DoD's $149.8M Surveillance Services Contract with McDonnell Douglas Corporation Raises Questions
Contract Overview
Contract Amount: $34,352,444 ($34.4M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2005-07-14
End Date: 2007-08-31
Contract Duration: 778 days
Daily Burn Rate: $44.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: TIME AND MATERIALS
Sector: R&D
Official Description: 200512!200175!1700!M67854!COMMANDING GENERAL !M6785405C2082 !A!N! !N! ! !20050714!20060714!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!00000! !IZ!* !* !IRAQ !+000019500000!N!N!000000000000!S211!SURVEILLANCE SERVICES !S1 !SERVICES !000 !* !541710!E! !3! ! ! ! ! !20200930!B! ! !N!A!D!N!Y!1!001!N!2A!Z!W!Z!B!IZ!N!M!N! ! ! ! ! !A!A!000!A!B!N! ! ! ! !1727!M67854!0001! !
Place of Performance
Location: SAINT LOUIS, ST. LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $34.4 million to THE BOEING COMPANY for work described as: 200512!200175!1700!M67854!COMMANDING GENERAL !M6785405C2082 !A!N! !N! ! !20050714!20060714!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!00000! !IZ!* !* … Key points: 1. The contract awarded to McDonnell Douglas Corporation for surveillance services was not competed, raising concerns about potential overpricing and lack of market research. 2. With a total value of $149.8 million, the contract spans from July 2005 to August 2007, indicating a significant investment in defense capabilities. 3. The 'Research and Development in the Physical, Engineering, and Life Sciences' (NAICS 541710) sector suggests a focus on advanced technological solutions. 4. The absence of competition and the 'Time and Materials' contract type present a risk of cost overruns and limited accountability for performance.
Value Assessment
Rating: questionable
The contract's value of $149.8 million for surveillance services over two years, without clear benchmarks for similar non-competed contracts, makes a direct pricing assessment difficult. The lack of competition suggests potential for inflated costs compared to a market-driven price.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was awarded as 'NOT COMPETED' (sole-source), indicating a lack of competitive bidding. This limits price discovery and may lead to higher costs for taxpayers as there was no market pressure to offer the best value.
Taxpayer Impact: The sole-source nature of this contract, valued at $149.8 million, means taxpayers may have paid more than necessary due to the absence of competitive pricing.
Public Impact
Taxpayers may have overpaid for surveillance services due to the lack of competition. The duration and value of the contract suggest a significant reliance on this specific provider for critical defense capabilities. The use of a 'Time and Materials' contract type can lead to unpredictable costs and potential for contractor inefficiencies to increase the overall price.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Time and Materials contract type
- Potential for cost overruns
Positive Signals
- Awarded to a major defense contractor
- Supports critical surveillance functions
Sector Analysis
This contract falls under the 'Research and Development in the Physical, Engineering, and Life Sciences' sector (NAICS 541710). Spending in this sector is crucial for technological advancement but requires rigorous oversight to ensure value for money, especially when contracts are not competed.
Small Business Impact
The contract was awarded to McDonnell Douglas Corporation, a large aerospace manufacturer, and later acquired by The Boeing Company. There is no indication that small businesses were involved as subcontractors or prime contractors in this specific award, suggesting limited opportunities for small business participation.
Oversight & Accountability
The 'NOT COMPETED' status and 'Time and Materials' contract type warrant close oversight to ensure the contractor is delivering services efficiently and at a reasonable cost. Accountability for performance and cost control is crucial given the significant value of the contract.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competitive bidding raises concerns about fair pricing.
- Time and Materials contract type increases risk of cost overruns.
- Potential for contractor inefficiencies to inflate costs.
- Limited transparency regarding sole-source justification.
- Significant contract value without clear performance benchmarks.
Tags
research-and-development-in-the-physical, department-of-defense, mo, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $34.4 million to THE BOEING COMPANY. 200512!200175!1700!M67854!COMMANDING GENERAL !M6785405C2082 !A!N! !N! ! !20050714!20060714!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!00000! !IZ!* !* !IRAQ !+000019500000!N!N!000000000000!S211!SURVEILLANCE SERVICES !S1 !SERVICES !000 !* !541710!E! !3! ! ! ! ! !202
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 $34.4 million.
What is the period of performance?
Start: 2005-07-14. End: 2007-08-31.
What specific surveillance capabilities were procured under this contract, and how do they align with current defense needs?
The data indicates the contract was for 'SURVEILLANCE SERVICES' under NAICS code 541710 (Research and Development in the Physical, Engineering, and Life Sciences). While the exact capabilities are not detailed, the value and duration suggest a substantial and ongoing requirement. Understanding the specific technologies and operational support provided is key to assessing its continued relevance and effectiveness in meeting evolving defense intelligence and monitoring objectives.
What was the justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?
The justification for a sole-source award is not provided in the data. Typically, sole-source contracts are used when only one responsible source can provide the required supplies or services. Without this justification, it's difficult to assess if competitive alternatives were truly unavailable or if the process favored a specific contractor, potentially at the expense of taxpayer value and market competition.
How was the 'Time and Materials' pricing structure managed to ensure cost-effectiveness and prevent contractor inefficiencies from inflating the final cost?
The 'Time and Materials' (T&M) contract type inherently carries a risk of cost escalation as it reimburses the contractor for direct labor hours and costs, plus a fixed fee or percentage. Effective oversight would involve rigorous monitoring of labor hours, material costs, and task completion rates. Without detailed reporting on how these elements were controlled and justified, it's challenging to ascertain if the $149.8 million represented good value or if inefficiencies were permitted to drive up the price.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences
Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: TIME AND MATERIALS (Y)
Evaluated Preference: NONE
Contractor Details
Address: J S MCDONNELL BLVD, SAINT LOUIS, MO, 90
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: NOT OBTAINED - WAIVED
Timeline
Start Date: 2005-07-14
Current End Date: 2007-08-31
Potential End Date: 2007-08-31 00:00:00
Last Modified: 2012-09-19
More Contracts from THE Boeing Company
- KC-X Modernization Program — $32.0B (Department of Defense)
- International Space Station — $22.4B (National Aeronautics and Space Administration)
- 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! — $18.8B (Department of Defense)
- USN P-8A FRP II Long Lead Material — $18.1B (Department of Defense)
- 200512!010860!2100!w56hzv!tacom - Warren !w56hzv05c0724 !A!N! !Y! ! !20050923!20141231!016544780!016544780!009256819!n!the Boeing Company !J S Mcdonnell Blvd !saint Louis !mo!63166!65000!510!29!st. Louis !ST. Louis (city) !missouri !+000219245691!n!n!000000000000!az15!rdte/Other Research&development-Eng/Manuf Devel !S1 !services !301 !FCS !541330!E! !1! ! ! ! ! !20200930!B! ! !A! !d!u!u!1!001!n!1a!z!y!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! ! TAS::21 2040::TAS — $12.7B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)