Boeing awarded $80.8M for GPS IIF on-orbit sustainment, a sole-source contract with a 3-year duration

Contract Overview

Contract Amount: $80,854,803 ($80.9M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2022-01-01

End Date: 2025-12-31

Contract Duration: 1,460 days

Daily Burn Rate: $55.4K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: GLOBAL POSITIONING SYSTEM IIF ON ORBIT SUSTAINMENT SUPPORT

Place of Performance

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

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $80.9 million to THE BOEING COMPANY for work described as: GLOBAL POSITIONING SYSTEM IIF ON ORBIT SUSTAINMENT SUPPORT Key points: 1. Contract awarded to a single, established provider, raising questions about competitive pricing. 2. Long-term sustainment contract suggests critical infrastructure reliance on this specific vendor. 3. Fixed-price contract type aims to control costs, but initial pricing needs benchmarking. 4. Performance period extends through late 2025, indicating ongoing operational needs. 5. Lack of competition may limit opportunities for innovation and cost reduction from alternative vendors. 6. Contract value represents a significant investment in maintaining vital satellite capabilities.

Value Assessment

Rating: fair

The contract value of $80.8 million for sustainment services over three years requires careful benchmarking against similar satellite support contracts. Given the sole-source nature, it is difficult to assess if the pricing reflects competitive market rates. The fixed-price structure provides some cost certainty, but without competitive bids, the true value-for-money proposition is less clear. Further analysis would involve comparing the per-unit cost of sustainment activities to industry averages for similar satellite systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the requirement. The lack of competition means that price discovery through market forces was bypassed, potentially leading to higher costs for the government compared to a competed scenario.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without multiple bids, there is less incentive for the contractor to offer the lowest possible price.

Public Impact

The Department of the Air Force benefits from continued operational capability of the Global Positioning System IIF satellites. Services delivered include sustainment support, ensuring the ongoing functionality and reliability of critical space assets. The geographic impact is national, as GPS services are essential for military operations, civilian navigation, and numerous commercial applications. Workforce implications include continued employment for specialized technical personnel within The Boeing Company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential cost savings.
Long-term sustainment contract may indicate vendor lock-in.
Lack of transparency in pricing due to non-competitive nature.

Positive Signals

Fixed-price contract type provides cost predictability.
Award to incumbent contractor likely ensures continuity of essential services.
Contract duration aligns with expected operational needs for GPS IIF.

Sector Analysis

The Global Positioning System (GPS) is a critical space-based navigation system operated by the U.S. Space Force. The sustainment of these satellites is a vital component of national security and civilian infrastructure. The market for satellite operations and sustainment is highly specialized, often dominated by a few large aerospace and defense contractors. This contract fits within the broader defense space sector, specifically focusing on the operational readiness of existing satellite constellations. Comparable spending benchmarks would involve analyzing other long-term sustainment contracts for complex space assets.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss' (small business subcontracting) is also false. This suggests that the prime contractor, The Boeing Company, is not obligated to subcontract a specific portion of the work to small businesses under this award. Consequently, the direct impact on the small business ecosystem for this particular contract is likely minimal, though Boeing's overall subcontracting practices may still involve small businesses on other programs.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures are embedded within the contract's performance work statement and delivery schedules. Transparency is limited due to the sole-source nature, but reporting requirements on sustainment activities and system status are expected. The Inspector General of the Department of Defense may have jurisdiction for audits and investigations if fraud, waste, or abuse is suspected.

Related Government Programs

Global Positioning System (GPS) Operations
Satellite Command and Control
Space Systems Sustainment
Department of Defense Space Programs
Air Force Satellite Operations

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Vendor lock-in risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $80.9 million to THE BOEING COMPANY. GLOBAL POSITIONING SYSTEM IIF ON ORBIT SUSTAINMENT SUPPORT

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 $80.9 million.

What is the period of performance?

Start: 2022-01-01. End: 2025-12-31.

What is the historical spending trend for GPS IIF on-orbit sustainment support, and how does this $80.8M award compare?

Historical spending data for GPS IIF on-orbit sustainment is not directly provided in the abbreviated data. However, the current award of $80.8 million covers a 3-year period (2022-2025). To understand the trend, one would need to examine previous contracts for GPS IIF sustainment, potentially looking at awards from its initial deployment phase through its operational life. If this $80.8M represents a continuation of similar annual spending, it suggests a consistent investment in maintaining this specific satellite generation. Without prior data, it's difficult to definitively state if this award is higher or lower than historical norms, but it indicates a significant, ongoing commitment to the system's longevity.

What specific sustainment activities are covered under this $80.8M contract for GPS IIF?

The contract specifies 'on orbit sustainment support.' While the abbreviated data doesn't detail the exact tasks, this typically encompasses a range of activities crucial for maintaining the operational status of satellites. These can include monitoring satellite health and performance, anomaly detection and resolution, command and control operations, software updates and maintenance, orbit maintenance, and ensuring the payload remains functional. It may also involve ground segment support necessary for communicating with and controlling the satellites. The specific breakdown of costs for each sustainment activity would be detailed in the contract's Performance Work Statement (PWS).

Given this is a sole-source award, what mechanisms are in place to ensure Boeing is not overcharging for GPS IIF sustainment?

While the absence of competition limits direct price negotiation, several mechanisms can help mitigate overcharging. Firstly, the contract is 'firm fixed price,' meaning the price is set and Boeing bears the risk of cost overruns. Secondly, the government likely relies on robust oversight, including technical monitoring of performance and potentially audits of cost data if allowed by the contract terms. Benchmarking against similar sustainment contracts for other satellite systems, even if not directly comparable, can provide some indication of reasonableness. Furthermore, the contract likely includes clauses for termination for convenience, providing the government an exit strategy if the arrangement proves uneconomical or unsatisfactory.

What are the risks associated with relying solely on The Boeing Company for the sustainment of GPS IIF satellites?

The primary risk of a sole-source contract is the potential for inflated costs due to a lack of competitive pressure. Another significant risk is vendor lock-in, where the government becomes heavily dependent on a single provider, making it difficult and costly to switch vendors in the future. This dependency can also reduce the incentive for the contractor to innovate or improve services. Furthermore, if Boeing faces financial difficulties or strategic shifts, it could impact the continuity and quality of sustainment support for these critical GPS assets. The long-term nature of the contract exacerbates these risks.

How does the sustainment of GPS IIF satellites contribute to the overall GPS constellation's effectiveness and longevity?

The GPS IIF satellites are a crucial part of the overall GPS constellation, providing enhanced capabilities such as a more accurate civilian signal and a stronger military signal. Sustainment support ensures that these satellites continue to function correctly, maintaining their orbital positions and transmitting accurate navigation signals. Without effective sustainment, satellites can degrade, fail, or drift off-station, reducing the overall accuracy, availability, and reliability of the GPS system. Therefore, the $80.8M contract directly contributes to the operational effectiveness and extends the useful lifespan of these vital assets, ensuring continued service for military and civilian users.

Industry Classification

NAICS: Information › Other Telecommunications › All Other Telecommunications

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

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: $80,854,803

Exercised Options: $80,854,803

Current Obligation: $80,854,803

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $684,500

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA882322D0001

IDV Type: IDC

Timeline