Boeing awarded $176M DHS contract for Arizona border surveillance systems

Contract Overview

Contract Amount: $176,018,340 ($176.0M)

Contractor: THE Boeing Company

Awarding Agency: Department of Homeland Security

Start Date: 2008-06-25

End Date: 2011-03-17

Contract Duration: 995 days

Daily Burn Rate: $176.9K/day

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Other

Official Description: ARIZONA DEPLOYMENT TASK ORDER FOR TUCSON-1 AND AJO-1

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85701

State: Arizona Government Spending

Plain-Language Summary

Department of Homeland Security obligated $176.0 million to THE BOEING COMPANY for work described as: ARIZONA DEPLOYMENT TASK ORDER FOR TUCSON-1 AND AJO-1 Key points: 1. Contract value represents a significant investment in border security technology. 2. Sole-source award raises questions about competition and potential cost efficiencies. 3. Performance period spans nearly three years, indicating a substantial project. 4. The contract falls under professional, scientific, and technical services, a broad category. 5. Geographic focus on Arizona highlights a key area of border management concern.

Value Assessment

Rating: fair

The contract's value of $176 million for surveillance systems is substantial. Without specific performance metrics or comparable sole-source contracts for similar systems, a precise value-for-money assessment is challenging. However, the cost-plus incentive fee structure suggests an attempt to align contractor performance with cost objectives, which can be beneficial if managed effectively. Benchmarking against other border surveillance technology procurements would be necessary for a more definitive evaluation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, The Boeing Company, was considered. This approach is typically used when a unique capability is required or when only one source can meet the government's needs. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices or spurred innovation from multiple providers. This raises concerns about whether the government secured the best possible price and solution.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as the competitive pressure to offer the lowest price is absent. It also limits opportunities for other companies to compete for and win government contracts.

Public Impact

The primary beneficiaries are U.S. Customs and Border Protection (CBP) and the Department of Homeland Security (DHS), gaining enhanced surveillance capabilities. The services delivered include the deployment of surveillance systems along the Arizona border. The geographic impact is concentrated in Arizona, a critical region for border security operations. The contract likely involves a workforce of technical specialists, engineers, and support personnel, potentially creating or sustaining jobs in these fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Cost-plus incentive fee contracts can sometimes lead to cost overruns if not closely monitored.
The broad nature of 'All Other Professional, Scientific, and Technical Services' makes it difficult to pinpoint specific deliverables without further detail.
Long performance period without clear interim milestones could obscure progress and accountability.

Positive Signals

The use of an incentive fee structure aims to reward efficient performance and cost control.
Boeing is a major defense contractor with extensive experience in complex systems integration.
The contract addresses a critical national security need for border surveillance.
Deployment in a high-priority area like Arizona suggests strategic importance.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on surveillance and security technology. The market for border security solutions is significant, driven by national security concerns and technological advancements. Companies like Boeing compete in this space by offering integrated systems that combine sensors, data processing, and communication platforms. Comparable spending benchmarks would involve looking at other large-scale surveillance system procurements by federal agencies, particularly those focused on border management or critical infrastructure protection.

Small Business Impact

The data indicates that small business participation was not a stated requirement or outcome for this specific contract (sb: false). As a sole-source award to a large prime contractor, there is a reduced likelihood of direct subcontracting opportunities for small businesses unless Boeing proactively includes them. This contract does not appear to be designed to support the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Homeland Security's contracting and program management offices. The Inspector General for DHS would have jurisdiction to investigate potential fraud, waste, or abuse. Transparency is facilitated through contract databases like FPDS, but detailed performance reports and cost breakdowns are often not publicly available for sole-source, cost-plus contracts.

Related Government Programs

Border Security Technology
Surveillance Systems
Department of Homeland Security Procurements
Aerospace and Defense Contracts
Professional, Scientific, and Technical Services

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns in CPIF contracts
Broad service category definition

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $176.0 million to THE BOEING COMPANY. ARIZONA DEPLOYMENT TASK ORDER FOR TUCSON-1 AND AJO-1

Who is the contractor on this award?

The obligated recipient is THE BOEING COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Customs and Border Protection).

What is the total obligated amount?

The obligated amount is $176.0 million.

What is the period of performance?

Start: 2008-06-25. End: 2011-03-17.

What is Boeing's track record with similar sole-source surveillance contracts for DHS?

Assessing Boeing's track record with similar sole-source surveillance contracts for DHS requires a deep dive into historical contract data. Generally, Boeing is a large, established defense contractor with significant experience in complex systems integration, including surveillance and command and control systems. However, sole-source awards, by their nature, limit public visibility into competitive performance. To evaluate Boeing's specific performance on comparable sole-source contracts, one would need to analyze past contract awards, modifications, performance reviews (if available), and any associated cost variances or overruns. Without access to proprietary performance data or specific contract histories, it's difficult to provide a definitive assessment beyond their general reputation as a major aerospace and defense provider.

How does the $176 million contract value compare to similar border surveillance technology procurements?

Comparing the $176 million contract value for Arizona border surveillance systems requires identifying comparable procurements. The 'All Other Professional, Scientific, and Technical Services' category is very broad, making direct comparisons challenging without knowing the specific technologies deployed. However, large-scale border security technology procurements, such as sensor networks, aerial surveillance platforms, and integrated command centers, can easily run into hundreds of millions of dollars. For instance, other DHS initiatives or Department of Defense contracts for similar capabilities might offer benchmarks. The sole-source nature of this award, however, complicates direct value comparisons, as competitive bids often drive prices down. A comprehensive benchmark would necessitate analyzing contracts with similar scope, technology, and duration, ideally those awarded through full and open competition.

What are the primary risks associated with a sole-source award for this type of technology?

The primary risks associated with a sole-source award for surveillance technology include reduced price competition, potentially leading to higher costs for the government and taxpayers. Without multiple bidders, there's less incentive for the contractor to offer the most cost-effective solution. There's also a risk of vendor lock-in, where the government becomes dependent on a single provider, making future transitions or upgrades more difficult and expensive. Furthermore, the lack of competitive pressure might reduce the urgency for innovation or the adoption of the latest technological advancements. Ensuring adequate oversight and robust contract management becomes even more critical to mitigate these risks and ensure the government receives fair value and optimal performance.

How effective are cost-plus incentive fee (CPIF) contracts in managing large-scale technology deployments like this?

Cost-Plus Incentive Fee (CPIF) contracts are designed to incentivize contractors to control costs and meet performance targets by sharing in cost savings or overruns based on pre-negotiated formulas. For large-scale technology deployments, CPIF can be effective if the target cost, incentive sharing ratio, and performance metrics are well-defined and realistic. They aim to balance the government's need for flexibility in evolving technological projects with the contractor's need for profit. However, the effectiveness hinges on the government's ability to accurately estimate costs, establish appropriate performance goals, and diligently monitor progress and expenditures. Poorly defined targets or inadequate oversight can undermine the incentive structure, leading to cost overruns or suboptimal performance, even with the CPIF mechanism.

What is the historical spending trend for border surveillance technology by DHS?

Historical spending trends for border surveillance technology by DHS have generally shown a consistent increase over the past two decades, driven by evolving threats, policy priorities, and technological advancements. Agencies within DHS, such as U.S. Customs and Border Protection (CBP), have consistently invested in a range of technologies, including aerial surveillance, ground sensors, unmanned aerial systems (UAS), and integrated command and control systems. Funding often fluctuates based on specific initiatives, such as the deployment of new technologies or the expansion of surveillance coverage in high-traffic areas. While specific figures vary annually, the overall trajectory indicates a sustained commitment to leveraging technology for border security operations, with significant portions allocated to major system procurements and deployments.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

Product/Service Code: INSTALLATION OF EQUIPMENT › INSTALLATION OF EQUIPMENT

Contractor Details

Address: 5301 BOLSA AVE, HUNTINGTON BEACH, CA, 92647

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $184,356,910

Exercised Options: $179,688,378

Current Obligation: $176,018,340

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HSBP1006D01353

IDV Type: IDC

Timeline