Boeing awarded $121.7M for JDAM production, with potential for future lots
Contract Overview
Contract Amount: $121,720,966 ($121.7M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2008-01-10
End Date: 2010-06-30
Contract Duration: 902 days
Daily Burn Rate: $134.9K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 1
Pricing Type: COST NO FEE
Sector: Defense
Official Description: JDAM PRODUCTION LOT 12 WITH FIRM-FIXED-PRICE OPTIONS FOR PRODUCTION LOTS 13-17
Place of Performance
Location: SAINT LOUIS, ST. LOUIS County, MISSOURI, 63134, UNITED STATES OF AMERICA
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $121.7 million to THE BOEING COMPANY for work described as: JDAM PRODUCTION LOT 12 WITH FIRM-FIXED-PRICE OPTIONS FOR PRODUCTION LOTS 13-17 Key points: 1. Contract awarded to a single, established prime contractor. 2. Focus on production of a critical munitions system. 3. Contract includes firm-fixed-price options for subsequent production lots. 4. Performance period spans over two years. 5. Awarded by the Department of the Air Force. 6. The contract type suggests a competitive process was utilized. 7. The North American Industry Classification System (NAICS) code points to instrument manufacturing.
Value Assessment
Rating: good
The contract value of $121.7 million for JDAM production appears reasonable given the nature of defense munitions. While specific value-for-money analysis requires detailed cost breakdowns and comparisons to similar production runs, the firm-fixed-price structure for options suggests an effort to control future costs. Benchmarking against historical JDAM production costs or similar missile/ordnance contracts would provide further insight into pricing efficiency.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while the initial award might have had specific source exclusions, the overall process aimed for broad competition. The presence of multiple bidders, if applicable, would typically drive down prices and ensure fair market value. The specific nature of this award suggests a competitive process was followed to select the most advantageous offer.
Taxpayer Impact: A competitive award process helps ensure that taxpayer dollars are used efficiently by fostering price discovery and encouraging contractors to offer their best pricing.
Public Impact
The primary beneficiaries are the U.S. Air Force and potentially other branches of the military, ensuring readiness and operational capability. The contract delivers Joint Direct Attack Munitions (JDAMs), a crucial component for precision-guided aerial warfare. Geographic impact is primarily within the United States, related to manufacturing and supply chain operations. Workforce implications include employment at Boeing facilities and its associated supply chain partners.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for sole-source follow-on contracts if competition is not re-established for future lots.
- Reliance on a single prime contractor for a critical defense system.
- Limited transparency into the specific cost drivers for the JDAM production.
Positive Signals
- Firm-fixed-price options provide cost predictability for future production.
- Awarded to a known and experienced defense contractor.
- Production of a widely used and effective munitions system.
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically focusing on guided missile and space vehicle production and parts. The market for defense munitions is characterized by long-term government contracts, significant R&D investment, and a relatively concentrated supplier base. Spending in this area is driven by national security requirements and geopolitical factors.
Small Business Impact
The provided data indicates that small business participation (sb) is false for this prime contract. This suggests that the primary award was not set aside for small businesses. However, the prime contractor, Boeing, is likely to engage small businesses as subcontractors within its extensive supply chain for components and services, though the extent of this subcontracting is not detailed here.
Oversight & Accountability
Oversight for this contract would typically be managed by the Department of the Air Force's contracting and program management offices. Accountability measures are embedded in the contract terms, including performance requirements and payment schedules. Transparency is generally maintained through contract award databases and reporting requirements, though detailed cost breakdowns may be proprietary.
Related Government Programs
- JDAM Program
- Air Force Munitions Procurement
- Precision Guided Munitions
- Defense Production Contracts
Risk Flags
- Potential for supply chain vulnerabilities
- Long-term sustainment and modernization needs
- Dependence on a single prime contractor for critical munitions
Tags
defense, munitions, air-force, full-and-open-competition, production, firm-fixed-price, boeing, joint-direct-attack-munition, missile-and-space-equipment-manufacturing, missouri
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $121.7 million to THE BOEING COMPANY. JDAM PRODUCTION LOT 12 WITH FIRM-FIXED-PRICE OPTIONS FOR PRODUCTION LOTS 13-17
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 $121.7 million.
What is the period of performance?
Start: 2008-01-10. End: 2010-06-30.
What is the historical spending trend for JDAM production by the Department of Defense?
Historical spending on JDAM production has been substantial, reflecting the system's widespread adoption and operational use across various military branches. While specific figures fluctuate year-to-year based on demand, inventory levels, and evolving threats, the JDAM program has consistently represented a significant portion of the DoD's munitions budget. For instance, prior to this specific lot award, the DoD had procured tens of thousands of JDAM kits annually. Analyzing annual defense appropriations acts and contract award databases would reveal a multi-billion dollar cumulative investment in JDAM technology and production over the past two decades, with significant spending in the early 2000s during active combat operations and continued procurement for modernization and sustainment.
How does the unit cost of JDAMs under this contract compare to previous production lots or similar munitions?
Direct unit cost comparison is challenging without access to the specific pricing details of this contract and historical lot data. However, the firm-fixed-price (FFP) nature of the options for lots 13-17 suggests an intent to stabilize or potentially reduce unit costs compared to cost-plus arrangements. Historically, as production volumes increase and manufacturing processes mature, unit costs for established systems like the JDAM tend to decrease due to economies of scale and learning curve effects. Benchmarking against publicly available data for similar precision-guided munitions from other manufacturers or previous DoD solicitations would be necessary for a comprehensive assessment of value for money.
What are the key performance metrics and risks associated with JDAM production?
Key performance metrics for JDAM production typically include on-time delivery, adherence to quality specifications (e.g., reliability, accuracy), and meeting production rate targets. Risks associated with this contract could include supply chain disruptions for critical components, potential cost overruns if unforeseen technical issues arise (though mitigated by FFP), and the risk of obsolescence as newer munitions technologies emerge. Ensuring the continued availability of specialized components and maintaining the skilled workforce necessary for precision manufacturing are also critical considerations.
What is the strategic importance of the JDAM system to the U.S. Air Force and overall defense strategy?
The JDAM system is strategically vital as it transforms unguided "dumb" bombs into accurate, all-weather "smart" munitions. This significantly enhances the effectiveness of air power, allowing aircraft to engage targets with greater precision from safer standoff distances, thereby reducing collateral damage and increasing mission success rates. Its widespread integration across multiple aircraft platforms and its relatively low unit cost compared to other precision-guided munitions make it a cornerstone of the Air Force's and DoD's conventional strike capabilities, essential for both current operations and future contingency planning.
What is the track record of The Boeing Company in producing complex defense systems like the JDAM?
The Boeing Company has a long and extensive track record of successfully producing complex defense systems for the U.S. military and international allies. They are a major defense contractor with deep expertise in aerospace engineering, manufacturing, and program management. Boeing has been a key player in the JDAM program, demonstrating its capability to meet stringent quality, schedule, and performance requirements. Their history includes delivering numerous advanced aircraft, weapons systems, and space exploration hardware, underscoring their reliability as a prime contractor for critical defense programs.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 1
Pricing Type: COST NO FEE (S)
Evaluated Preference: NONE
Contractor Details
Address: 6200 JS MCDONNELL BLVD, SAINT LOUIS, MO, 63134
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $590,982,840
Exercised Options: $121,720,966
Current Obligation: $121,720,966
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2008-01-10
Current End Date: 2010-06-30
Potential End Date: 2010-06-30 00:00:00
Last Modified: 2015-07-10
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