Boeing Awarded $18.76 Billion for Ballistic Missile Defense Systems Development
Contract Overview
Contract Amount: $18,762,686,627 ($18.8B)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2000-12-22
End Date: 2015-12-31
Contract Duration: 5,487 days
Daily Burn Rate: $3.4M/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Official Description: 200112!000108!9700!ZD60 !BALLISTIC MISSILE DEFENSE ORG. !HQ000601C0001 !A!N!*!N! !20001222!20080930!848025649!848025649!009256819!N!THE BOEING COMPANY !3370 E MIRALOMA AVE !ANAHEIM !CA!92806!37000!089!01!HUNTSVILLE !MADISON !ALABAMA !+000383571022!N!N!000000000000!AD93!RDTE/OTHER DEFENSE-ADV TECH DEV !S1 !SERVICES !1CAA!BALLISTIC MISSILE DEFENSE SYS !541710!*!*!3! ! ! !*!*!*!B!*!*!A! !A !U!R!2!001!B! !Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001!
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35824
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $18.76 billion to THE BOEING COMPANY for work described as: 200112!000108!9700!ZD60 !BALLISTIC MISSILE DEFENSE ORG. !HQ000601C0001 !A!N!*!N! !20001222!20080930!848025649!848025649!009256819!N!THE BOEING COMPANY !3370 E MIRALOMA AVE !ANAHEIM !CA!92806!37000!089!01!HUNTSVILLE !MADISON !ALABAMA !+000383571022!N!N!000000000000!AD93!RDTE/OTHER… Key points: 1. Significant investment in advanced defense technology. 2. Sole contractor for a critical national security program. 3. Long-term contract duration raises potential for cost overruns. 4. Focus on R&D suggests innovation but also inherent risk.
Value Assessment
Rating: questionable
The contract value of $18.76 billion over its life is substantial. Without specific comparable contracts for similar advanced missile defense systems, assessing its pricing against the market is difficult. The Cost Plus Award Fee structure allows for flexibility but can lead to higher costs if not managed tightly.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is positive for price discovery. However, the nature of advanced defense systems often leads to a limited number of qualified bidders in subsequent phases or modifications.
Taxpayer Impact: Taxpayer funds are directed towards critical national security infrastructure, aiming to enhance defense capabilities. The long duration and cost-plus nature warrant close monitoring to ensure value for money.
Public Impact
Enhances national security through advanced missile defense. Supports high-tech jobs in the aerospace and defense sector. Potential for technological advancements with dual-use applications. Long-term commitment of resources to a single program.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (15+ years)
- Cost Plus Award Fee structure
- Sole contractor for critical system
- High contract value
Positive Signals
- Full and open competition initially
- Focus on advanced R&D
- Supports national security objectives
Sector Analysis
This contract falls within the Research and Development sector, specifically for advanced defense technologies. Spending in this area is crucial for maintaining a technological edge but often involves higher risk and less predictable outcomes compared to mature product procurements.
Small Business Impact
While the prime contractor is The Boeing Company, a large corporation, there is no specific information provided regarding subcontracting opportunities for small businesses on this particular contract. Defense contracts of this magnitude often involve extensive supply chains where small businesses can play a role.
Oversight & Accountability
The Department of Defense, through agencies like the Defense Contract Management Agency, is responsible for overseeing this contract. The Cost Plus Award Fee structure necessitates robust oversight to ensure performance targets are met and costs are controlled effectively.
Related Government Programs
- Research and Development in the Social Sciences and Humanities
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- High contract value
- Long contract duration
- Cost Plus Award Fee structure
- Sole source potential for future modifications
- Complexity of technology
Tags
research-and-development-in-the-social-s, department-of-defense, al, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $18.76 billion to THE BOEING COMPANY. 200112!000108!9700!ZD60 !BALLISTIC MISSILE DEFENSE ORG. !HQ000601C0001 !A!N!*!N! !20001222!20080930!848025649!848025649!009256819!N!THE BOEING COMPANY !3370 E MIRALOMA AVE !ANAHEIM !CA!92806!37000!089!01!HUNTSVILLE !MADISON !ALABAMA !+000383571022!N!N!000000000000!AD93!RDTE/OTHER DEFENSE-ADV TECH DEV !S1 !SERVICES !1CAA!BALLISTIC MISSILE DEFENSE SYS !541710!*!*!3! ! ! !*!*!*!B!*!*!A! !A !U!R!2!001!B! !Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001!
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 $18.76 billion.
What is the period of performance?
Start: 2000-12-22. End: 2015-12-31.
What specific performance metrics are tied to the award fee structure, and how are they objectively measured to ensure fair compensation and contractor motivation?
The award fee structure is designed to incentivize contractor performance beyond minimum requirements. Specific metrics typically relate to technical achievement, schedule adherence, and cost control. Objective measurement involves rigorous testing, independent evaluations, and comparison against pre-defined milestones. The effectiveness hinges on the clarity and measurability of these criteria, ensuring that bonuses are earned for genuine value addition rather than simply meeting baseline expectations.
Given the long duration and complexity of ballistic missile defense systems, what are the primary technical risks, and how is the government mitigating them?
Primary technical risks include evolving threat landscapes requiring system adaptability, integration challenges between complex subsystems, and the inherent uncertainties in developing cutting-edge technologies. Mitigation strategies involve phased development, rigorous testing and validation at multiple stages, incorporating modular designs for easier upgrades, and maintaining strong government technical oversight and independent research to validate contractor progress and identify potential issues early.
How does the government ensure that the significant investment in this R&D contract translates into effective and sustainable long-term ballistic missile defense capabilities?
Effectiveness is ensured through continuous testing, operational evaluations, and threat-based requirements refinement. Sustainability is addressed by building in upgrade paths, fostering competition for future technology insertions, and managing the total lifecycle cost. The government also relies on independent technical reviews and strategic planning to adapt the system to future needs, ensuring the investment yields enduring strategic advantages.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Social Sciences and Humanities
Product/Service Code: GUIDED MISSLES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 4
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 499 BOEING BLVD SW, HUNTSVILLE, AL, 35824
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2000-12-22
Current End Date: 2015-12-31
Potential End Date: 2015-12-31 00:00:00
Last Modified: 2024-07-02
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