DoD's $57.9M Boeing Contract for Wideband Global Satellite Communications Faces Oversight Concerns
Contract Overview
Contract Amount: $57,947,972 ($57.9M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2019-12-19
End Date: 2026-12-31
Contract Duration: 2,569 days
Daily Burn Rate: $22.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: IT
Official Description: WIDEBAND GLOBAL SATELLITE-COMMUNICATIONS ORBITAL OPERATIONS, LOGISTICS, AND RESILIENCY
Place of Performance
Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80916
State: Colorado Government Spending
Plain-Language Summary
Department of Defense obligated $57.9 million to THE BOEING COMPANY for work described as: WIDEBAND GLOBAL SATELLITE-COMMUNICATIONS ORBITAL OPERATIONS, LOGISTICS, AND RESILIENCY Key points: 1. Contract awarded to a single, large incumbent provider, raising questions about competition. 2. Fixed Price Incentive contract type suggests potential for cost overruns if not managed closely. 3. Long duration (2019-2026) indicates a significant, ongoing commitment of taxpayer funds. 4. Lack of small business participation noted, potentially limiting broader economic impact. 5. Engineering Services sector is critical for complex defense systems like satellite communications.
Value Assessment
Rating: questionable
The contract's value of $57.9M over its duration appears substantial for engineering services. Benchmarking against similar satellite operations and logistics contracts is difficult without more granular data, but the lack of competition raises concerns about whether this price reflects optimal value.
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 the government compared to a competitive environment.
Taxpayer Impact: The sole-source nature of this contract means taxpayers may be paying a premium, as competitive pressures that typically drive down costs are absent.
Public Impact
Ensures critical satellite communication capabilities for the Department of Defense. Supports national security operations by maintaining orbital assets and logistics. Long-term commitment impacts budget allocation for defense spending. Limited small business involvement means fewer opportunities for smaller enterprises in this sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price discovery.
- Lack of small business participation.
- Fixed Price Incentive contract type can lead to cost overruns.
- Long contract duration requires sustained oversight.
Positive Signals
- Provides essential satellite communication services.
- Awarded to a known, experienced contractor.
- Contract duration aligns with long-term defense needs.
Sector Analysis
This contract falls within the Engineering Services sector, specifically supporting complex satellite communications systems. Spending in this area is crucial for national defense, but often involves high costs due to specialized expertise and technology required.
Small Business Impact
The contract data indicates no small business participation (sb: false). This suggests that opportunities for small businesses within this large, sole-source contract are either non-existent or were not pursued, potentially missing out on innovation and economic benefits.
Oversight & Accountability
The long duration and sole-source nature of this contract necessitate robust oversight from the Department of the Air Force to ensure cost control, performance, and adherence to contract terms. Regular reviews are critical to mitigate risks associated with limited competition.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award limits competition.
- Potential for cost overruns with FPI contract.
- Lack of small business participation.
- Long contract duration requires sustained oversight.
- Dependency on a single contractor for critical infrastructure.
Tags
engineering-services, department-of-defense, co, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $57.9 million to THE BOEING COMPANY. WIDEBAND GLOBAL SATELLITE-COMMUNICATIONS ORBITAL OPERATIONS, LOGISTICS, AND RESILIENCY
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 $57.9 million.
What is the period of performance?
Start: 2019-12-19. End: 2026-12-31.
What specific factors justified the sole-source award for these critical satellite communication services, and were alternatives explored?
Justification for sole-source awards typically involves unique capabilities, critical national security needs, or lack of viable alternatives. For Wideband Global Satellite Communications, the government might argue that Boeing possesses unique expertise or infrastructure essential for maintaining orbital operations, logistics, and resiliency, making competition impractical or detrimental to mission success. However, a thorough review should confirm that no other qualified vendors could meet these specific, demanding requirements.
How is the government managing the risks associated with the Fixed Price Incentive (FPI) contract type to prevent cost overruns?
The government manages FPI risks through stringent performance metrics, clear target costs, and defined incentive/disincentive clauses. Regular audits, progress reviews, and close monitoring of cost drivers are essential. The Air Force must actively engage with Boeing to ensure efficient operations and cost control, holding the contractor accountable for exceeding agreed-upon targets while rewarding performance that stays within or below projections.
What is the long-term strategy for ensuring competitive sourcing or technological advancement in this satellite communication domain?
The long-term strategy should involve market research to identify potential future competitors or disruptive technologies. The government could consider breaking down future requirements into smaller, more competitive segments, fostering innovation through research and development contracts, or encouraging partnerships that build capacity among smaller firms. Proactive planning is key to avoid perpetual sole-source reliance and ensure cost-effectiveness and access to cutting-edge solutions.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
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: $99,707,901
Exercised Options: $74,794,160
Current Obligation: $57,947,972
Subaward Activity
Number of Subawards: 2
Total Subaward Amount: $68,799
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2019-12-19
Current End Date: 2026-12-31
Potential End Date: 2026-12-31 00:00:00
Last Modified: 2025-12-15
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