Boeing awarded $19.5M for GPS IIA sustainment, a sole-source engineering services contract

Contract Overview

Contract Amount: $19,499,870 ($19.5M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2010-04-01

End Date: 2016-12-31

Contract Duration: 2,466 days

Daily Burn Rate: $7.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE REDETERMINATION

Sector: Defense

Official Description: GPS IIA SUSTAINMENT

Place of Performance

Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80916

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $19.5 million to THE BOEING COMPANY for work described as: GPS IIA SUSTAINMENT Key points: 1. Contract awarded to a single, established provider, raising questions about competitive pricing. 2. Engineering services are critical for maintaining complex satellite systems. 3. Long contract duration suggests a need for sustained support. 4. Fixed Price Redetermination pricing structure may allow for cost adjustments. 5. Lack of competition indicates potential for higher costs compared to a bid environment. 6. Contractor has a significant role in defense sector sustainment.

Value Assessment

Rating: fair

The contract value of $19.5 million for engineering services over approximately 6.8 years appears moderate for satellite sustainment. However, without a competitive bidding process, it is difficult to benchmark the value for money effectively. The Fixed Price Redetermination (FPR) contract type suggests that initial pricing was estimated and subject to adjustment, which can introduce uncertainty in the final cost. Comparing this to similar sustainment contracts for other satellite programs would be necessary for a more robust assessment of pricing efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, The Boeing Company, was solicited. This approach is typically used when a specific capability is unique to a single provider or when urgency precludes a full competition. The lack of multiple bidders means there was no direct price competition, potentially leading to less favorable pricing for the government than if multiple firms had vied for the contract.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to drive down costs, potentially resulting in higher expenditures for taxpayers compared to competitively sourced contracts.

Public Impact

The primary beneficiaries are the Department of Defense and other government entities relying on the Global Positioning System (GPS) IIA satellites for navigation and timing. The services delivered ensure the continued operational readiness and reliability of a critical national asset. The geographic impact is global, as GPS signals are accessible worldwide. Workforce implications include the need for specialized engineering and technical expertise within The Boeing Company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
FPR contract type introduces uncertainty regarding final cost to the government.
Long duration of the contract may not reflect current market efficiencies.
Lack of transparency in the sole-source justification process.

Positive Signals

Contract awarded to a known entity with established expertise in GPS systems.
Engineering services are essential for maintaining critical national infrastructure.
Sustained support ensures reliability of a vital defense and civilian asset.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on satellite sustainment and engineering services. The market for satellite operations and maintenance is characterized by high barriers to entry due to specialized knowledge and technology. Spending in this area is crucial for national security and critical infrastructure. Comparable spending benchmarks would involve analyzing other long-term sustainment contracts for satellite constellations, both government and commercial.

Small Business Impact

This contract does not appear to have a small business set-aside component, as it was awarded to The Boeing Company, a large prime contractor. There is no explicit information regarding subcontracting plans for small businesses within this specific award notice. The focus on a sole-source award to a major defense contractor suggests that subcontracting opportunities for small businesses may be limited or managed through broader corporate agreements rather than this specific contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), responsible for ensuring compliance with contract terms and performance standards. The FPR pricing structure necessitates careful monitoring and auditing by the government to ensure the redetermined price is fair and reasonable. Transparency is limited due to the sole-source nature, but contract modifications and performance reports would be subject to internal government review and potentially Inspector General oversight if performance issues arise.

Related Government Programs

GPS III Program
Space-Based PNT Services
Satellite Operations and Maintenance
Defense Engineering Services
Aerospace Sustainment Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns (FPR)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.5 million to THE BOEING COMPANY. GPS IIA SUSTAINMENT

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 $19.5 million.

What is the period of performance?

Start: 2010-04-01. End: 2016-12-31.

What is the historical spending pattern for GPS IIA sustainment with The Boeing Company?

Detailed historical spending data for this specific GPS IIA sustainment contract with The Boeing Company is not fully available in the provided snippet. The contract value is listed as $19,499,870.38, with a duration from April 1, 2010, to December 31, 2016, totaling 2466 days (approximately 6.8 years). This suggests an average annual expenditure of roughly $2.87 million. To understand the full historical pattern, one would need to examine prior contracts for GPS IIA sustainment, including any modifications, task orders, and actual expenditures versus awarded amounts over the system's lifecycle. Analyzing trends in spending, particularly in relation to contract type and competition, would reveal if costs have increased or decreased over time and whether the FPR mechanism has led to significant price adjustments.

How does the pricing of this contract compare to similar satellite sustainment contracts?

Direct comparison of pricing for this $19.5 million GPS IIA sustainment contract is challenging due to its sole-source nature and the Fixed Price Redetermination (FPR) contract type. A competitive environment typically yields lower prices as contractors vie for the award. The FPR structure means the final price is subject to negotiation and adjustment, making a straightforward benchmark difficult. To assess value, one would need to compare the per-unit cost of sustainment (e.g., cost per satellite year) against similar contracts for other satellite systems (e.g., other GPS segments, military communication satellites, or weather satellites) that were competitively procured. Without such comparable data, it's difficult to definitively state if the pricing is optimal or if taxpayers received fair value.

What are the primary risks associated with this sole-source sustainment contract?

The primary risk associated with this sole-source contract is the potential for inflated costs due to the lack of competitive pressure. The government may not be achieving the best possible price for the engineering services required. Another risk is vendor lock-in; as Boeing is the sole provider, the government may become dependent on their services and pricing, even if market alternatives emerge. Furthermore, the FPR contract type introduces risk related to cost overruns if the initial estimates are inaccurate and the redetermination process is not rigorously managed. Finally, a sole-source award can sometimes indicate a lack of robust market research or a failure to foster competition in critical technology areas.

How effective is The Boeing Company in delivering sustainment services for critical defense systems?

The Boeing Company has a long-standing and extensive track record in providing sustainment and support services for various critical defense systems, including aerospace and aviation platforms. Their involvement in GPS sustainment suggests a recognized capability and established relationship with the Department of Defense. Effectiveness is typically measured through performance metrics outlined in the contract, such as uptime, response times, and successful resolution of technical issues. While specific performance data for this GPS IIA contract isn't provided, Boeing's continued role in supporting major defense programs indicates a generally accepted level of effectiveness. However, ongoing performance reviews and contract compliance monitoring are essential to ensure continued mission success.

What is the strategic importance of GPS IIA sustainment within the broader GPS modernization effort?

The GPS IIA satellites represent an older generation of the Global Positioning System. While newer constellations like GPS III are being deployed, the IIA satellites continue to provide essential navigation, timing, and positioning services. Their sustainment is strategically important because it ensures continuity of service during the transition period to the modernized system. Maintaining the operational readiness of the IIA constellation prevents gaps in coverage and ensures that military and civilian users have reliable access to PNT (Positioning, Navigation, and Timing) data. Therefore, this contract, though for an aging system, is critical for maintaining national security and supporting global operations until the full operational capability of newer systems is achieved.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - GENERAL

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIXED PRICE REDETERMINATION (A)

Evaluated Preference: NONE

Contractor Details

Address: 320 WOOTEN RD, COLORADO SPRINGS, CO, 80916

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $39,537,791

Exercised Options: $19,529,179

Current Obligation: $19,499,870

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline