DoD's $67.3M DRAGON LRIP Contract with Boeing Faces Scrutiny for Limited Competition
Contract Overview
Contract Amount: $67,331,646 ($67.3M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2017-06-29
End Date: 2027-01-18
Contract Duration: 3,490 days
Daily Burn Rate: $19.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: IGF::OT::IGF DIMINISHING MANUFACTURING SOURCES REPLACEMENT OF AVIONICS FOR GLOBAL OPERATIONS AND NAVIGATION (DRAGON) LRIP LOW-RATE INITIAL PRODUCTION
Place of Performance
Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73135
State: Oklahoma Government Spending
Plain-Language Summary
Department of Defense obligated $67.3 million to THE BOEING COMPANY for work described as: IGF::OT::IGF DIMINISHING MANUFACTURING SOURCES REPLACEMENT OF AVIONICS FOR GLOBAL OPERATIONS AND NAVIGATION (DRAGON) LRIP LOW-RATE INITIAL PRODUCTION Key points: 1. The contract awarded to The Boeing Company for avionics replacement is a significant investment. 2. Limited competition raises concerns about potential overpricing and reduced innovation. 3. The 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector is critical for defense. 4. Oversight is needed to ensure value for taxpayer money given the sole-source nature.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee structure, combined with limited competition, makes a direct pricing assessment difficult. Benchmarking against similar avionics replacement contracts is challenging without more data on the specific systems and their complexity.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs for the government compared to a competitive environment.
Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for these avionics systems, as there was no market pressure to drive down costs.
Public Impact
Modernization of critical Air Force navigation and guidance systems. Potential impact on aircraft operational readiness and safety. Long-term sustainment costs for these avionics systems. Dependency on a single contractor for essential components.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Long contract duration
Positive Signals
- Essential defense system upgrade
- Potential for technological advancement within the awarded company
Sector Analysis
This contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector, a critical area for defense capabilities. Spending in this sector is often high due to the specialized nature and advanced technology required.
Small Business Impact
There is no indication that small businesses were involved in this specific contract award. Future opportunities should explore avenues for small business participation in the supply chain or related services.
Oversight & Accountability
The sole-source nature of this contract warrants close oversight from the Department of Defense and potentially the Inspector General to ensure cost reasonableness and performance standards are met throughout its duration.
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
- Lack of competition
- Cost-plus contract type
- Long contract duration (2017-2027)
- Potential for cost overruns
- Limited visibility into pricing structure
Tags
search-detection-navigation-guidance-aer, department-of-defense, ok, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $67.3 million to THE BOEING COMPANY. IGF::OT::IGF DIMINISHING MANUFACTURING SOURCES REPLACEMENT OF AVIONICS FOR GLOBAL OPERATIONS AND NAVIGATION (DRAGON) LRIP LOW-RATE INITIAL 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 $67.3 million.
What is the period of performance?
Start: 2017-06-29. End: 2027-01-18.
What is the estimated cost savings that could have been achieved through a competitive bidding process for this avionics replacement?
Quantifying exact savings without a competitive process is speculative. However, historical data in defense procurement suggests that competitive bidding can yield savings ranging from 10% to 30% or more, depending on the complexity and market dynamics of the specific system being procured. The lack of competition here likely means the government did not benefit from this potential cost reduction.
What are the specific risks associated with relying on a single source for critical avionics components over a nearly decade-long period?
The primary risks include potential price escalation, lack of innovation, and supply chain vulnerabilities. A sole-source provider may face fewer incentives to reduce costs or improve technology. Furthermore, any disruption to the sole provider, whether due to financial issues, production problems, or geopolitical events, could severely impact the operational readiness of the affected aircraft fleet.
How will the effectiveness of these new avionics systems be measured, and what are the key performance indicators (KPIs) for this contract?
Effectiveness is typically measured against pre-defined performance metrics outlined in the contract, such as improved navigation accuracy, enhanced situational awareness, reduced pilot workload, and increased system reliability (e.g., Mean Time Between Failures). Key Performance Indicators (KPIs) would likely include mission success rates, system uptime, and adherence to delivery schedules for the LRIP and subsequent production phases.
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: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 6001 S AIR DEPOT BLVD, OKLAHOMA CITY, OK, 73135
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: $77,606,759
Exercised Options: $77,606,759
Current Obligation: $67,331,646
Actual Outlays: $2,996,013
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2017-06-29
Current End Date: 2027-01-18
Potential End Date: 2027-01-18 00:00:00
Last Modified: 2025-12-18
More Contracts from THE Boeing Company
- KC-X Modernization Program — $32.0B (Department of Defense)
- International Space Station — $22.4B (National Aeronautics and Space Administration)
- 200112!000108!9700!ZD60 !ballistic Missile Defense ORG. !HQ000601C0001 !A!N!*!N! !20001222!20080930!848025649!848025649!009256819!n!the Boeing Company !3370 E Miraloma AVE !anaheim !ca!92806!37000!089!01!huntsville !madison !alabama !+000383571022!n!n!000000000000!ad93!rdte/Other Defense-Adv Tech DEV !S1 !services !1caa!ballistic Missile Defense SYS !541710!*!*!3! ! ! !*!*!*!B!*!*!A! !A !U!R!2!001!B! !Z!Y!Z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! — $18.8B (Department of Defense)
- USN P-8A FRP II Long Lead Material — $18.1B (Department of Defense)
- 200512!010860!2100!w56hzv!tacom - Warren !w56hzv05c0724 !A!N! !Y! ! !20050923!20141231!016544780!016544780!009256819!n!the Boeing Company !J S Mcdonnell Blvd !saint Louis !mo!63166!65000!510!29!st. Louis !ST. Louis (city) !missouri !+000219245691!n!n!000000000000!az15!rdte/Other Research&development-Eng/Manuf Devel !S1 !services !301 !FCS !541330!E! !1! ! ! ! ! !20200930!B! ! !A! !d!u!u!1!001!n!1a!z!y!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! ! TAS::21 2040::TAS — $12.7B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)