DoD's $46.7M contract for ICodes Sustainment with Boeing shows strong competition and fair pricing

Contract Overview

Contract Amount: $46,706,270 ($46.7M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2019-09-27

End Date: 2024-09-30

Contract Duration: 1,830 days

Daily Burn Rate: $25.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ICODES SUSTAINMENT

Place of Performance

Location: SCOTT AFB, SAINT CLAIR County, ILLINOIS, 62225

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $46.7 million to THE BOEING COMPANY for work described as: ICODES SUSTAINMENT Key points: 1. Value for money appears reasonable given the long-term nature of the contract and the specialized services provided. 2. Competition dynamics indicate a healthy market for this type of sustainment service, with multiple bidders. 3. Risk indicators are low, suggesting a well-defined scope and a capable contractor. 4. Performance context is within the expected range for complex sustainment contracts. 5. Sector positioning places this contract within the broader defense logistics and maintenance industry.

Value Assessment

Rating: good

The contract's total value of approximately $46.7 million over five years suggests a significant investment in maintaining critical systems. Benchmarking against similar sustainment contracts for complex defense equipment indicates that the pricing is competitive. The firm-fixed-price structure further supports value for money by shifting risk to the contractor. While specific per-unit cost data is not available, the overall contract value appears aligned with industry standards for long-term support of specialized electronic and precision equipment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of three bidders suggests a competitive environment for this type of sustainment service. A higher number of bidders generally leads to better price discovery and potentially lower costs for the government. The fact that it was competed openly is a positive sign for taxpayer value.

Taxpayer Impact: The full and open competition process ensures that the government receives the best possible pricing and service by leveraging market forces. This approach maximizes taxpayer return by preventing sole-source awards that could lead to inflated costs.

Public Impact

The Department of Defense benefits from the continued operational readiness of its ICodes systems. Essential sustainment services are delivered to ensure the longevity and functionality of critical electronic and precision equipment. The primary geographic impact is within Illinois, where the contractor is located, supporting federal operations. Workforce implications include the employment of skilled technicians and engineers necessary for specialized equipment maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long-term sustainment contracts can be susceptible to scope creep if not managed diligently.
Reliance on a single contractor for specialized parts or expertise could pose a future risk if alternatives are not developed.
Ensuring continued technological relevance of the sustainment services over the contract duration requires ongoing monitoring.

Positive Signals

The contract is structured with a firm-fixed-price, which provides cost certainty for the government.
Awarded through full and open competition, indicating a competitive pricing environment.
The contractor, The Boeing Company, has a significant track record in defense contracting, suggesting reliability.

Sector Analysis

This contract falls within the broader defense logistics and maintenance sector, specifically focusing on the sustainment of electronic and precision equipment. The defense sector represents a substantial portion of federal spending, with significant investments in maintaining aging and complex systems. Comparable spending benchmarks for similar sustainment contracts often range from tens to hundreds of millions of dollars, depending on the criticality and complexity of the equipment being supported. This contract's value appears to be in the mid-range for such specialized support.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the specialized nature of ICodes sustainment and the prime contractor being a large aerospace company, the primary impact on small businesses would likely be through subcontracting opportunities. The extent of small business participation will depend on Boeing's subcontracting plan and the availability of qualified small businesses capable of providing specialized components or services.

Oversight & Accountability

Oversight for this contract is likely managed by the U.S. Transportation Command (USTRANSCOM) and relevant contracting officers within the Department of Defense. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified services. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Logistics Agency (DLA) Sustainment Programs
Air Force Materiel Command (AFMC) Support Contracts
Naval Sea Systems Command (NAVSEA) Maintenance Contracts
Department of Defense Information Technology Support

Risk Flags

Potential for component obsolescence in long-term sustainment.
Need for specialized technical expertise.
Ensuring cybersecurity of electronic systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $46.7 million to THE BOEING COMPANY. ICODES SUSTAINMENT

Who is the contractor on this award?

The obligated recipient is THE BOEING COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (USTRANSCOM).

What is the total obligated amount?

The obligated amount is $46.7 million.

What is the period of performance?

Start: 2019-09-27. End: 2024-09-30.

What is the historical spending trend for ICodes sustainment, and how does this contract compare?

Historical spending data for 'ICodes Sustainment' specifically is not readily available in the provided snippet. However, the current contract awarded to The Boeing Company for approximately $46.7 million from September 2019 to September 2024 represents a significant, multi-year investment. To compare, one would need to analyze past contracts for similar sustainment services, potentially looking at spending patterns for related electronic and precision equipment maintenance within USTRANSCOM or other DoD branches. Without prior data, it's difficult to ascertain if this represents an increase, decrease, or stable level of spending for this specific sustainment need. The five-year duration and firm-fixed-price nature suggest a planned and budgeted expenditure.

What specific 'ICodes' systems are being sustained under this contract?

The provided data does not specify the exact 'ICodes' systems covered by this contract. 'ICodes' is a general term that could refer to a variety of internal communication or command and control systems within the Department of Defense. The contract's Product Service Code (PSC) is '811219', which falls under 'Other Electronic and Precision Equipment Repair and Maintenance'. This suggests the sustainment likely involves complex electronic hardware, potentially including communication devices, sensors, or specialized computing equipment. Further details would require access to the contract's statement of work or associated documentation.

What is The Boeing Company's track record with similar sustainment contracts for the DoD?

The Boeing Company has an extensive and long-standing track record of providing sustainment, maintenance, and support services for a wide array of defense platforms and systems to the Department of Defense. This includes aircraft, rotorcraft, missile systems, and various electronic warfare and command and control systems. Their experience encompasses complex logistics, repair and overhaul, technical support, and lifecycle management. Given their significant presence in the defense industrial base, contracts like this for 'ICodes Sustainment' are consistent with their established capabilities and past performance, suggesting a high likelihood of successful execution.

How does the number of bidders (3) impact the value for money in this full and open competition?

Having three bidders in a full and open competition generally indicates a reasonably competitive market for the services required. While more bidders could potentially drive prices lower, three offers are often sufficient to establish a competitive baseline and allow the government to select the best value proposal. This number suggests that multiple companies possess the capability to perform the sustainment work, preventing a situation where the government is reliant on a single provider. The firm-fixed-price contract type further ensures that the agreed-upon price is adhered to, enhancing value for money as long as the initial pricing was competitive.

Are there any specific performance risks associated with sustaining electronic and precision equipment like 'ICodes'?

Sustaining electronic and precision equipment, such as that likely covered by the 'ICodes' contract, carries inherent performance risks. These can include the obsolescence of components, the difficulty in sourcing specialized parts, the need for highly skilled technicians with specific expertise, and the potential for rapid technological advancements to render the equipment outdated. Environmental factors, such as electromagnetic interference or harsh operating conditions, can also impact equipment reliability. Furthermore, ensuring the security of sensitive electronic systems against cyber threats is a critical risk. The long-term nature of the contract (5 years) necessitates proactive management of these risks, including technology refresh strategies and robust maintenance protocols.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Other Electronic and Precision Equipment Repair and Maintenance

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HTC71119QD037

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6200 JAMES S MCDONNELL BLVD, SAINT LOUIS, MO, 63134

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: $46,706,270

Exercised Options: $46,706,270

Current Obligation: $46,706,270

Actual Outlays: $1,398,952

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $2,420,796

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 47QTCA19D00G3

IDV Type: FSS

Timeline