Air Force awards $263M contract for Massive Ordnance Penetrator (MOP) production to Boeing

Contract Overview

Contract Amount: $26,285,280 ($26.3M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2019-09-30

End Date: 2024-12-31

Contract Duration: 1,919 days

Daily Burn Rate: $13.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MASSIVE ORDNANCE PENETRATOR (MOP) PRODUCTION

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $26.3 million to THE BOEING COMPANY for work described as: MASSIVE ORDNANCE PENETRATOR (MOP) PRODUCTION Key points: 1. Contract awarded to a single, established prime contractor with extensive experience in large-scale defense systems. 2. The contract utilizes a firm-fixed-price structure, aiming to provide cost certainty for the government. 3. Delivery order structure suggests phased production and delivery over a multi-year period. 4. The specific nature of the ordnance implies a critical national security requirement. 5. Limited competition raises questions about potential price efficiencies and alternative solutions. 6. The contract duration extends into late 2024, indicating a sustained production need.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging due to the unique nature of the Massive Ordnance Penetrator (MOP). As a highly specialized munition, direct comparisons to similar contracts are difficult. The firm-fixed-price structure provides some cost control, but without competitive bids, it's hard to definitively assess if the $263 million represents optimal value for money. The historical spending on this program, if available, would offer better context for assessing price trends and efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, The Boeing Company, was solicited. This approach is typically employed when a unique capability or proprietary technology is involved, or when only one responsible source can fulfill the requirement. The lack of competition means that price discovery through market forces was not utilized, potentially leading to higher costs than if multiple bidders had vied for the contract.

Taxpayer Impact: Taxpayers may not benefit from the cost savings typically achieved through a competitive bidding process. The absence of competition limits the government's ability to negotiate the best possible price.

Public Impact

The primary beneficiaries are the U.S. Air Force and national defense capabilities, ensuring the availability of advanced munitions. The contract supports the production of specialized, high-yield penetration bombs designed for hardened targets. Geographic impact is primarily centered around Boeing's production facilities, likely in Missouri, and associated supply chains. Workforce implications include skilled manufacturing jobs in aerospace and defense sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential cost savings for taxpayers.
Lack of transparency in the justification for sole-source procurement.
Long contract duration could be subject to cost overruns if not managed tightly.

Positive Signals

Award to a prime contractor with proven expertise in complex defense systems ensures capability delivery.
Firm-fixed-price contract provides budget certainty for the government.
Delivery order structure allows for phased funding and management of production.

Sector Analysis

The defense sector, specifically munitions manufacturing, is characterized by high barriers to entry, significant R&D investment, and long production cycles. Contracts for advanced weaponry like the MOP are often sole-sourced due to the specialized nature of the technology and the limited number of qualified manufacturers. The market size for such niche, high-value munitions is relatively small, driven by specific military requirements and strategic objectives. This contract represents a significant investment in a key strategic capability within the broader aerospace and defense industry.

Small Business Impact

This contract does not appear to involve a small business set-aside, as it was awarded directly to The Boeing Company. There is no explicit information provided regarding subcontracting plans for small businesses. Without a competitive bidding process or specific set-aside requirements, the direct impact on the small business ecosystem is likely minimal, though Boeing may engage small businesses within its supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. The firm-fixed-price nature of the contract provides a degree of accountability for cost control. Transparency regarding the justification for the sole-source award and ongoing performance monitoring would be key oversight mechanisms. The Inspector General's office for the Department of Defense would have jurisdiction for audits and investigations if any irregularities were suspected.

Related Government Programs

Advanced Conventional Ammunition Programs
Strategic Weapons Systems
Air-Launched Weapons Development
Department of Defense Munitions Procurement

Risk Flags

Sole-source award
Lack of competitive pricing data
Specialized and unique munition system

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.3 million to THE BOEING COMPANY. MASSIVE ORDNANCE PENETRATOR (MOP) PRODUCTION

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 $26.3 million.

What is the period of performance?

Start: 2019-09-30. End: 2024-12-31.

What is the specific operational requirement driving the need for the Massive Ordnance Penetrator (MOP)?

The Massive Ordnance Penetrator (MOP), officially designated the GBU-57, is designed to penetrate deeply buried, hardened targets. Its development was driven by the need for a weapon capable of destroying high-value, underground facilities such as command centers, weapons storage sites, or WMD facilities that are protected by thick layers of concrete and earth. The MOP's large size and specialized warhead allow it to deliver a significant explosive payload deep within such structures, making it a key component of the U.S. strategic deterrence and strike capabilities against heavily fortified enemy locations.

How does the $263 million contract value compare to historical spending on the MOP program?

Without access to detailed historical spending data specifically for the MOP program, a direct comparison is difficult. The $263 million represents the total value of this particular contract, which includes production and delivery orders over its specified period. To assess if this is high or low historically, one would need to examine previous contracts for MOP development, testing, and initial production phases. Factors such as inflation, changes in production scale, and technological updates would influence year-over-year spending comparisons. A comprehensive analysis would require a review of the program's entire lifecycle cost.

What are the primary risks associated with a sole-source contract for advanced munitions like the MOP?

The primary risks associated with a sole-source contract for advanced munitions like the MOP include a lack of price competition, which can lead to higher costs for the government compared to a competitively awarded contract. There's also a potential for reduced innovation, as the sole provider may have less incentive to improve efficiency or explore cost-saving measures. Furthermore, reliance on a single supplier can create supply chain vulnerabilities and reduce flexibility if production issues arise or if alternative technologies emerge. Ensuring robust oversight and negotiation is critical to mitigate these risks.

What is The Boeing Company's track record with producing large-scale, complex defense systems?

The Boeing Company has a long and extensive track record of producing large-scale, complex defense systems for the U.S. military and international partners. They are a major player in military aircraft (e.g., F-15, F/A-18, B-52 upgrades), rotorcraft (e.g., Apache, Chinook), and various missile and weapons systems. Their experience includes managing intricate supply chains, adhering to stringent quality and safety standards, and delivering sophisticated technological solutions. Boeing's established infrastructure and expertise in aerospace engineering and manufacturing make them a logical choice for programs like the MOP, which require specialized knowledge and production capabilities.

How does the firm-fixed-price contract type mitigate financial risk for the Air Force?

A firm-fixed-price (FFP) contract type is designed to shift the majority of financial risk from the buyer (the Air Force) to the seller (The Boeing Company). Under an FFP contract, the price is set and not subject to adjustment based on the contractor's cost experience. This means that if Boeing's costs to produce the MOPs are higher than anticipated, the Air Force is not obligated to pay more than the agreed-upon price. Conversely, if Boeing manages its costs effectively and achieves a lower-than-expected cost, they retain the profit. This structure provides the Air Force with budget certainty and protects against cost overruns.

What are the potential implications of the MOP program's duration extending to late 2024?

The MOP program's duration extending to late 2024 suggests a sustained need for this specialized munition and a phased production approach. This extended timeline allows for more manageable production schedules, potentially improving quality control and reducing the risk of production bottlenecks. For the contractor, it provides a stable revenue stream and allows for workforce planning. However, a longer duration also increases the exposure to potential changes in threat assessments, technological advancements, or budget priorities over the contract period. It also necessitates ongoing program management and oversight to ensure continued relevance and cost-effectiveness.

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: 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: $26,285,280

Exercised Options: $26,285,280

Current Obligation: $26,285,280

Subaward Activity

Number of Subawards: 26

Total Subaward Amount: $12,734,298

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA868119D0008

IDV Type: IDC

Timeline