Boeing awarded $239M for Space Based Space Surveillance sustainment, a sole-source R&D contract
Contract Overview
Contract Amount: $239,495,271 ($239.5M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2015-06-18
End Date: 2027-06-20
Contract Duration: 4,385 days
Daily Burn Rate: $54.6K/day
Competition Type: NOT COMPETED UNDER SAP
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: R&D
Official Description: SPACE BASED SPACE SURVEILLANCE (SBSS) BLOCK 10 SUSTAINMENT CONTRACT
Place of Performance
Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245
Plain-Language Summary
Department of Defense obligated $239.5 million to THE BOEING COMPANY for work described as: SPACE BASED SPACE SURVEILLANCE (SBSS) BLOCK 10 SUSTAINMENT CONTRACT Key points: 1. Contract awarded to a single, established provider, raising questions about competitive pricing. 2. Significant investment in R&D for space surveillance capabilities. 3. Long-term contract duration suggests a need for sustained, specialized support. 4. Performance-based contract type indicates a focus on achieving specific outcomes. 5. Geographic concentration in California for contract performance. 6. Lack of competition may limit opportunities for innovative solutions from other firms.
Value Assessment
Rating: questionable
The contract's value of $239.5 million over its period of performance requires careful scrutiny due to the sole-source nature. Without competitive bidding, it is difficult to benchmark the pricing against market rates or alternative solutions. The cost-plus incentive fee structure aims to control costs by incentivizing the contractor, but the absence of competition means there's less external pressure to achieve the lowest possible price. Further analysis would be needed to compare the proposed costs to similar sustainment contracts for complex defense systems.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed under the Simplified Acquisition Procedures (SAP) and was awarded as a sole-source contract to The Boeing Company. The lack of a competitive process means that other potential vendors were not given the opportunity to bid on this work. This approach is typically justified when only one source possesses the necessary capabilities or when urgency dictates a rapid award. However, it bypasses the price discovery benefits that open competition provides.
Taxpayer Impact: Taxpayers may not be receiving the best possible value for their investment due to the absence of competitive pressure to drive down costs. The government relies on negotiation and oversight to ensure fair pricing in sole-source situations.
Public Impact
The Department of the Air Force benefits from sustained operational capability of the Space Based Space Surveillance (SBSS) system. This contract ensures the continued functioning and maintenance of critical space domain awareness infrastructure. The SBSS system provides vital information for national security and strategic decision-making. Performance is concentrated in California, potentially impacting the local aerospace workforce.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pressure on pricing.
- Long contract duration may not adapt quickly to evolving technological needs.
- Cost-plus contract type can lead to cost overruns if not managed tightly.
Positive Signals
- Award to an established contractor with demonstrated experience in aerospace and defense.
- Performance-based contract structure incentivizes meeting specific objectives.
- Sustainment contract ensures continuity of critical space surveillance capabilities.
Sector Analysis
The Space Based Space Surveillance (SBSS) Block 10 Sustainment Contract falls within the Research and Development sector, specifically focusing on physical and engineering sciences related to space. This contract supports critical national security infrastructure by ensuring the operational readiness of a key space surveillance system. The market for such specialized sustainment services is limited, often dominated by large aerospace and defense contractors with the requisite expertise and security clearances. Comparable spending benchmarks are difficult to establish due to the unique nature of space-based assets and their sustainment requirements.
Small Business Impact
This contract does not appear to have a small business set-aside component, as it was awarded sole-source to The Boeing Company. There is no explicit information provided regarding subcontracting plans for small businesses. The lack of a competitive bidding process and set-aside may limit opportunities for small businesses to participate in this specific contract, although Boeing may engage small businesses in its supply chain.
Oversight & Accountability
Oversight for this contract will be managed by the Department of the Air Force, likely through program management offices and contracting officers. Accountability measures are embedded in the Cost Plus Incentive Fee (CPIF) structure, which links contractor profit to performance against cost targets. Transparency is generally limited for sole-source defense contracts, but reporting requirements and contract performance reviews are standard oversight mechanisms. The Inspector General's office may conduct audits or investigations as deemed necessary.
Related Government Programs
- Space Surveillance Network (SSN)
- National Security Space Launch (NSSL)
- Space Domain Awareness (SDA)
- Satellite Operations
- Aerospace Research and Development
Risk Flags
- Sole-source award
- Lack of competition
- Potential for cost overruns (CPIF structure)
- Long-term contract dependency
Tags
space-surveillance, department-of-defense, department-of-the-air-force, research-and-development, sole-source, definitive-contract, cost-plus-incentive-fee, california, large-business, national-security, aerospace, sustainment
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $239.5 million to THE BOEING COMPANY. SPACE BASED SPACE SURVEILLANCE (SBSS) BLOCK 10 SUSTAINMENT CONTRACT
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 $239.5 million.
What is the period of performance?
Start: 2015-06-18. End: 2027-06-20.
What is the historical spending trend for the Space Based Space Surveillance (SBSS) program?
Historical spending data for the SBSS program prior to this sustainment contract would provide crucial context. Without access to specific historical obligations and expenditures for the SBSS Block 10 system's development and initial operations, it's challenging to establish a baseline. However, sustainment contracts typically follow the initial acquisition phase and represent ongoing operational costs. The $239.5 million awarded here suggests a significant, long-term commitment to maintaining this capability. Understanding previous investments would help assess whether current spending aligns with historical patterns or represents a new phase of increased investment in space surveillance sustainment.
How does the cost-plus incentive fee (CPIF) structure typically perform in R&D contracts?
Cost-plus incentive fee (CPIF) contracts are designed to encourage contractor efficiency by sharing cost savings or overruns between the government and the contractor, based on pre-negotiated targets. In R&D contexts, where outcomes can be uncertain, CPIF aims to balance the need for innovation with cost control. When well-defined targets and metrics are established, CPIF can be effective in motivating contractors to meet performance objectives while managing expenses. However, the effectiveness hinges on the accuracy of initial cost estimates and the clarity of performance incentives. Poorly defined targets or excessive profit potential can still lead to cost growth, especially in complex R&D environments.
What are the specific risks associated with a sole-source award for critical space infrastructure sustainment?
A primary risk of a sole-source award for critical space infrastructure sustainment is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government may pay more than necessary. Another risk is vendor lock-in, where the government becomes overly reliant on a single provider, potentially limiting future flexibility or the adoption of new technologies. Furthermore, a sole-source provider might have less incentive to innovate or improve service quality compared to a contractor facing market competition. Ensuring robust oversight, negotiation, and performance management becomes paramount to mitigate these risks.
What is The Boeing Company's track record with similar space surveillance or satellite sustainment contracts?
The Boeing Company has a long and extensive track record in the aerospace and defense industry, including significant experience with space systems and satellite operations. They have been involved in numerous government contracts related to satellite development, launch services, and sustainment for various defense and intelligence agencies. While specific details on their performance for SBSS sustainment prior to this award are not provided, their general experience suggests a capability to handle complex space-based programs. A deeper dive into their past performance metrics, contract modifications, and any past performance issues on similar programs would offer a more precise assessment.
How does this contract align with broader US government strategies for space domain awareness?
This contract directly aligns with the broader US government's strategic emphasis on maintaining and enhancing Space Domain Awareness (SDA). As space becomes increasingly congested and contested, the ability to track objects, identify threats, and understand the space environment is critical for national security. The SBSS system is a key component of the Space Surveillance Network, providing essential data for these purposes. Sustaining this capability ensures the continuity of operations necessary for strategic decision-making, space traffic management, and the protection of US assets in orbit. The investment reflects a commitment to preserving and advancing these vital functions.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED UNDER SAP
Solicitation Procedures: SIMPLIFIED ACQUISITION
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
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: $383,760,207
Exercised Options: $301,507,735
Current Obligation: $239,495,271
Actual Outlays: $6,155,361
Subaward Activity
Number of Subawards: 148
Total Subaward Amount: $43,277,211
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2015-06-18
Current End Date: 2027-06-20
Potential End Date: 2027-06-20 00:00:00
Last Modified: 2026-01-16
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