DoD awards $105.8M for guided missiles, with Boeing as the sole contractor

Contract Overview

Contract Amount: $105,821,192 ($105.8M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2002-12-12

End Date: 2007-09-14

Contract Duration: 1,737 days

Daily Burn Rate: $60.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200306!000007!1700!AT715 !NAVAL AIR SYSTEMS COMMAND !N0001902C3196 !A!N! !N! !20021212!20051230!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!64082!183!29!ST. CHARLES !ST. CHARLES !MISSOURI !+000060309731!N!N!000060309731!1410!GUIDED MISSILES !A2 !MISSILE AND SPACE SYSTEMS !1CNU!CORPS SAM !336414!E! !3! ! ! ! ! !99990909!B! ! !A! !D!Y!J!1!001!N!1A!A!N!F! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! !Y! ! !0001! !

Place of Performance

Location: SAINT LOUIS, ST. LOUIS County, MISSOURI, 63134

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $105.8 million to THE BOEING COMPANY for work described as: 200306!000007!1700!AT715 !NAVAL AIR SYSTEMS COMMAND !N0001902C3196 !A!N! !N! !20021212!20051230!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. Contract awarded for guided missile and space systems, indicating a focus on advanced defense capabilities. 2. The contract's firm-fixed-price structure suggests predictable costs for the government, though it may limit flexibility. 3. A long performance period of nearly five years implies a significant, ongoing need for these missile systems. 4. The sole-source nature raises questions about potential cost efficiencies and the availability of alternative solutions. 5. The contractor, Boeing, is a major defense manufacturer with extensive experience in aerospace and missile systems. 6. The contract falls under the 'Guided Missile' product service code, highlighting its specific military application.

Value Assessment

Rating: fair

The total award amount of $105.8 million for guided missiles over a period of approximately 5 years suggests a substantial investment. Without specific details on the quantity or type of missiles, a direct per-unit cost comparison is difficult. However, the duration and value indicate a significant program. Benchmarking against similar large-scale missile system contracts would be necessary for a more precise value assessment. The firm-fixed-price nature aims to control costs, but the lack of competition could lead to less favorable pricing than in a competitive scenario.

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 solicited. This approach is typically used when a unique capability is required, or when there is a lack of viable alternatives. The absence of competition means that the government did not benefit from the price discovery and potential cost reductions that typically arise from multiple bidders vying for a contract. This can sometimes lead to higher prices than might be achieved in a fully competitive environment.

Taxpayer Impact: For taxpayers, a sole-source award means the absence of competitive pressure to drive down costs. This could result in a higher overall expenditure for the required goods or services compared to what might have been achieved through open competition.

Public Impact

The primary beneficiaries are the U.S. military branches requiring advanced guided missile systems for national defense. The contract supports the development, production, or sustainment of critical guided missile and space systems. The geographic impact is primarily centered around the contractor's facilities in Missouri, with potential downstream effects on the national defense industrial base. This contract likely supports a specialized workforce within The Boeing Company, including engineers, technicians, and manufacturing personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Lack of competition may reduce incentives for contractor innovation and efficiency.
Long contract duration could mask inefficiencies if not closely monitored.
Specific details on missile capabilities and performance metrics are not readily available for independent assessment.

Positive Signals

Contract awarded to a major, experienced defense contractor (Boeing) with a proven track record.
Firm-fixed-price contract provides cost certainty for the government.
The contract addresses a critical defense need for guided missile systems.
The award is managed by the Naval Air Systems Command, suggesting established oversight processes.

Sector Analysis

The defense sector, particularly the segment focused on missile and space systems, is characterized by high R&D costs, long development cycles, and significant government investment. This contract for guided missiles fits within this specialized area, where a few large, established companies like Boeing dominate due to the technical expertise and capital required. The market is heavily influenced by government procurement policies and national security priorities. Comparable spending benchmarks would likely involve other major missile programs within the Department of Defense, often running into hundreds of millions or billions of dollars.

Small Business Impact

This contract does not appear to have a small business set-aside component, as it was awarded sole-source to The Boeing Company. There is no explicit information regarding subcontracting plans for small businesses within the provided data. The focus on a large, sole-source award to a prime contractor typically means that opportunities for small businesses would be through subcontracting, the extent of which is not detailed here. This could limit direct opportunities for small businesses to engage with the government on this specific contract.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Naval Air Systems Command (NAVAIR) and the Defense Contract Management Agency (DCMA). These agencies are responsible for ensuring contract compliance, monitoring performance, and verifying deliverables. The firm-fixed-price nature of the contract implies a focus on adherence to the agreed-upon scope and price. Transparency is generally limited for sole-source awards, but contract modifications and performance reports are usually available through official channels, subject to classification.

Related Government Programs

Guided Missile Manufacturing
Aerospace Defense Contracts
Naval Air Systems Command Procurement
Department of Defense Weapon Systems
Space Systems Development

Risk Flags

Sole-source award
Lack of competition
Limited public performance data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $105.8 million to THE BOEING COMPANY. 200306!000007!1700!AT715 !NAVAL AIR SYSTEMS COMMAND !N0001902C3196 !A!N! !N! !20021212!20051230!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!64082!183!29!ST. CHARLES !ST. CHARLES !MISSOURI !+000060309731!N!N!000060309731!1410!GUIDED MISSILES !A2 !MISSILE AND SPACE SYSTEMS !1CNU!CORPS SAM !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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $105.8 million.

What is the period of performance?

Start: 2002-12-12. End: 2007-09-14.

What is the specific type and quantity of guided missiles being procured under this contract?

The provided data indicates the contract is for 'Guided Missile and Space Systems' under the Product Service Code (PSC) '1410'. However, the specific model, quantity, and technical specifications of the missiles are not detailed in the extract. This information is crucial for understanding the scope of work and for performing a thorough value analysis. Such details are typically found in the contract's statement of work or technical exhibits, which are not included in this summary data. Without this, assessing the true value and performance context is challenging.

How does the $105.8 million award compare to historical spending on similar missile systems by the Navy or DoD?

Comparing this $105.8 million award requires identifying specific, comparable missile programs. The Naval Air Systems Command (NAVAIR) procures a wide range of missile systems, from air-to-air to air-to-ground and strategic missiles. Given the contract's duration (2002-2007), it likely represents a significant but not necessarily unprecedented investment for a specific missile system or a batch of systems. To benchmark effectively, one would need to look at other sole-source or competitive awards for similar classes of missiles (e.g., cruise missiles, tactical missiles) awarded around the same period by NAVAIR or other defense agencies. The absence of competition here suggests it might be for a specialized or legacy system where Boeing holds unique capabilities.

What are the key performance metrics and delivery schedules associated with this contract?

The provided data specifies the start date (2002-12-12) and end date (2007-09-14), indicating a performance period of approximately 4 years and 9 months. However, detailed key performance metrics (e.g., reliability, accuracy, range) and specific delivery schedules for the guided missiles are not included. These would typically be outlined in the contract's Statement of Work (SOW) and delivery orders. The firm-fixed-price nature suggests that meeting these (unspecified) metrics and schedules is tied to the contract price, but the lack of public detail makes independent assessment of performance risk difficult.

What is Boeing's track record with the Naval Air Systems Command for similar missile programs?

The Boeing Company is a major defense contractor with a long-standing relationship with the Naval Air Systems Command (NAVAIR) and the Department of Defense. They have a significant history in developing and producing a wide array of aircraft, missiles, and space systems. While this specific contract (N0001902C3196) is for guided missiles, Boeing's broader portfolio includes programs like the Harpoon anti-ship missile, SLAM-ER, and various components for other missile systems. Their extensive experience suggests a high level of technical capability and program management expertise relevant to this contract, though past performance on specific programs would require deeper investigation.

Are there any known risks or concerns associated with this specific sole-source contract or Boeing's performance?

Sole-source contracts inherently carry the risk of reduced price competition and potential complacency from the contractor. Without competitive pressure, there's a possibility that costs could be higher than necessary, or that innovation might be slower. Specific risks for this contract would depend on the missile system's complexity, maturity, and any unique challenges in its production or sustainment. Boeing, like any large defense contractor, may have faced past performance issues on other contracts, but without more specific information on this particular award (e.g., quality issues, delivery delays, cost overruns), it's difficult to pinpoint concrete risks beyond the general concerns associated with sole-source procurements.

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: FIRM FIXED PRICE (J)

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

Financial Breakdown

Contract Ceiling: $106,713,631

Exercised Options: $106,713,631

Current Obligation: $105,821,192

Contract Characteristics

Cost or Pricing Data: NO

Timeline