Boeing's $155M Harpoon missile contract awarded without competition, raising value-for-money questions

Contract Overview

Contract Amount: $155,448,628 ($155.4M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2008-08-25

End Date: 2011-03-31

Contract Duration: 948 days

Daily Burn Rate: $164.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: HARPOON AIR LAUNCH (TACTICAL)PRODUCTION

Place of Performance

Location: SAINT LOUIS, ST. LOUIS (CITY) County, MISSOURI, 63166

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $155.4 million to THE BOEING COMPANY for work described as: HARPOON AIR LAUNCH (TACTICAL)PRODUCTION Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The firm-fixed-price contract structure shifts some risk to the government. 3. Lack of competition may indicate limited market availability or strategic sourcing decisions. 4. Performance context is tied to the production of tactical air-launched Harpoon missiles. 5. This contract falls within the Guided Missile and Space Vehicle Manufacturing sector. 6. The contract duration of 948 days suggests a significant production run.

Value Assessment

Rating: questionable

Without competitive bidding, it is difficult to benchmark the value for money. The $155.4 million contract for Harpoon air-launched missiles was awarded to The Boeing Company. Given the sole-source nature, a direct comparison to similar contracts is challenging. However, the firm-fixed-price structure implies that the government agreed to a set price, which may or may not reflect the best possible market rate due to the absence of competition. Further analysis would require understanding the specific technical requirements and the availability of alternative suppliers.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, The Boeing Company, was solicited. This approach is typically used when only one responsible source is available or when there is a compelling justification for not seeking competition. The lack of multiple bidders means there was no opportunity for price negotiation or comparison among different providers, which can lead to higher costs for the government.

Taxpayer Impact: Taxpayers may have paid a premium for this contract due to the absence of competitive pressure. The sole-source award limits the government's ability to secure the most cost-effective solution.

Public Impact

The primary beneficiaries are the Department of the Navy, which receives advanced tactical missile capabilities. The contract delivers production of the Harpoon air-launched tactical missile system. The geographic impact is primarily centered around Boeing's facility in St. Charles, Missouri. Workforce implications include employment for skilled labor in missile manufacturing and related support roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and value.
Firm-fixed-price contract shifts some risk to the government.
Lack of competition may indicate limited market alternatives.
Contract awarded in 2008, potential for outdated pricing if not adjusted.

Positive Signals

Boeing is a known entity with established production capabilities for this system.
Firm-fixed-price contract provides cost certainty once awarded.
Contract supports critical defense capabilities for the Navy.

Sector Analysis

The contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a specialized area of the aerospace and defense industry. This sector is characterized by high technological barriers to entry, significant R&D investment, and often involves long production cycles. The market for advanced missile systems is typically dominated by a few large defense contractors. Comparable spending benchmarks would involve analyzing other large-scale missile production contracts, which are often awarded through competitive processes but can also be sole-sourced for specific platforms or upgrades.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. Furthermore, the prime contractor, The Boeing Company, is a large aerospace firm. There is no explicit information regarding subcontracting plans with small businesses within the provided data. The absence of a set-aside suggests that opportunities for small businesses may be limited to direct supply chain roles rather than prime contracting.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense and the Department of the Navy. As a sole-source award, scrutiny might be higher to ensure fair and reasonable pricing. Accountability measures would be tied to contract performance, delivery schedules, and quality standards. Transparency is limited due to the non-competitive nature, but contract awards are generally reported. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse.

Related Government Programs

Harpoon Missile System
Naval Air Systems Command (NAVAIR)
Tactical Missile Production
Guided Missile Manufacturing
Department of Defense Procurement

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $155.4 million to THE BOEING COMPANY. HARPOON AIR LAUNCH (TACTICAL)PRODUCTION

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 $155.4 million.

What is the period of performance?

Start: 2008-08-25. End: 2011-03-31.

What is the historical spending trend for the Harpoon Air Launch (Tactical) Production program?

The provided data represents a single contract award of $155,448,628.31 to The Boeing Company for the production of Harpoon Air Launch (Tactical) missiles, awarded on August 25, 2008, and ending on March 31, 2011. This specific data point does not allow for an analysis of historical spending trends. To understand trends, one would need to examine a series of contracts for this system over multiple years, including potential sustainment, upgrades, and different production phases. Analyzing prior and subsequent contracts, as well as the total program cost over its lifecycle, would be necessary to identify spending patterns, budget allocations, and any fluctuations in investment.

How does the per-unit cost of this Harpoon missile production compare to market rates or similar contracts?

Determining the per-unit cost requires dividing the total contract value by the number of units produced. The contract value is $155,448,628.31, and the number of units is not explicitly stated but implied by the production context. However, since this was a sole-source contract awarded to The Boeing Company, direct comparison to market rates or similar contracts is inherently difficult. Without competitive bids, there's no benchmark to assess if the price was optimal. To establish a comparison, one would need access to data from other Harpoon procurements (if any were competed) or from similar tactical missile systems from different manufacturers, factoring in variations in capabilities, technology, and production scale. The absence of competition makes a definitive value-for-money assessment challenging.

What are the specific risks associated with a sole-source award for tactical missile production?

The primary risk associated with a sole-source award for tactical missile production is the potential for inflated costs due to the lack of competitive pressure. Without competing bids, the government may not achieve the best possible price or value. Another risk is reduced innovation, as the sole provider may have less incentive to invest in cost-saving measures or technological advancements if they are guaranteed the contract. Furthermore, reliance on a single supplier can create supply chain vulnerabilities; if the sole source encounters production issues, delays, or ceases operations, the government's ability to procure these critical assets could be severely impacted. This also limits the government's leverage in negotiating terms and conditions.

What is The Boeing Company's track record with producing the Harpoon missile system?

The Boeing Company has a long-standing history and established expertise in producing the Harpoon missile system. As the original developer and primary manufacturer, Boeing has consistently supplied the U.S. Navy and allied nations with this weapon system for decades. Their track record includes numerous production contracts, upgrades, and integration efforts across various platforms (air, ship, and coastal defense variants). While this specific contract was sole-sourced, it reflects Boeing's continued role as the incumbent and sole qualified producer for this particular iteration of the Harpoon. Their extensive experience suggests a high degree of technical proficiency and production capability, though the absence of competition on this award means performance metrics beyond delivery and basic quality are not readily available for comparison.

How does this contract fit into the broader context of U.S. Navy's tactical aviation and missile defense strategy?

This contract for the production of Harpoon air-launched tactical missiles directly supports the U.S. Navy's maritime strike capabilities. The Harpoon is a key component of the Navy's anti-ship missile arsenal, providing a stand-off attack capability against surface targets from various aircraft platforms. Its inclusion in the Navy's inventory is crucial for maintaining sea control and projecting power. Awarding this production contract ensures the continued availability and replenishment of these vital munitions, aligning with the Navy's strategic objective of possessing a robust and modern force structure capable of deterring adversaries and responding to threats in contested maritime environments. The specific timing of the award (2008-2011) suggests it was part of ongoing efforts to modernize and sustain the fleet's offensive capabilities during that period.

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

Solicitation ID: N0001908R0030

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6200 JS MCDONNELL BLVD, SAINT LOUIS, MO, 90

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $155,448,628

Exercised Options: $155,448,628

Current Obligation: $155,448,628

Contract Characteristics

Cost or Pricing Data: NO

Timeline