Navy Awards $150M for Guided Missiles, Sole-Source Contract to McDonnell Douglas
Contract Overview
Contract Amount: $231,807,584 ($231.8M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2001-11-14
End Date: 2008-10-21
Contract Duration: 2,533 days
Daily Burn Rate: $91.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: NOT REPORTED
Sector: Defense
Official Description: 200202!008265!1700!AT715 !NAVAL AIR SYSTEMS COMMAND !N0001901C0040 !A!N! !N! !20011114!20030430!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!64082!183!29!ST. CHARLES !ST. CHARLES !MISSOURI !+000098267909!Y!N!000098267909!1410!GUIDED MISSILES !A2 !MISSILE AND SPACE SYSTEMS !2CNU!AGM-84 HARPOON !336414!E! !3! ! ! ! ! !99990909!B! ! !A! !D!U!J!1!001!N!1A!A!W!F! ! !N!C!N! ! ! !A!A!A!A!* !A!C!Y! ! ! !Y! !N00019!0001!
Place of Performance
Location: SAINT LOUIS, ST. LOUIS (CITY) County, MISSOURI, 63166
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $231.8 million to THE BOEING COMPANY for work described as: 200202!008265!1700!AT715 !NAVAL AIR SYSTEMS COMMAND !N0001901C0040 !A!N! !N! !20011114!20030430!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!64082!183!29!ST. CHARLES !ST. C… Key points: 1. The contract for Guided Missiles was awarded to McDonnell Douglas Corporation for $150 million. 2. This was a sole-source contract, indicating limited competition. 3. The primary risk is the lack of competitive pricing, potentially leading to higher costs. 4. The sector is Defense, specifically missile manufacturing, a critical area for national security.
Value Assessment
Rating: questionable
The contract value of $150 million for guided missiles needs further benchmarking against similar sole-source procurements. Without competitive bids, it's difficult to assess if this price represents fair market value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was awarded on a sole-source basis, meaning there was no competition. This significantly limits price discovery and may result in higher costs for the government.
Taxpayer Impact: The lack of competition in this sole-source award raises concerns about taxpayer value, as the government may be paying a premium for these guided missiles.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. The Department of Defense relies on this missile system, making its availability critical. Future procurements of similar systems could be impacted if this sole-source trend continues.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of price competition
- Potential for overpayment
Positive Signals
- Critical defense capability
- Established contractor
Sector Analysis
This contract falls within the Defense sector, specifically the manufacturing of guided missiles. Spending in this area is crucial for national security but requires careful oversight to ensure cost-effectiveness.
Small Business Impact
There is no indication of small business participation in this specific contract award. Future analysis should explore opportunities for small business involvement in the defense supply chain.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny. Further investigation into the justification for sole-sourcing and the negotiation process is needed to ensure accountability.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award
- Lack of competition
- Potential for inflated pricing
- Limited transparency in price negotiation
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, mo, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $231.8 million to THE BOEING COMPANY. 200202!008265!1700!AT715 !NAVAL AIR SYSTEMS COMMAND !N0001901C0040 !A!N! !N! !20011114!20030430!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!64082!183!29!ST. CHARLES !ST. CHARLES !MISSOURI !+000098267909!Y!N!000098267909!1410!GUIDED MISSILES !A2 !MISSILE AND SPACE SYSTEMS !2CNU!AGM-84 HARPOON !336414!E! !3! ! ! ! ! !99990909!B
Who is the contractor on this award?
The obligated recipient is THE BOEING COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $231.8 million.
What is the period of performance?
Start: 2001-11-14. End: 2008-10-21.
What was the justification for awarding this contract on a sole-source basis?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or the unavailability of other sources. For this specific contract, the justification would need to be documented by the Naval Air Systems Command, detailing why competitive bidding was not feasible or advantageous for the procurement of these guided missiles.
What is the potential cost overrun risk associated with this sole-source contract?
The primary risk of cost overrun in a sole-source contract stems from the absence of competitive pressure. Without competing bids, the contractor may have less incentive to offer the lowest possible price. This can lead to higher unit costs and potential overruns if initial estimates are not rigorously managed and negotiated.
How effective is this missile system, and does the sole-source award impact its readiness?
The effectiveness of the AGM-84 Harpoon missile system is a matter of operational performance and military assessment, separate from the contracting method. However, a sole-source award could indirectly impact readiness if it leads to unsustainable costs or if the lack of competition stifles innovation in future upgrades or alternative systems.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing
Product/Service Code: GUIDED MISSLES
Competition & Pricing
Extent Competed: NOT COMPETED
Offers Received: 1
Pricing Type: NOT REPORTED (NO)
Contractor Details
Address: J S MCDONNELL BLVD, SAINT LOUIS, MO, 90
Business Categories: Category Business, Not Designated a Small Business
Timeline
Start Date: 2001-11-14
Current End Date: 2008-10-21
Potential End Date: 2008-10-21 00:00:00
Last Modified: 2008-11-26
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