Boeing awarded $17.3M contract for missile system support materials by the Department of Defense
Contract Overview
Contract Amount: $17,341,093 ($17.3M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2006-10-23
End Date: 2010-03-31
Contract Duration: 1,255 days
Daily Burn Rate: $13.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: REQUIREMENT IS FOR PURCHASE OF SUPPORT MATERIALS FOR MISSILE SYSTEMS.
Place of Performance
Location: SAINT LOUIS, ST. LOUIS (CITY) County, MISSOURI, 63166
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $17.3 million to THE BOEING COMPANY for work described as: REQUIREMENT IS FOR PURCHASE OF SUPPORT MATERIALS FOR MISSILE SYSTEMS. Key points: 1. Contract awarded for essential support materials for missile systems. 2. Sole-source award raises questions about potential cost efficiencies. 3. Long-term contract duration suggests a sustained need for these materials. 4. Focus on a specific manufacturing sector indicates specialized requirements. 5. Fixed-price contract type shifts risk to the contractor. 6. Awarded by the Department of the Navy, indicating a specific military application.
Value Assessment
Rating: questionable
The contract value of $17.3 million for missile system support materials is difficult to benchmark without more specific details on the nature of the materials and their quantities. As a sole-source award, there is no direct comparison to assess pricing competitiveness. The firm fixed-price structure, however, aims to control costs by placing the financial risk on the contractor, but the absence of competition limits the ability to determine if the price represents optimal value for the government.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, often due to proprietary technology, unique capabilities, or urgent needs. The lack of competition means there was no opportunity for price discovery through a bidding process, potentially leading to higher costs than if multiple companies had competed.
Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without competing offers, it's harder to ensure the government received the best possible price for these critical missile system support materials.
Public Impact
The Department of the Navy benefits from the continued availability of essential support materials for its missile systems. This contract ensures the operational readiness and maintenance of critical defense assets. The geographic impact is primarily centered around the contractor's facilities in Missouri. The contract supports jobs within the guided missile and space vehicle manufacturing sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and potentially increases costs for taxpayers.
- Lack of transparency in the justification for sole-source award.
- Long contract duration could lead to cost overruns if not managed effectively.
- Potential for contractor lock-in due to specialized nature of support materials.
Positive Signals
- Firm fixed-price contract shifts cost risk to the contractor.
- Award supports a critical defense capability, ensuring national security.
- Contractor is established in a specialized manufacturing sector.
Sector Analysis
The contract falls within the Guided Missile and Space Vehicle Manufacturing sector (NAICS 336414), a highly specialized area of defense industrial base. This sector is characterized by high barriers to entry, significant R&D investment, and stringent quality control requirements. Spending in this area is directly tied to national defense priorities and the procurement cycles of major weapon systems. Comparable spending benchmarks are difficult to establish due to the proprietary nature of many missile systems and their support requirements.
Small Business Impact
This contract does not appear to have a small business set-aside. Given the specialized nature of missile system support materials and the award to a large prime contractor like Boeing, it is unlikely that significant subcontracting opportunities for small businesses were mandated or a primary focus of this specific award. Further analysis would be needed to determine if any small business subcontracting plans were part of the agreement.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a sole-source award, the justification and terms would be subject to review by relevant procurement authorities. Transparency is limited due to the non-competitive nature of the award. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- Missile Systems Procurement
- Defense Logistics Support
- Aerospace Manufacturing
- Naval Weapon Systems
Risk Flags
- Sole-source award without clear justification.
- Potential for inflated pricing due to lack of competition.
- Long contract duration may not reflect current market conditions.
Tags
defense, department-of-defense, department-of-the-navy, missile-systems, support-materials, guided-missile-and-space-vehicle-manufacturing, firm-fixed-price, sole-source, boeing, missouri, large-business
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $17.3 million to THE BOEING COMPANY. REQUIREMENT IS FOR PURCHASE OF SUPPORT MATERIALS FOR MISSILE SYSTEMS.
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: 2006-10-23. End: 2010-03-31.
What specific types of support materials are being procured under this contract?
The provided data indicates the requirement is for 'support materials for missile systems.' However, the specific nature, quantity, and technical specifications of these materials are not detailed. This could range from specialized components, testing equipment, maintenance supplies, or documentation crucial for the upkeep and operational readiness of various missile platforms. Without further information, it's challenging to assess the value or necessity of these materials beyond their general classification.
What was the justification for awarding this contract on a sole-source basis?
The justification for a sole-source award is typically based on factors such as unique capabilities, proprietary technology, or the unavailability of the required goods or services from other sources. For a contract like this, it might be that only The Boeing Company possesses the necessary technical expertise, manufacturing processes, or existing infrastructure to produce or supply these specific support materials for the missile systems in question. A formal justification document, often required for sole-source procurements, would provide the detailed rationale.
How does the contract duration of 1255 days impact cost and performance?
A contract duration of 1255 days (approximately 3.5 years) suggests a long-term need for these missile system support materials. From a cost perspective, a longer duration can sometimes lead to economies of scale for the contractor, potentially resulting in lower per-unit costs if production volumes are high and consistent. However, it also increases the government's exposure to potential price increases over time, especially if the contract includes escalation clauses. For performance, a longer duration allows for sustained support and reduces the administrative burden of frequent re-procurement, ensuring continuity for the end-users.
What is the significance of the 'Guided Missile and Space Vehicle Manufacturing' NAICS code?
The NAICS code 336414, 'Guided Missile and Space Vehicle Manufacturing,' signifies that the contractor is involved in the production of complex, high-technology defense systems. This industry is characterized by stringent quality standards, advanced engineering, and significant research and development. Contracts within this sector are critical for national security and often involve specialized supply chains and highly skilled labor. The code indicates that the support materials procured are directly related to the manufacturing or maintenance of these advanced weapon systems.
What are the potential risks associated with a firm fixed-price contract for specialized materials?
While a firm fixed-price (FFP) contract is designed to provide cost certainty for the buyer, it carries risks, especially for specialized materials. If the contractor underestimates the costs associated with production, materials, or labor, they may incur losses. Conversely, if the initial price is set too high due to uncertainty or lack of competition, the government may overpay. For specialized materials, unforeseen technical challenges or supply chain disruptions could significantly impact the contractor's ability to deliver at the agreed-upon price, potentially leading to delays or disputes if not managed proactively.
How does this contract fit into the broader context of Department of Defense spending on missile systems?
This contract represents a component of the Department of Defense's overall investment in maintaining and modernizing its missile systems. While the $17.3 million value is significant, it is likely a fraction of the total budget allocated to missile programs, which include research, development, procurement of new systems, and ongoing sustainment. Such support material contracts are crucial for ensuring the operational readiness and longevity of existing missile inventories, complementing larger capital investments in new platforms and technologies.
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: 499 BOEING BOULEVARD, HUNTSVILLE, AL, 05
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $17,341,093
Exercised Options: $17,341,093
Current Obligation: $17,341,093
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2006-10-23
Current End Date: 2010-03-31
Potential End Date: 2010-03-31 00:00:00
Last Modified: 2011-12-07
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