DoD's $1.8B Boeing Contract for Missile Vehicles: Sole-Source Award Raises Concerns
Contract Overview
Contract Amount: $180,560,856 ($180.6M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2005-11-04
End Date: 2009-06-30
Contract Duration: 1,334 days
Daily Burn Rate: $135.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Place of Performance
Location: SAINT LOUIS, ST. LOUIS (CITY) County, MISSOURI, 63166
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $180.6 million to THE BOEING COMPANY for work described as: Key points: 1. Significant contract value of $1.8 billion awarded to a single large business. 2. Sole-source award to Boeing suggests limited competition and potential for higher pricing. 3. Long contract duration of over 3 years may indicate complex requirements or extended production. 4. The sector is Guided Missile and Space Vehicle Manufacturing, a critical defense area.
Value Assessment
Rating: questionable
The contract value of $1.8 billion is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to similar contracts for guided missile and space vehicle manufacturing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to The Boeing Company. This lack of competition limits price discovery and may result in less favorable terms for the government.
Taxpayer Impact: The sole-source nature of this large contract could lead to taxpayers paying a premium due to the absence of competitive pressure.
Public Impact
Taxpayers may be overpaying for critical defense components due to the lack of competition. Reliance on a single supplier for advanced missile technology could pose long-term supply chain risks. The substantial investment highlights the ongoing need for advanced missile systems in national defense.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- High contract value
Positive Signals
- Critical defense procurement
- Award to established prime contractor
Sector Analysis
This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a highly specialized and critical area for national defense. Spending in this sector is often characterized by high R&D costs, complex manufacturing processes, and significant government oversight.
Small Business Impact
The contract was awarded to The Boeing Company, a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award, suggesting limited direct benefit to the small business sector.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and performance. Accountability mechanisms should be robust to track expenditures and verify the necessity and value of the procured items.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition.
- Potential for inflated pricing due to lack of competition.
- Long contract duration may obscure cost efficiencies.
- Lack of small business participation noted.
- High dollar value increases financial risk exposure.
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 $180.6 million to THE BOEING COMPANY. See the official description on USAspending.
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 $180.6 million.
What is the period of performance?
Start: 2005-11-04. End: 2009-06-30.
What was the justification for awarding this contract on a sole-source basis, and were alternative procurement strategies considered?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. The Department of Defense would have had to document why competition was not feasible or advantageous. Alternative strategies might have included market research to identify potential competitors or phased procurements to encourage competition over time.
How does the unit cost of these guided missiles compare to similar systems procured competitively?
Without access to detailed cost breakdowns and benchmarks for comparable systems, it is challenging to definitively assess the unit cost. However, sole-source contracts inherently lack the price reduction pressures of competition. A thorough cost analysis by the agency, potentially involving independent government cost estimators, would be necessary to determine if the price paid was reasonable relative to market alternatives.
What are the potential risks associated with relying solely on Boeing for this critical defense capability over the contract's duration?
Sole-source reliance increases vulnerability to supply chain disruptions, potential price escalations, and reduced innovation incentives for the contractor. If Boeing faces production issues, financial instability, or strategic shifts, the Department of Defense's ability to acquire these vital assets could be severely impacted, potentially jeopardizing national security readiness.
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
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
Timeline
Start Date: 2005-11-04
Current End Date: 2009-06-30
Potential End Date: 2009-06-30 00:00:00
Last Modified: 2010-11-12
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