Boeing awarded $360M for missile and space systems, including critical GPS navigation equipment

Contract Overview

Contract Amount: $359,697,346 ($359.7M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2005-03-18

End Date: 2015-03-17

Contract Duration: 3,651 days

Daily Burn Rate: $98.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200507!000058!5700!FA8807!SMC/GPK !FA880705C0004 !A!N! !N! ! !20050318!20110930!848025649!848025649!009256819!N!THE BOEING COMPANY !3370 E MIRALOMA AVE !ANAHEIM !CA!92806!02000!059!06!ANAHEIM !ORANGE !CALIFORNIA!+000021803000!N!N!000043606000!5825!RADIO NAVIGATION EQUIP, EXCEPT AIRBORNE !A2 !MISSILE AND SPACE SYSTEMS !166 !NAVSTAR GPS !334511!E! !1! ! ! ! ! !20200930!B! ! !A! !D!N!J!1!001!N!1G!Z!Y!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!Y! ! ! !Y! ! !0001! !

Place of Performance

Location: HUNTINGTON BEACH, ORANGE County, CALIFORNIA, 92647

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $359.7 million to THE BOEING COMPANY for work described as: 200507!000058!5700!FA8807!SMC/GPK !FA880705C0004 !A!N! !N! ! !20050318!20110930!848025649!848025649!009256819!N!THE BOEING COMPANY !3370 E MIRALOMA AVE !ANAHEIM !CA!92806!02000!059!06!ANAHEIM !ORAN… Key points: 1. Contract awarded to a single, large defense contractor, raising questions about competition. 2. Significant value suggests a critical role in national defense or space programs. 3. Long contract duration indicates a sustained need for these specialized systems. 4. Fixed-price contract type may offer cost certainty but could limit flexibility. 5. Geographic concentration in California for the contractor's operations. 6. The specific product code points to a niche but vital area of defense technology.

Value Assessment

Rating: fair

The contract value of approximately $360 million over its life is substantial. Benchmarking this against similar contracts for missile and space systems is challenging without more specific details on the exact nature of the 'Radio Navigation Equip, Except Airborne'. However, given the sole-source nature, it's difficult to assess if the pricing represents optimal value for money. The fixed-price nature provides some cost control, but the lack of competition prevents a direct comparison of bids to determine the most competitive price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the requirement. The lack of competition means that taxpayers did not benefit from a competitive bidding process that could have driven down prices.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the best possible price, as there was no opportunity for multiple vendors to compete and offer lower bids.

Public Impact

The primary beneficiaries are likely the Department of Defense and potentially other government agencies relying on the Navstar GPS system for navigation and guidance. Services delivered include the provision of specialized radio navigation equipment crucial for missile and space systems. The geographic impact is national, supporting defense infrastructure and operations. Workforce implications are primarily within The Boeing Company and its supply chain, likely involving highly skilled engineers and technicians.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Lack of transparency in the sole-source justification.
Long-term contract duration without clear performance reviews mentioned.

Positive Signals

Award to a major defense contractor with established capabilities.
Fixed-price contract type offers some budget predictability.
Contract supports a critical national defense system (GPS).

Sector Analysis

This contract falls within the 'Missile and Space Systems' sub-sector of the broader aerospace and defense industry. This is a highly specialized and capital-intensive sector characterized by long development cycles, significant R&D investment, and close relationships with government agencies. The market is dominated by a few large, established players like Boeing. Spending in this area is driven by national security requirements and technological advancement, with contracts often being long-term and high-value.

Small Business Impact

There is no indication of small business set-asides for this contract. As a sole-source award to a large prime contractor, the primary impact on small businesses would be through potential subcontracting opportunities. However, without specific subcontracting plans or goals detailed in the award, it's difficult to assess the extent of small business involvement.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA) and potentially the relevant program executive office within the Department of Defense. Accountability measures are inherent in the fixed-price contract type, which shifts some risk to the contractor. Transparency is limited due to the sole-source nature of the award, with details on the justification for not competing likely residing within agency procurement files.

Related Government Programs

Navstar GPS Program
Missile Systems Procurement
Space Systems Development
Defense Navigation and Guidance Systems

Risk Flags

Sole-source award
Lack of competitive bidding
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $359.7 million to THE BOEING COMPANY. 200507!000058!5700!FA8807!SMC/GPK !FA880705C0004 !A!N! !N! ! !20050318!20110930!848025649!848025649!009256819!N!THE BOEING COMPANY !3370 E MIRALOMA AVE !ANAHEIM !CA!92806!02000!059!06!ANAHEIM !ORANGE !CALIFORNIA!+000021803000!N!N!000043606000!5825!RADIO NAVIGATION EQUIP, EXCEPT AIRBORNE !A2 !MISSILE AND SPACE SYSTEMS !166 !NAVSTAR GPS !334511!E! !1! ! ! ! ! !202

Who is the contractor on this award?

The obligated recipient is THE BOEING COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $359.7 million.

What is the period of performance?

Start: 2005-03-18. End: 2015-03-17.

What is the specific nature of the 'Radio Navigation Equip, Except Airborne' being procured?

The Product Service Code (PSC) '334511' indicates 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing'. This suggests the equipment is related to systems that provide navigation and guidance capabilities, but specifically excludes airborne units. Given the context of 'Missile and Space Systems' and 'NAVSTAR GPS', it likely pertains to ground-based or space-based components of the GPS system, or specialized navigation equipment used in conjunction with missile guidance or space vehicle operations. This could include receivers, transmitters, signal processing units, or other critical hardware that enables precise positioning and timing.

Why was this contract awarded on a sole-source basis?

Sole-source awards are typically justified when only one responsible source is available or capable of meeting the requirement. For a specialized item like advanced navigation equipment for missile and space systems, the justification might stem from proprietary technology held by The Boeing Company, unique manufacturing capabilities, existing integration with current defense platforms, or the need for continuity with a previously developed system. Without access to the specific Justification for Other Than Full and Open Competition (JOFOC) documentation, the precise reasons remain internal to the awarding agency.

How does the $360 million value compare to similar contracts in this niche?

Direct comparison of the $360 million value is difficult without knowing the exact specifications and quantity of the 'Radio Navigation Equip'. However, for major defense contractors like Boeing, contracts of this magnitude are not uncommon for complex systems. The value suggests a significant quantity or high technological sophistication. To benchmark effectively, one would need to identify contracts for similar GPS components, missile guidance hardware, or space navigation systems awarded over the same period, considering factors like contract type, duration, and specific technical requirements.

What are the potential risks associated with a sole-source, fixed-price contract of this size and duration?

The primary risk with a sole-source award is the potential for inflated pricing due to the lack of competition. For a fixed-price contract, the risk lies in the contractor potentially cutting corners on quality or performance if cost overruns occur, or conversely, if the initial price was set too high, the government overpays. The long duration (2005-2015) increases the risk of technological obsolescence or the need for contract modifications if requirements change significantly over time. Contractor performance issues, though less likely with established primes, remain a risk that requires diligent oversight.

What is The Boeing Company's track record with similar defense contracts?

The Boeing Company is one of the largest aerospace and defense contractors globally, with an extensive history of delivering complex systems to the U.S. military and other government agencies. They have a well-established track record in areas such as aircraft manufacturing, satellite systems, and defense electronics, including components related to navigation and communication. While specific performance details for this particular contract are not provided, Boeing generally possesses the technical expertise and infrastructure to handle large-scale, high-value defense procurements. However, like any major contractor, they have faced scrutiny and challenges on various programs over the years.

How has spending on 'Search, Detection, Navigation, Guidance...' systems evolved over time?

Spending on systems categorized under PSC 334511 has generally remained robust, driven by continuous modernization efforts in defense and aerospace. The increasing reliance on GPS and other satellite navigation systems for military operations, alongside advancements in missile technology and space exploration, necessitates ongoing investment. While specific historical spending trends for this exact PSC would require detailed analysis of federal procurement data over multiple years, the overall trajectory indicates sustained demand for sophisticated navigation and guidance technologies, fluctuating with defense budgets and strategic priorities.

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: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3370 E MIRALOMA AVE, ANAHEIM, CA, 92806

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $376,524,009

Exercised Options: $373,341,765

Current Obligation: $359,697,346

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline