DoD's $240M contract for ammunition manufacturing awarded to The Boeing Company, with limited competition

Contract Overview

Contract Amount: $24,032,525 ($24.0M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2006-08-31

End Date: 2007-04-30

Contract Duration: 242 days

Daily Burn Rate: $99.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $24.0 million to THE BOEING COMPANY for work described as: Key points: 1. The contract value of over $240 million represents a significant investment in defense supply chains. 2. Awarded as 'Not Competed', this suggests potential limitations in market availability or specific contractor capabilities. 3. The 'Cost Plus Fixed Fee' contract type indicates that costs are reimbursed plus a fixed fee, which can introduce cost overrun risks. 4. The contract duration of 242 days is relatively short for a large-value defense procurement. 5. The specific product service code is missing, hindering a precise comparison with similar procurements. 6. The absence of small business set-aside flags raises questions about opportunities for smaller defense contractors.

Value Assessment

Rating: questionable

Benchmarking the value of this $240 million contract is challenging due to the lack of a specific product service code and limited competition details. The 'Cost Plus Fixed Fee' (CPFF) contract type, while common in defense, can lead to higher final costs compared to fixed-price contracts if not managed rigorously. Without comparable contract data or a clear understanding of the specific ammunition type, assessing value for money is difficult. The high 'BR' (Bestiality Rating) of 99308 suggests this was a sole-source or highly restricted procurement, potentially impacting price competitiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'Not Competed' basis, indicating that the Department of Defense did not solicit bids from multiple sources. This typically occurs when only one source is capable of meeting the requirement, or in urgent situations. The lack of competition means that price discovery through market forces was bypassed, potentially leading to a higher price than if multiple vendors had competed.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without a competitive process, there is less assurance that the government secured the best possible price for this ammunition.

Public Impact

The primary beneficiaries are the Department of Defense and its operational readiness, ensuring supply of critical ammunition. The services delivered include the manufacturing of ammunition, essential for military operations. The geographic impact is primarily within the United States, supporting domestic defense manufacturing. Workforce implications include employment at The Boeing Company's facilities involved in this production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Cost Plus Fixed Fee contract type carries inherent risk of cost overruns.
Absence of specific product service code hinders detailed analysis and benchmarking.
Limited transparency due to 'Not Competed' award.

Positive Signals

Ensures supply of critical defense materiel.
Award to a major defense contractor like Boeing suggests capability to meet requirements.
Contract awarded by the Department of Defense, a primary customer for defense goods.

Sector Analysis

The defense industry is characterized by long-term contracts, high barriers to entry, and significant government oversight. Ammunition manufacturing is a critical sub-sector within defense, requiring specialized facilities and adherence to stringent quality and safety standards. Spending in this area is driven by military readiness requirements and geopolitical factors. Comparable spending benchmarks are difficult to establish without knowing the specific type of ammunition, but overall defense procurement runs into hundreds of billions annually.

Small Business Impact

The data indicates this contract was not competed and there is no indication of a small business set-aside (ss: false, sb: false). This suggests that small businesses were likely not directly involved as prime contractors on this award. Subcontracting opportunities for small businesses may exist, but are not explicitly detailed in the provided data. The lack of set-aside could limit the direct participation of the small business defense industrial base in this specific procurement.

Oversight & Accountability

Oversight for this contract would fall under the Department of Defense's contracting and financial management regulations. Accountability measures are typically embedded within the contract terms, including performance metrics and reporting requirements. Transparency is limited by the 'Not Competed' nature of the award. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Department of Defense Ammunition Procurement
Defense Industrial Base Manufacturing Contracts
Cost Plus Fixed Fee Contracts
Sole-Source Defense Contracts

Risk Flags

Lack of Competition
Cost Plus Fixed Fee Contract Type
Missing Product Service Code
Limited Transparency on Justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.0 million to THE BOEING COMPANY. See the official description on USAspending.

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 $24.0 million.

What is the period of performance?

Start: 2006-08-31. End: 2007-04-30.

What specific type of ammunition is being procured under this contract?

The provided data does not specify the exact type of ammunition being procured. The 'Product Service Code' (PSC) field is empty, which would typically offer a more granular classification. Ammunition encompasses a wide range of products, from small arms rounds to large caliber artillery shells and missiles. Without this detail, it is impossible to assess the specific market dynamics, pricing benchmarks, or the criticality of this particular munition to military operations. This lack of specificity is a significant gap in understanding the contract's full scope and value.

What is the historical spending pattern for this specific type of ammunition with The Boeing Company?

Historical spending data with The Boeing Company for this specific type of ammunition cannot be determined from the provided information. The absence of a Product Service Code (PSC) prevents tracing past procurements of the same or similar items. Furthermore, the contract award details only cover a single instance and do not provide a history of awards for this particular item. To analyze historical spending, one would need access to a broader database of federal contracts, filtered by contractor, agency, and a specific item classification, which is not available here.

What were the justifications for awarding this contract on a 'Not Competed' basis?

The justification for awarding this contract on a 'Not Competed' basis is not detailed in the provided data. Federal procurement regulations (like the Federal Acquisition Regulation - FAR) outline specific circumstances under which contracts can be awarded without full and open competition. These typically include situations where only one responsible source can satisfy the agency's needs, or in cases of urgent and compelling need. Without further documentation, such as a Justification and Approval (J&A) document, the specific reasons remain unknown. This lack of transparency raises questions about whether competition was genuinely impossible or if other factors influenced the decision.

How does the 'Cost Plus Fixed Fee' structure impact the potential final cost compared to other contract types?

The 'Cost Plus Fixed Fee' (CPFF) contract structure means the contractor (The Boeing Company) is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used when the scope of work is not precisely defined or involves significant uncertainty. While it allows flexibility, it shifts much of the cost risk to the government. If costs escalate beyond initial estimates, the government pays more. Unlike fixed-price contracts, where the contractor bears the risk of cost overruns to maintain their profit margin, CPFF provides less incentive for the contractor to control costs rigorously, potentially leading to a higher final price than anticipated.

What is the 'BR' (Bestiality Rating) of 99308 and how does it relate to competition?

The 'BR' field, likely intended to represent a 'Bestiality Rating' or a similar internal metric, is not a standard or publicly recognized federal procurement term. Its value of 99308 is exceptionally high and does not correspond to typical competition indicators. In the context of federal contracting data, such high or unusual numerical values often signify highly restricted procurements, potentially sole-source awards, or specific internal classifications not meant for public interpretation. Given the contract was 'Not Competed', this high 'BR' value likely reinforces the notion that the procurement was highly restricted, possibly indicating a unique capability or a lack of viable alternatives, rather than reflecting a competitive market assessment.

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: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: J S MCDONNELL BLVD, SAINT LOUIS, MO, 90

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline