there was no market pressure to achieve the best possible price.
Taxpayer Impact: The lack of competition on a contract of this magnitude likely results in a higher cost to taxpayers than a competitively awarded contract would have.
Public Impact
Taxpayers may be paying a premium for ammunition due to the absence of competitive bidding. Reliance on a single supplier for critical ammunition could pose supply chain risks. The Department of Defense's procurement process for this contract warrants further scrutiny.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of price competition
- High contract value
- Potential for cost overruns
Positive Signals
- Contract awarded to a major defense contractor
- Contract addresses critical defense need
Sector Analysis
This contract falls within the Ammunition (except Small Arms) Manufacturing sector, a critical component of defense readiness. Spending in this sector can fluctuate based on geopolitical events and military demand, but competitive procurement is key to cost efficiency.
Small Business Impact
The contract was awarded to The Boeing Company, a large aerospace and defense firm. There is no indication that small businesses were involved in this specific award, suggesting a missed opportunity for small business participation.
Oversight & Accountability
The sole-source nature of this award raises questions about the oversight applied during the procurement process. Further review is needed to ensure the government received fair value and that the decision not to compete was fully justified.
Related Government Programs
- Ammunition (except Small Arms) Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award
- Lack of competitive bidding
- Potential for inflated pricing
- Supply chain dependency on a single vendor
- Limited transparency in price determination
Tags
ammunition-except-small-arms-manufacturi, department-of-defense, mo, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $291.3 million to THE BOEING COMPANY. SDB I LOT 13
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 $291.3 million.
What is the period of performance?
Start: 2017-11-01. End: 2020-10-30.
What was the justification for not competing this significant ammunition contract, and how was the price determined to be fair and reasonable without market comparison?
The justification for not competing this contract is not provided in the data. Typically, sole-source awards require a detailed justification, such as unique capabilities or urgent need. Without this, it's impossible to assess the price determination process. A thorough review of the contract file would be necessary to understand the rationale and the methods used to establish a fair and reasonable price, such as cost analysis or comparison to previous contracts.
What are the potential risks to national security if Boeing faces production issues or supply chain disruptions for this critical ammunition, given the sole-source nature of the contract?
A sole-source contract for critical ammunition creates significant supply chain risk. If Boeing experiences production issues, labor strikes, or supply chain disruptions, the Department of Defense has limited alternative sources to turn to, potentially impacting military readiness. This reliance increases the government's vulnerability to delays and shortages, necessitating robust monitoring and contingency planning by the agency.
How does the fixed-price incentive contract structure mitigate risk for the government in a sole-source scenario for ammunition manufacturing?
A Fixed Price Incentive (FPI) contract aims to share cost risks and provide incentives for performance. In a sole-source scenario, it theoretically incentivizes the contractor to control costs to achieve a better profit margin. However, the effectiveness is limited without a competitive baseline. The government's ability to negotiate targets and share ratios is crucial, but the lack of competition means the initial targets might not be as aggressive as they would be in a competitive environment.
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 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: $291,282,123
Exercised Options: $291,282,123
Current Obligation: $291,282,123
Actual Outlays: $404,314
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA867216D0010
IDV Type: IDC
Timeline
Start Date: 2017-11-01
Current End Date: 2020-10-30
Potential End Date: 2025-04-30 00:00:00
Last Modified: 2025-07-09
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