DoD Awards Boeing $45.7M WGS Satellite Operations Contract; R&D Sector
Contract Overview
Contract Amount: $45,728,485 ($45.7M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2014-12-31
End Date: 2019-12-31
Contract Duration: 1,826 days
Daily Burn Rate: $25.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: R&D
Official Description: IGF::OT::IGF AWARD OF WIDEBAND GLOBAL SATCOM ON-ORBIT OPERATIONS AND LOGISITCS SUSTAINMENT SUPPORT CONTRACT
Place of Performance
Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245
Plain-Language Summary
Department of Defense obligated $45.7 million to THE BOEING COMPANY for work described as: IGF::OT::IGF AWARD OF WIDEBAND GLOBAL SATCOM ON-ORBIT OPERATIONS AND LOGISITCS SUSTAINMENT SUPPORT CONTRACT Key points: 1. Contract awarded to The Boeing Company for Wideband Global SATCOM (WGS) on-orbit operations and logistics. 2. The contract falls under the Research and Development in Physical, Engineering, and Life Sciences sector. 3. Awarded as a definitive contract with a fixed-price incentive pricing structure. 4. Significant duration of 1826 days (5 years) indicates long-term support needs.
Value Assessment
Rating: questionable
The contract value of $45.7M over 5 years averages approximately $9.1M annually. Benchmarking against similar large-scale satellite operations and logistics contracts is difficult without more specific service details, but the lack of competition raises concerns about potential overpricing.
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 taxpayers as there was no competitive pressure to drive down prices.
Taxpayer Impact: The lack of competition for a substantial contract like this raises concerns about taxpayer value and whether a more competitive process could have secured better pricing or terms.
Public Impact
Ensures continued operation and sustainment of critical Wideband Global SATCOM satellites, vital for military communications. Supports advanced research and development in satellite technology and operations. Potential for long-term reliance on a single provider for essential space-based communication infrastructure.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Sole-source award
- Potential for inflated costs
Positive Signals
- Ensures critical satellite operations
- Long-term sustainment support
Sector Analysis
This contract is categorized under Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology) sector, specifically NAICS code 541712. Spending in this sector often involves complex, high-value projects with long development cycles.
Small Business Impact
The contract was awarded to The Boeing Company and there is no indication of small business participation or subcontracting in the provided data. This suggests a lack of opportunity for small businesses in this specific award.
Oversight & Accountability
The award was made by the Department of the Air Force, a component of the Department of Defense. Oversight would typically involve program management offices within the Air Force responsible for satellite acquisition and sustainment, ensuring contract compliance and performance.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competition
- Sole-source award
- Potential for cost overruns
- Limited transparency in pricing
- Risk of vendor lock-in
Tags
research-and-development-in-the-physical, department-of-defense, ca, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $45.7 million to THE BOEING COMPANY. IGF::OT::IGF AWARD OF WIDEBAND GLOBAL SATCOM ON-ORBIT OPERATIONS AND LOGISITCS SUSTAINMENT SUPPORT 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 $45.7 million.
What is the period of performance?
Start: 2014-12-31. End: 2019-12-31.
What specific factors justified the sole-source award for WGS operations and logistics, and were alternatives explored?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one contractor can fulfill the requirement. For WGS operations, this could relate to existing infrastructure, specialized knowledge of the satellite systems, or integration challenges. A thorough review would be needed to confirm if alternatives were considered and why they were deemed unsuitable, impacting the potential for competitive pricing.
How does the fixed-price incentive structure mitigate risk for the government compared to other contract types in this R&D context?
A fixed-price incentive (FPI) contract aims to share cost risks between the government and the contractor. It sets a target cost and target profit, with a ceiling price. If costs are below the target, both parties share savings; if above, they share overruns up to the ceiling. This structure incentivizes the contractor to control costs while providing some flexibility for unforeseen R&D challenges, potentially offering better value than firm-fixed-price if R&D uncertainties are high.
What is the long-term strategic implication of awarding a 5-year sole-source contract for critical satellite operations?
A long-term sole-source award for critical infrastructure like WGS can create vendor lock-in and reduce future competition, potentially leading to higher sustainment costs over time. It also consolidates essential capabilities with one provider, which could pose a risk if that provider faces financial or operational difficulties. Strategic planning should ideally involve pathways for future competition or diversification of providers to ensure long-term cost-effectiveness and resilience.
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
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: FA882315R0002
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
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: $75,669,373
Exercised Options: $45,796,470
Current Obligation: $45,728,485
Actual Outlays: $3,248,318
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2014-12-31
Current End Date: 2019-12-31
Potential End Date: 2019-12-31 00:00:00
Last Modified: 2021-09-17
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