DoD Awards Boeing $3.13B for WGS Block II Follow On Satellite Communications
Contract Overview
Contract Amount: $3,127,786,036 ($3.1B)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2010-08-19
End Date: 2028-09-30
Contract Duration: 6,617 days
Daily Burn Rate: $472.7K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: WGS BLOCK II FOLLOW ON
Place of Performance
Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245
Plain-Language Summary
Department of Defense obligated $3.13 billion to THE BOEING COMPANY for work described as: WGS BLOCK II FOLLOW ON Key points: 1. Significant contract value awarded to a single, large prime contractor. 2. Sole-source award raises questions about price discovery and competition. 3. Long contract duration (2010-2028) suggests a critical, ongoing program. 4. Focus on satellite communications equipment manufacturing within the defense sector.
Value Assessment
Rating: questionable
The contract value is substantial, but without competitive bidding, it's difficult to assess if the pricing is optimal. Benchmarking against similar sole-source satellite procurements would be necessary.
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 leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition on this large contract likely results in a higher cost to taxpayers than if it had been competitively bid.
Public Impact
Ensures continued operation and enhancement of the Wideband Global SATCOM (WGS) system, crucial for military communications. Supports advanced satellite technology development and manufacturing. Potential for long-term reliance on a single provider for critical communication infrastructure.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- High contract value
- Long contract duration
Positive Signals
- Critical national security program
- Award to established prime contractor
Sector Analysis
This contract falls within the Information Technology sector, specifically focusing on the manufacturing of wireless communications equipment for defense purposes. Spending benchmarks for similar large-scale satellite procurements are typically in the billions.
Small Business Impact
The contract is awarded to a large prime contractor, The Boeing Company, and there is no indication of significant subcontracting to small businesses in the provided data.
Oversight & Accountability
The long duration and sole-source nature of this contract warrant close oversight to ensure cost control and performance. Regular reviews of program milestones and expenditures are essential.
Related Government Programs
- Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award limits competitive pricing.
- High contract value increases financial risk.
- Long contract duration may lead to scope creep or changing requirements.
- Potential for vendor lock-in.
- Lack of transparency in price negotiation.
Tags
radio-and-television-broadcasting-and-wi, department-of-defense, ca, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $3.13 billion to THE BOEING COMPANY. WGS BLOCK II FOLLOW ON
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 $3.13 billion.
What is the period of performance?
Start: 2010-08-19. End: 2028-09-30.
What is the justification for the sole-source award, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities or critical national security needs that only one contractor can meet. Agencies are required to conduct market research and negotiate pricing to ensure it is fair and reasonable, often through detailed cost analysis and comparison with historical data or industry benchmarks, even without direct competition.
What are the risks associated with a sole-source contract of this magnitude and duration?
Risks include potential cost overruns due to lack of competitive pressure, vendor lock-in, reduced innovation, and a lack of flexibility if requirements change. The government may also face challenges in holding the contractor accountable for performance if alternatives are not readily available.
How does this contract contribute to the overall effectiveness of the Department of Defense's communication capabilities?
This contract is vital for maintaining and upgrading the Wideband Global SATCOM (WGS) system, which provides essential wideband satellite communications for U.S. military forces globally. Its effectiveness directly impacts command and control, intelligence, surveillance, and reconnaissance missions.
Industry Classification
NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
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: 900 N SEPULVEDA BLVD, EL SEGUNDO, CA, 90245
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $3,155,242,455
Exercised Options: $3,142,756,123
Current Obligation: $3,127,786,036
Actual Outlays: $16,091,655
Subaward Activity
Number of Subawards: 823
Total Subaward Amount: $1,278,572,147
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2010-08-19
Current End Date: 2028-09-30
Potential End Date: 2028-09-30 00:00:00
Last Modified: 2025-12-15
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