DoD awards Boeing $23.9M for Navigation Systems, raising concerns about limited competition
Contract Overview
Contract Amount: $23,915,981 ($23.9M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2005-04-21
End Date: 2006-09-30
Contract Duration: 527 days
Daily Burn Rate: $45.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Place of Performance
Location: SAINT CHARLES, ST. CHARLES County, MISSOURI, 63301
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $23.9 million to THE BOEING COMPANY for work described as: Key points: 1. Significant contract value awarded to a single large vendor. 2. Lack of competition may lead to inflated prices. 3. Potential for taxpayer funds to be used inefficiently. 4. Focus on critical navigation systems highlights national security implications.
Value Assessment
Rating: questionable
The contract value of $23.9 million for navigation systems is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to similar contracts in the market.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to The Boeing Company. This limits price discovery and potentially increases costs for the government.
Taxpayer Impact: The lack of competition means taxpayers may be paying a premium for these navigation systems, as there was no market pressure to drive down costs.
Public Impact
Awarded to a major defense contractor, potentially impacting smaller businesses. Essential navigation systems are critical for military operations. Long-term reliance on a single provider could create future dependency.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for overpricing
Positive Signals
- Award to established defense contractor
- Critical system procurement
Sector Analysis
This contract falls within the aerospace and defense sector, specifically focusing on navigation and guidance systems. Spending in this area is often characterized by high R&D costs and specialized manufacturing, with a significant portion of the market dominated by a few large prime contractors.
Small Business Impact
The sole-source nature of this award to a large prime contractor like Boeing typically offers limited direct opportunities for small businesses, unless they are subcontractors. Further analysis would be needed to determine the extent of small business participation.
Oversight & Accountability
The 'NOT COMPETED' designation suggests a waiver of standard competitive procedures. Oversight is crucial to ensure the justification for this sole-source award was sound and that the pricing is fair and reasonable.
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
- Lack of competitive bidding
- Potential for inflated pricing
- Limited transparency on justification
- Dependency on a single vendor
Tags
search-detection-navigation-guidance-aer, department-of-defense, mo, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $23.9 million to THE BOEING COMPANY. See the official description on USAspending.
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 $23.9 million.
What is the period of performance?
Start: 2005-04-21. End: 2006-09-30.
What was the specific justification for awarding this contract on a sole-source basis?
The justification for a sole-source award typically involves factors such as unique capabilities, urgent need, or the unavailability of other sources. Without access to the specific documentation, it's impossible to confirm the exact reasons. However, such justifications are often scrutinized to prevent potential abuses and ensure fair use of taxpayer funds.
How does the $23.9 million price compare to industry benchmarks for similar navigation systems?
Benchmarking this specific contract's price is challenging without detailed technical specifications and market data for comparable systems. However, given the sole-source nature, there's an inherent risk that the price may be higher than if it had undergone a competitive bidding process. Independent cost analysis would be required for a definitive comparison.
What is the long-term strategic risk of relying solely on Boeing for these critical navigation systems?
The long-term strategic risk includes potential vendor lock-in, reduced innovation due to lack of competition, and vulnerability if Boeing faces production issues or significant price increases in the future. This dependency could impact the Air Force's flexibility and potentially increase future acquisition costs.
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: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: J S MCDONNELL BLVD, SAINT LOUIS, MO, 90
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2005-04-21
Current End Date: 2006-09-30
Potential End Date: 2006-09-30 00:00:00
Last Modified: 2010-08-06
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