Boeing awarded $38.3M for MASSIVE ORDNANCE PENETRATOR GBU-57 production, a sole-source contract

Contract Overview

Contract Amount: $38,323,375 ($38.3M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2018-02-08

End Date: 2023-12-29

Contract Duration: 2,150 days

Daily Burn Rate: $17.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MASSIVE ORDNANCE PENETRATOR GBU-57 PRODUCTION BUY

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $38.3 million to THE BOEING COMPANY for work described as: MASSIVE ORDNANCE PENETRATOR GBU-57 PRODUCTION BUY Key points: 1. Contract awarded to a single, established provider suggests limited market alternatives for this specialized munition. 2. The firm fixed-price structure aims to control costs, but the lack of competition may limit price negotiation. 3. Long contract duration (2150 days) indicates a sustained need for this capability. 4. The contract's value, while significant, should be assessed against the strategic importance and unit cost of advanced munitions. 5. Focus on production buy suggests a transition from development to sustainment of existing systems. 6. Sole-source nature raises questions about potential overpricing compared to a competitive environment.

Value Assessment

Rating: fair

The contract value of $38.3 million for the GBU-57 production buy is difficult to benchmark without detailed cost breakdowns or comparisons to similar advanced munition production contracts. As a sole-source award, there is an inherent risk that the pricing may not reflect the most competitive market rates. However, the firm fixed-price (FFP) contract type provides cost certainty for the government. Without data on the number of units procured or the unit cost, a precise value-for-money assessment is challenging, but the lack of competition is a primary concern.

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 potential suppliers. This typically occurs when a single contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the government's requirements. The lack of competition means that the Department of Defense did not benefit from a bidding process that could drive down prices through market forces. This approach is often justified for highly specialized or technologically advanced systems where alternatives are non-existent or prohibitively expensive to develop.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive bidding. Without alternative offers, the government has limited leverage to negotiate the lowest possible price for these advanced munitions.

Public Impact

The primary beneficiaries are the U.S. Air Force and potentially other branches requiring deep-penetrating munitions for hardened targets. The contract delivers advanced munition production, enhancing strategic strike capabilities. Geographic impact is primarily at the manufacturing facilities of the contractor, The Boeing Company. Workforce implications include sustained employment at Boeing facilities involved in the production of the GBU-57.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency in the justification for sole-source procurement.
Long contract duration could lead to cost overruns if not managed effectively.
Potential for contractor lock-in due to specialized nature of the munition.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award to a known, established contractor like Boeing suggests a focus on reliable delivery of a critical capability.
Production buy indicates a mature system likely meeting performance requirements.
Contract supports a key strategic defense asset.

Sector Analysis

The defense sector, particularly munition manufacturing, is characterized by high barriers to entry due to specialized technology, stringent quality control, and significant capital investment. Contracts for advanced munitions like the GBU-57 are often awarded to a limited number of prime contractors. The market size for such specialized weapons is driven by national security requirements and geopolitical factors. This contract fits within the broader category of defense procurement for strategic weapons systems, where innovation and capability are prioritized, often leading to sole-source or limited competition awards.

Small Business Impact

This contract does not appear to include specific small business set-aside provisions, nor is there explicit information regarding subcontracting goals for small businesses. As a sole-source award to a large prime contractor, the primary focus is on the prime's ability to deliver the specialized munition. Opportunities for small businesses would likely arise through Boeing's own supply chain, potentially for components or specialized services, but these are not directly mandated by this contract's structure. Further analysis of Boeing's subcontracting plan would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices within the Air Force. Accountability measures are embedded in the firm fixed-price contract terms, which obligate the contractor to deliver the specified munitions at the agreed-upon price. Transparency is limited due to the sole-source nature and the classified aspects often associated with advanced munitions. The Inspector General's office within the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

Air-to-Ground Munitions
Strategic Weapons Systems
Advanced Conventional Weapons
Department of Defense Procurement
Ammunition Manufacturing
Large Diameter Bombs

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.3 million to THE BOEING COMPANY. MASSIVE ORDNANCE PENETRATOR GBU-57 PRODUCTION BUY

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 $38.3 million.

What is the period of performance?

Start: 2018-02-08. End: 2023-12-29.

What is the specific unit cost of the GBU-57 'Massive Ordnance Penetrator' under this contract?

The provided data does not specify the number of GBU-57 units being procured under this $38.3 million contract, making it impossible to calculate the exact unit cost. The total award amount represents the aggregate cost for the production buy. To determine the unit cost, one would need to divide the total contract value by the quantity of munitions delivered. Without this quantity information, any calculation would be speculative. However, given the advanced capabilities and specialized nature of the GBU-57, its unit cost is expected to be significantly higher than conventional munitions due to complex design, materials, and manufacturing processes.

What is the justification for awarding this contract on a sole-source basis?

Sole-source awards are typically justified when only one responsible source is capable of providing the required supplies or services. For advanced munitions like the GBU-57, this justification often stems from unique technological capabilities, proprietary designs, or the extensive research and development investment already made by the original developer, which is often the prime contractor. The Department of Defense would have a formal justification document (e.g., a Justification and Approval for Other Than Full and Open Competition) outlining why competition is not feasible or not in the government's best interest. This could include factors like the need for commonality with existing systems, unique testing and evaluation requirements, or the unavailability of alternative solutions that meet stringent performance specifications.

How does the $38.3 million contract value compare to historical spending on the GBU-57 program?

The provided data only includes information for this specific contract award of $38.3 million for the GBU-57 production buy, with an award date of February 8, 2018, and an estimated completion date of December 29, 2023. It does not provide historical spending data for the GBU-57 program. To compare this value, one would need access to historical contract databases or program budget documents that detail previous awards for GBU-57 development, testing, and production. Without that context, it's difficult to ascertain if $38.3 million represents a significant increase, decrease, or is consistent with past investment levels for this munition.

What are the key performance metrics or requirements associated with the GBU-57 production?

The specific key performance metrics (KPMs) for the GBU-57 production are not detailed in the provided contract data. However, as a 'Massive Ordnance Penetrator,' its primary performance requirement is the ability to penetrate deeply buried, hardened targets. This implies stringent specifications related to warhead effectiveness, penetration capability (likely measured in feet of reinforced concrete or specific soil densities), guidance accuracy, range, and reliability. The production contract would ensure that each unit manufactured meets these predefined technical specifications and quality standards established during the system's development and testing phases. Compliance with these KPMs would be verified through government acceptance testing and quality assurance processes.

What is the role of The Boeing Company in the GBU-57 program, and what is their track record with this specific munition?

The Boeing Company is listed as the contractor for this $38.3 million production buy of the GBU-57 'Massive Ordnance Penetrator.' This indicates that Boeing is the prime manufacturer responsible for producing these advanced munitions. Their track record with the GBU-57 likely involves prior development, testing, and potentially earlier production phases of the weapon system. As a major defense contractor with extensive experience in aerospace and weapon systems, Boeing is well-positioned to handle the complex manufacturing requirements for such a specialized munition. Their history with the GBU-57 would involve demonstrating the capability to meet stringent performance, quality, and delivery requirements, as evidenced by their selection for this production contract.

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: $38,323,375

Exercised Options: $38,323,375

Current Obligation: $38,323,375

Subaward Activity

Number of Subawards: 33

Total Subaward Amount: $10,867,469

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline