Naval Air Systems Command awarded $17.3M for guided missile components, with Boeing as the sole contractor

Contract Overview

Contract Amount: $17,317,688 ($17.3M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2004-03-30

End Date: 2010-12-31

Contract Duration: 2,467 days

Daily Burn Rate: $7.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200408!000017!1700!AT717 !NAVAL AIR SYSTEMS COMMAND !N0001903C0053 !A!N! !N! ! !20040330!20050630!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST. LOUIS (CITY) !MISSOURI !+000016102292!N!N!000016102292!1420!GUIDED MISSILE COMPONENTS !A2 !MISSILE AND SPACE SYSTEMS !000 !* !541512!E! !3! ! ! ! ! !99990909!B! ! !A! !D!U!J!1!001!N!1A!A!N!A! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! !Y! ! !0001! !

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $17.3 million to THE BOEING COMPANY for work described as: 200408!000017!1700!AT717 !NAVAL AIR SYSTEMS COMMAND !N0001903C0053 !A!N! !N! ! !20040330!20050630!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST. … Key points: 1. Contract awarded for guided missile components, indicating a need for specialized defense manufacturing. 2. Sole-source award suggests potential limitations in market competition or unique contractor capabilities. 3. Fixed-price contract type aims to control costs, but requires careful monitoring for scope creep. 4. Long contract duration of over 8 years may indicate a complex or ongoing program requirement. 5. Awarded by the Department of the Navy, highlighting a significant defense procurement. 6. Contract value of $17.3M falls within a moderate spending range for defense components.

Value Assessment

Rating: fair

The contract value of $17.3 million for guided missile components appears to be a reasonable amount for specialized defense hardware. However, without specific details on the quantity and nature of the components, a direct comparison to similar contracts is difficult. The firm fixed-price structure suggests an attempt to control costs, but the long duration could lead to price increases if not managed effectively. Benchmarking value is challenging without more granular data on the specific components and their market rates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor, McDonnell Douglas Corporation (later acquired by Boeing), was solicited. This approach is typically used when there is a lack of competition, unique capabilities required, or for urgent needs. The absence of a competitive bidding process means that the government did not benefit from potential price reductions or innovative solutions that might have emerged from multiple bidders. This can limit price discovery and potentially lead to higher costs.

Taxpayer Impact: Sole-source awards can mean taxpayers may not be getting the best possible price due to the lack of competitive pressure. It also raises questions about whether alternative solutions or suppliers were adequately explored.

Public Impact

The primary beneficiaries are the U.S. Navy's aviation programs requiring guided missile components. Services delivered include the manufacturing and supply of critical components for missile systems. Geographic impact is primarily within the defense industrial base, supporting manufacturing jobs. Workforce implications include skilled labor in aerospace manufacturing and engineering.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and innovation.
Long contract duration increases risk of cost overruns if not managed properly.
Lack of transparency in the sole-source justification could hide potential inefficiencies.
Potential for contractor lock-in due to specialized nature of components.

Positive Signals

Firm fixed-price contract provides cost certainty if scope is well-defined.
Award to a major defense contractor like Boeing suggests capability and reliability.
Focus on critical missile components supports national defense objectives.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on missile systems. The market for such specialized components is often concentrated among a few large defense contractors due to high barriers to entry, including technological expertise, security clearances, and significant capital investment. Comparable spending benchmarks would typically be found within other Department of Defense contracts for similar weapon system components, often running into millions or billions of dollars depending on scale and complexity.

Small Business Impact

This contract does not appear to have a small business set-aside. As a sole-source award to a large prime contractor, the opportunities for small businesses would likely be limited to subcontracting roles. The prime contractor's subcontracting plan, if any, would determine the extent of small business participation. Without specific subcontracting data, it's difficult to assess the impact on the small business ecosystem, but typically large sole-source awards offer fewer direct opportunities for small businesses compared to competitively bid contracts with set-asides.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures would include contract performance reviews, milestone tracking, and financial audits. Transparency is limited due to the sole-source nature, but contract awards are generally reported in federal databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Guided Missile Production
Aerospace Component Manufacturing
Naval Aviation Support
Defense Procurement
Sole-Source Defense Contracts

Risk Flags

Sole-source award
Long contract duration
Potential PSC misclassification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.3 million to THE BOEING COMPANY. 200408!000017!1700!AT717 !NAVAL AIR SYSTEMS COMMAND !N0001903C0053 !A!N! !N! ! !20040330!20050630!149879157!006265946!009256819!N!MCDONNELL DOUGLAS CORPORATION !J S MCDONNELL BLVD !SAINT LOUIS !MO!63166!65000!510!29!ST. LOUIS !ST. LOUIS (CITY) !MISSOURI !+000016102292!N!N!000016102292!1420!GUIDED MISSILE COMPONENTS !A2 !MISSILE AND SPACE SYSTEMS !000 !* !541512!E! !3! ! ! ! ! !999

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 $17.3 million.

What is the period of performance?

Start: 2004-03-30. End: 2010-12-31.

What specific types of guided missile components were procured under this contract?

The provided data indicates the contract was for 'GUIDED MISSILE COMPONENTS' under the Product Service Code (PSC) '541512' (Computer Systems Design Services), which seems like a misclassification given the description. More specific details regarding the exact components (e.g., guidance systems, warheads, propulsion elements, airframes) are not available in the summary data. Typically, such components are critical parts of larger missile systems like air-to-air, air-to-ground, or surface-to-air missiles. Understanding the specific components is crucial for assessing technical requirements, performance expectations, and potential obsolescence risks.

Why was this contract awarded on a sole-source basis to McDonnell Douglas Corporation?

Sole-source awards are generally justified when only one responsible source can provide the required supplies or services. Common reasons include unique capabilities, proprietary technology, urgent and compelling needs where competition is not feasible, or when the contract is a follow-on to a previous sole-source award where switching contractors would be prohibitively expensive or technically difficult. Without the specific justification documentation, it's impossible to definitively state the reason. However, given the nature of defense contracting, it often relates to specialized technology or integration with existing platforms where only one company possesses the necessary expertise or intellectual property.

How does the contract's duration (over 8 years) impact its overall value and risk?

A contract duration of over 8 years (2467 days) for guided missile components is substantial. On the one hand, it suggests a long-term, stable requirement for these components, potentially indicating a critical and ongoing program. This long duration can provide predictability for the contractor, allowing for better resource planning and potentially economies of scale. However, it also significantly increases risks. These include the risk of technological obsolescence if missile technology evolves rapidly, the risk of price escalation over time due to inflation or changes in material costs (even with fixed-price contracts, adjustments can occur), and the risk of contractor performance degradation or loss of key personnel. Effective program management and oversight are crucial to mitigate these long-term risks.

What is the significance of the PSC code '541512' being associated with 'Guided Missile Components'?

The Product Service Code (PSC) '541512' is officially designated for 'Computer Systems Design Services'. Its association with 'Guided Missile Components' in this contract record appears to be a potential misclassification or an indicator of the system design aspect being a primary focus. Guided missile components often involve complex electronic and software systems. It's possible the contract covered the design and integration of the computer systems that control the missile's guidance, navigation, and control (GNC) functions, rather than the physical hardware components like airframes or engines. This highlights a potential data quality issue or a nuanced scope of work that emphasizes the 'brains' of the missile.

What was the historical spending trend for guided missile components by the Department of the Navy prior to this award?

The provided data only contains information for this specific contract award. To understand historical spending trends for guided missile components by the Department of the Navy, one would need to analyze procurement data over multiple fiscal years. This would involve querying federal procurement databases (like FPDS or USASpending) for similar PSC codes (e.g., related to ordnance, aerospace components, missile parts) and filtering by the Department of the Navy and relevant time periods. Such an analysis would reveal patterns in spending levels, major contractors, and the types of components frequently procured, helping to contextualize the $17.3 million award.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: J S MCDONNELL BLVD, SAINT LOUIS, MO, 90

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline