Boeing awarded $12.8M for Joint Direct Attack Munition, a sole-source contract with a 5-year duration

Contract Overview

Contract Amount: $12,759,844 ($12.8M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2021-07-22

End Date: 2026-06-01

Contract Duration: 1,775 days

Daily Burn Rate: $7.2K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: JOINT DIRECT ATTACK MUNITION

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $12.8 million to THE BOEING COMPANY for work described as: JOINT DIRECT ATTACK MUNITION Key points: 1. Contract awarded to a single, established provider, raising questions about price competitiveness. 2. Long-term contract (5 years) suggests a sustained need for these munitions. 3. The cost-plus-fixed-fee structure may incentivize cost overruns. 4. Performance is tied to delivery orders, indicating a phased approach to acquisition. 5. The contract falls under engineering services, supporting the development and sustainment of complex defense systems.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable sole-source awards. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex R&D or services where costs are uncertain, can lead to higher overall expenditures compared to fixed-price contracts. The total award value of $12.8 million over five years averages to approximately $2.56 million annually, which needs to be assessed against the scope and complexity of the engineering services provided for the Joint Direct Attack Munition program.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This typically occurs when only one vendor possesses the necessary technical expertise, intellectual property, or security clearances. The lack of competition means that the government did not solicit bids from multiple sources, potentially limiting price discovery and negotiation leverage. The justification for a sole-source award would need to be thoroughly documented to ensure it aligns with federal procurement regulations.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as competitive pressures are absent, potentially leading to less favorable pricing than if multiple vendors had bid.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Air Force, receiving critical munitions support. Services delivered include engineering support essential for the sustainment and potential upgrades of the Joint Direct Attack Munition system. The geographic impact is primarily within the United States, supporting domestic defense industrial capabilities. Workforce implications include employment for engineers and technical staff at The Boeing Company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Cost-plus-fixed-fee contract type may not provide sufficient incentive for cost control by the contractor.
Long contract duration could lock the government into a potentially suboptimal solution if market conditions or technology change.

Positive Signals

Award to a single, established contractor (Boeing) suggests a high level of trust and proven capability for this specific system.
The contract supports a critical defense program (JDAM), ensuring continued operational readiness.
The fixed fee component of the CPFF contract provides some level of cost certainty for the contractor's profit.

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, significant R&D investment, and long product development cycles. Contracts like this, supporting complex munitions systems, are typical within this industry. The market for such specialized engineering services is often concentrated among a few large prime contractors. Benchmarking spending requires comparing this contract's value against the overall defense budget allocated to munitions sustainment and development, as well as the specific capabilities of the Joint Direct Attack Munition system.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by `sb: false`. Furthermore, the prime contractor is The Boeing Company, a large aerospace firm. There is no explicit information regarding subcontracting plans for small businesses within this specific award notice. The impact on the small business ecosystem is likely minimal unless Boeing actively engages small businesses for specialized support related to this contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures are embedded within the contract terms, including performance requirements tied to delivery orders and the fixed fee structure. Transparency is limited due to the sole-source nature of the award; however, contract award data is publicly available through federal procurement databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Joint Direct Attack Munition (JDAM) Program
Air Force Munitions Procurement
Defense Engineering Services Contracts
Cost-Plus-Fixed-Fee Contracts

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.8 million to THE BOEING COMPANY. JOINT DIRECT ATTACK MUNITION

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 $12.8 million.

What is the period of performance?

Start: 2021-07-22. End: 2026-06-01.

What is the historical spending trend for the Joint Direct Attack Munition program with The Boeing Company?

Analyzing historical spending for the Joint Direct Attack Munition (JDAM) program with The Boeing Company requires accessing detailed contract award data over multiple fiscal years. While this specific award is for $12.8 million over five years, previous contracts for JDAM sustainment, upgrades, or production could reveal significant year-over-year fluctuations or consistent investment. Factors influencing historical spending include production rates, technological modernization efforts, geopolitical demands, and the overall defense budget. Without access to a comprehensive contract history database, it's difficult to provide precise figures, but it's reasonable to assume that sustained support for a critical munitions system like JDAM would involve substantial, multi-year commitments from the Department of Defense to key contractors like Boeing.

How does the pricing structure (Cost Plus Fixed Fee) compare to other contract types for similar defense engineering services?

The Cost Plus Fixed Fee (CPFF) contract type is often used for research and development or complex services where the scope of work is not precisely defined, or costs are difficult to estimate upfront. In such cases, the contractor is reimbursed for allowable costs plus a fixed fee representing their profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF generally offers less cost certainty for the government, as the final cost is not capped. However, FFP contracts can be risky for contractors if costs escalate unexpectedly, potentially leading to contract disputes or contractor failure. For routine services or well-defined procurements, FFP or Fixed-Price Incentive (FPI) contracts are often preferred for better cost control. The choice of CPFF for this JDAM engineering services contract suggests a high degree of uncertainty or complexity in the work being performed.

What are the specific engineering services being procured under this contract for the JDAM program?

The contract notice specifies 'Engineering Services' (NAICS code 541330) for the Joint Direct Attack Munition (JDAM) program. While the exact nature of these services isn't detailed in the summary data, they typically encompass a range of activities crucial for the lifecycle management of complex defense systems. This could include design modifications, systems integration, performance analysis, reliability and maintainability engineering, technical data package updates, testing and evaluation support, and potentially research into future upgrades or variants of the JDAM. Given the program's nature, these services are likely focused on ensuring the continued effectiveness, safety, and operational readiness of the munitions, possibly involving software updates, hardware integration, or addressing obsolescence issues.

What is the justification for awarding this contract on a sole-source basis to The Boeing Company?

The justification for a sole-source award, indicated by 'NOT COMPETED' (ct: NOT COMPETED), typically stems from specific circumstances outlined in federal acquisition regulations. For a program like the Joint Direct Attack Munition (JDAM), common justifications include: 1) Unique capabilities: The Boeing Company may possess proprietary technology, specialized manufacturing processes, or unique technical expertise essential for JDAM engineering services that no other source can provide. 2) Urgent and compelling need: In rare cases, an urgent requirement might exist where competition is not feasible. 3) Industrial base considerations: Maintaining a specific industrial capability or supporting a critical defense supplier could be a factor. The specific justification would be documented in a Justification and Approval (J&A) document, which is required for sole-source procurements above certain thresholds, detailing why competition is impracticable.

What are the potential risks associated with a long-term (5-year) sole-source contract for defense systems?

Long-term, sole-source contracts for defense systems present several potential risks. Firstly, the lack of competition over an extended period can lead to complacency and reduced incentive for the contractor to innovate or optimize costs, potentially resulting in higher prices for the government than if competition were present. Secondly, the government becomes heavily reliant on a single provider, creating vulnerability if the contractor experiences financial difficulties, operational issues, or decides to discontinue support. Thirdly, technological advancements or changes in strategic requirements might render the contracted solution less optimal over the contract's duration, but switching providers could be prohibitively expensive or complex due to the sole-source nature and system integration. Finally, without regular competitive bidding, there's a risk of 'contract lock-in,' where the government is compelled to continue with the incumbent even if better alternatives emerge.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: WEAPONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

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: $12,759,844

Exercised Options: $12,759,844

Current Obligation: $12,759,844

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $9,163,983

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA868119D0005

IDV Type: IDC

Timeline