MDA Awards Boeing $6.47 Billion GMD Contract for Missile Defense Development and Sustainment Through 2025
Contract Overview
Contract Amount: $6,466,627,868 ($6.5B)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2011-12-30
End Date: 2025-12-31
Contract Duration: 5,115 days
Daily Burn Rate: $1.3M/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS INCENTIVE FEE
Sector: R&D
Official Description: THE MISSILE DEFENSE AGENCY (MDA), GROUND-BASED MIDCOURSE DEFENSE (GMD) DEVELOPMENT AND SUSTAINMENT CONTRACT (DSC) THE GMD DSC WORK INCLUDES, BUT IS NOT LIMITED TO: 1) FUTURE DEVELOPMENT; 2) FIELDING; 3) TEST; 4) SYSTEMS ENGINEERING, INTEGRATION AND CONFIGURATION MANAGEMENT; 5) EQUIPMENT MANUFACTURING AND REFURBISHMENT; 6) TRAINING; AND 7) OPERATIONS AND SUSTAINMENT SUPPORT FOR THE GMD WEAPON SYSTEM AND ASSOCIATED SUPPORT FACILITIES.
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35824
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $6.47 billion to THE BOEING COMPANY for work described as: THE MISSILE DEFENSE AGENCY (MDA), GROUND-BASED MIDCOURSE DEFENSE (GMD) DEVELOPMENT AND SUSTAINMENT CONTRACT (DSC) THE GMD DSC WORK INCLUDES, BUT IS NOT LIMITED TO: 1) FUTURE DEVELOPMENT; 2) FIELDING; 3) TEST; 4) SYSTEMS ENGINEERING, INTEGRATION AND CONFIGURATION MANAGEMENT; 5) EQ… Key points: 1. The Ground-Based Midcourse Defense (GMD) Development and Sustainment Contract (DSC) is a significant investment in national security, covering a wide range of activities from future development to operations. 2. The Boeing Company holds this substantial contract, indicating its key role in the nation's missile defense capabilities. 3. The contract's duration extends to December 2025, suggesting a long-term commitment to maintaining and advancing the GMD system. 4. While the contract is awarded under full and open competition, the specialized nature of missile defense may limit the number of capable bidders.
Value Assessment
Rating: good
The contract's cost-plus-incentive-fee structure aims to align contractor performance with government objectives, potentially leading to better value. However, the complexity of missile defense systems can make precise cost benchmarking challenging.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, which is intended to foster competitive pricing. However, the highly specialized nature of GMD technology may mean that only a few companies possess the necessary expertise, potentially impacting the level of price discovery.
Taxpayer Impact: The substantial investment in missile defense aims to protect national security, but the high cost necessitates rigorous oversight to ensure taxpayer funds are used efficiently and effectively.
Public Impact
Enhances national security by strengthening the Ground-Based Midcourse Defense system. Supports advanced research and development in physical and engineering sciences related to missile defense. Ensures the operational readiness and sustainment of critical missile defense infrastructure. Creates high-skilled jobs in the aerospace and defense sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Complexity of GMD system may lead to cost overruns.
- Long-term sustainment costs could be substantial.
- Dependence on a single prime contractor for critical defense capabilities.
Positive Signals
- Awarded under full and open competition.
- Incentive fee structure encourages performance.
- Long contract duration provides stability for development and sustainment.
Sector Analysis
This contract falls within the Research and Development in the Physical, Engineering, and Life Sciences sector, specifically focusing on advanced missile defense systems. Spending in this area is critical for national security and often involves large, long-term investments due to the complexity and evolving threat landscape.
Small Business Impact
The data indicates that small businesses were not directly awarded this prime contract. Opportunities for small businesses likely exist further down the supply chain as subcontractors to The Boeing Company.
Oversight & Accountability
The Missile Defense Agency is responsible for the oversight of this contract. The cost-plus-incentive-fee structure and the contract's duration suggest a need for continuous monitoring of performance, costs, and adherence to technical requirements to ensure accountability.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
- Department of Defense Contracting
- Missile Defense Agency Programs
Risk Flags
- High contract value with long duration.
- Complex and critical national security system.
- Potential for cost overruns in R&D and sustainment.
- Specialized technology may limit future competition.
- Dependence on a single prime contractor.
Tags
research-and-development-in-the-physical, department-of-defense, al, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $6.47 billion to THE BOEING COMPANY. THE MISSILE DEFENSE AGENCY (MDA), GROUND-BASED MIDCOURSE DEFENSE (GMD) DEVELOPMENT AND SUSTAINMENT CONTRACT (DSC) THE GMD DSC WORK INCLUDES, BUT IS NOT LIMITED TO: 1) FUTURE DEVELOPMENT; 2) FIELDING; 3) TEST; 4) SYSTEMS ENGINEERING, INTEGRATION AND CONFIGURATION MANAGEMENT; 5) EQUIPMENT MANUFACTURING AND REFURBISHMENT; 6) TRAINING; AND 7) OPERATIONS AND SUSTAINMENT SUPPORT FOR THE GMD WEAPON SYSTEM AND ASSOCIATED SUPPORT FACILITIES.
Who is the contractor on this award?
The obligated recipient is THE BOEING COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Missile Defense Agency).
What is the total obligated amount?
The obligated amount is $6.47 billion.
What is the period of performance?
Start: 2011-12-30. End: 2025-12-31.
What is the projected return on investment for the GMD DSC in terms of enhanced national security and threat deterrence?
Quantifying the precise return on investment for national security assets like the GMD DSC is inherently challenging. Its value is primarily measured by its effectiveness in deterring missile attacks and protecting against potential threats. The $6.47 billion investment aims to ensure the reliability and advancement of the GMD system, contributing to a stable geopolitical environment and preventing catastrophic outcomes.
What are the primary technical risks associated with the GMD development and sustainment, and how are they being mitigated?
Key technical risks include the complexity of intercepting advanced ballistic missiles, the reliability of the GMD system components under stress, and the pace of technological evolution by potential adversaries. Mitigation strategies likely involve rigorous testing, continuous system upgrades, advanced engineering, and robust systems integration to ensure the GMD remains effective against emerging threats.
How effectively does the cost-plus-incentive-fee structure ensure that the GMD DSC delivers maximum value for taxpayer dollars?
The cost-plus-incentive-fee (CPIF) structure is designed to incentivize The Boeing Company to control costs and meet performance targets. By linking a portion of the contractor's profit to achieving specific cost and performance objectives, the CPIF aims to promote efficiency and value. However, the effectiveness depends on the clarity and attainability of the incentive targets and the rigor of government oversight in monitoring costs and performance.
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: GUIDED MISSLES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: HQ014710R0016
Offers Received: 2
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Address: 499 BOEING BLVD SW, HUNTSVILLE, AL, 35824
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $7,059,592,949
Exercised Options: $6,961,478,290
Current Obligation: $6,466,627,868
Actual Outlays: $159,054,472
Subaward Activity
Number of Subawards: 856
Total Subaward Amount: $2,782,118,544
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2011-12-30
Current End Date: 2025-12-31
Potential End Date: 2025-12-31 00:00:00
Last Modified: 2025-11-13
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