DoD awards Boeing $75.6M for Massive Ordnance Penetrator enhancements, raising concerns about competition and value
Contract Overview
Contract Amount: $75,644,638 ($75.6M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2014-11-19
End Date: 2018-07-31
Contract Duration: 1,350 days
Daily Burn Rate: $56.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: MASSIVE ORDNANCE PENETRATOR ENHANCED THREAT RESPONSE III AND IV
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $75.6 million to THE BOEING COMPANY for work described as: MASSIVE ORDNANCE PENETRATOR ENHANCED THREAT RESPONSE III AND IV Key points: 1. Significant investment in advanced ordnance capabilities. 2. Sole-source award to Boeing limits competitive pricing. 3. Long contract duration may increase cost overruns. 4. Focus on enhancing existing platforms rather than new development.
Value Assessment
Rating: questionable
The contract's cost-plus incentive fee structure allows for profit beyond initial estimates, potentially leading to higher overall costs. Benchmarking against similar advanced weapons system development contracts is difficult due to the specialized nature of the MOP.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award to The Boeing Company. This lack of competition limits price discovery and may result in higher costs for taxpayers.
Taxpayer Impact: The absence of competition for this significant defense contract raises concerns about whether the government secured the best possible price for taxpayers.
Public Impact
Enhances U.S. strategic bombing capabilities. Supports modernization of the Air Force's long-range strike arsenal. Contributes to national defense and deterrence posture.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type
- Long contract duration
Positive Signals
- Enhances critical defense capability
- Award to established defense contractor
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on advanced weapons systems. Spending in this area is driven by national security priorities and technological advancements in military hardware.
Small Business Impact
The contract was not awarded to small businesses, and there is no indication of subcontracting plans for small business participation. This award primarily benefits large defense contractors.
Oversight & Accountability
The Department of the Air Force is responsible for oversight. The cost-plus incentive fee structure requires careful monitoring to ensure contractor performance and cost control.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award lacks competition.
- Cost-plus contract type can lead to cost overruns.
- Long contract duration increases risk.
- Lack of small business participation.
Tags
search-detection-navigation-guidance-aer, department-of-defense, mo, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $75.6 million to THE BOEING COMPANY. MASSIVE ORDNANCE PENETRATOR ENHANCED THREAT RESPONSE III AND IV
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 $75.6 million.
What is the period of performance?
Start: 2014-11-19. End: 2018-07-31.
What is the justification for the sole-source award, and what steps were taken to ensure fair and reasonable pricing without competition?
The justification for a sole-source award typically involves unique capabilities or proprietary technology held by a single contractor. Without detailed documentation, it's difficult to assess the specific reasons for this award. However, the government should have conducted a thorough price analysis, potentially using historical data or independent cost estimates, to ensure the negotiated price was fair and reasonable despite the lack of competitive bids.
How does the cost-plus incentive fee structure mitigate risks associated with developing advanced, potentially unpredictable technologies like the MOP?
A cost-plus incentive fee (CPIF) contract aims to incentivize the contractor to control costs by sharing in any savings or overruns against a target cost. For advanced technologies, this structure can help manage the inherent uncertainties in development. However, it also requires robust government oversight to ensure the target costs are realistic and that the contractor is genuinely motivated to achieve efficiencies rather than simply passing costs through.
What is the long-term strategic value and cost-effectiveness of enhancing the Massive Ordnance Penetrator compared to developing entirely new munitions?
Enhancing existing platforms like the MOP can be more cost-effective in the short to medium term than developing entirely new munitions, leveraging existing infrastructure and knowledge. The long-term value depends on the evolving threat landscape and the MOP's continued relevance. A thorough analysis comparing the lifecycle costs and operational effectiveness of enhanced MOPs versus next-generation munitions would be necessary to determine true cost-effectiveness.
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: WEAPONS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
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: $75,644,638
Exercised Options: $75,644,638
Current Obligation: $75,644,638
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2014-11-19
Current End Date: 2018-07-31
Potential End Date: 2018-07-31 00:00:00
Last Modified: 2021-07-21
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