DoD Awards Boeing $33.3M for R&D, Raising Questions on Value and Competition
Contract Overview
Contract Amount: $33,329,531 ($33.3M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2017-05-12
End Date: 2020-10-30
Contract Duration: 1,267 days
Daily Burn Rate: $26.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 17
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: IGF::OT::IGF R&D - DISCRIMINATING SEEKER
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35824
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $33.3 million to THE BOEING COMPANY for work described as: IGF::OT::IGF R&D - DISCRIMINATING SEEKER Key points: 1. Significant contract awarded to a single large vendor, raising questions about competitive pricing. 2. The R&D sector is critical but often complex, making value assessment challenging. 3. Potential for cost overruns exists given the Cost Plus Fixed Fee contract type. 4. Limited small business participation is noted.
Value Assessment
Rating: questionable
The $33.3 million award to Boeing for R&D services is substantial. Without detailed cost breakdowns and comparisons to similar R&D contracts, assessing its value is difficult. The Cost Plus Fixed Fee structure can incentivize cost escalation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is positive. However, the specific details of the bidding process and the number of bidders are not provided, making it hard to gauge the effectiveness of price discovery.
Taxpayer Impact: The ultimate taxpayer impact depends on the successful delivery of R&D outcomes and whether the price paid reflects true market value.
Public Impact
Taxpayers are funding advanced research and development, potentially leading to future technological advancements. The contract supports a major defense contractor, contributing to the aerospace and defense industrial base. The long duration of the contract (over 3 years) suggests a complex and ongoing research effort.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type can lead to higher costs.
- Lack of detailed pricing data makes value assessment difficult.
- Limited small business involvement.
Positive Signals
- Awarded under full and open competition.
- Supports critical R&D for the Department of Defense.
Sector Analysis
This contract falls within the Research and Development sector, specifically for physical, engineering, and life sciences. Spending in this area is crucial for innovation but can be prone to cost overruns and challenges in defining clear deliverables.
Small Business Impact
The contract data indicates no small business participation (ss: false, sb: false). This suggests that the prime contractor, Boeing, is a large business, and opportunities for small businesses in subcontracting roles are not explicitly detailed or may be limited.
Oversight & Accountability
The Department of Defense, through its contracting agencies like DCMA, is responsible for overseeing this contract. However, the provided data does not offer insights into specific oversight mechanisms or accountability measures in place for this particular award.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Cost Plus Fixed Fee contract type.
- Lack of detailed performance metrics.
- No indication of small business subcontracting.
- Limited transparency on competition effectiveness.
- Potential for R&D scope creep.
Tags
research-and-development-in-the-physical, department-of-defense, al, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $33.3 million to THE BOEING COMPANY. IGF::OT::IGF R&D - DISCRIMINATING SEEKER
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 $33.3 million.
What is the period of performance?
Start: 2017-05-12. End: 2020-10-30.
What specific R&D objectives were defined in the contract, and how will their achievement be measured to ensure value for money?
The contract's objectives are not detailed in the provided data. Measuring value for money in R&D is inherently challenging due to the exploratory nature of such work. Success metrics would typically involve milestones, prototypes, successful testing, or the generation of intellectual property, all requiring rigorous technical and programmatic oversight.
Given the Cost Plus Fixed Fee structure, what controls are in place to prevent cost overruns and ensure the contractor remains incentivized to manage expenses efficiently?
Cost Plus Fixed Fee contracts aim to provide the contractor with a guaranteed profit margin. Controls typically include detailed cost accounting standards, regular audits, and defined ceilings. However, the fixed fee component can sometimes reduce the incentive for extreme cost efficiency compared to fixed-price contracts, necessitating strong government oversight.
How effectively did the 'full and open competition' process ensure a competitive price and identify the best technical solution for the government's R&D needs?
While 'full and open competition' is the preferred method, its effectiveness in ensuring a competitive price and optimal solution depends on the specific solicitation, the number and capability of bidders, and the evaluation criteria. Without details on the bidding process, it's difficult to assess how well this competition served its purpose in this instance.
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: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 17
Pricing Type: COST PLUS FIXED FEE (U)
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: $58,582,957
Exercised Options: $58,582,957
Current Obligation: $33,329,531
Actual Outlays: $281,249
Subaward Activity
Number of Subawards: 22
Total Subaward Amount: $6,607,602
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2017-05-12
Current End Date: 2020-10-30
Potential End Date: 2020-10-30 00:00:00
Last Modified: 2024-07-02
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