Boeing awarded $168.7M for Production Acceptance Test & Evaluation, a significant contract in ammunition manufacturing

Contract Overview

Contract Amount: $168,722,350 ($168.7M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2010-02-09

End Date: 2017-03-31

Contract Duration: 2,607 days

Daily Burn Rate: $64.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PRODUCTION ACCEPTANCE TEST&EVALUATION

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $168.7 million to THE BOEING COMPANY for work described as: PRODUCTION ACCEPTANCE TEST&EVALUATION Key points: 1. The contract value of $168.7 million represents a substantial investment in defense readiness. 2. Boeing, a major defense contractor, secured this award through full and open competition. 3. The contract duration of 2607 days indicates a long-term need for these services. 4. The firm-fixed-price structure suggests a clear understanding of project scope and cost. 5. This award falls within the ammunition manufacturing sector, crucial for military operations. 6. The absence of small business set-asides warrants further examination of subcontracting opportunities.

Value Assessment

Rating: good

The contract value of $168.7 million for Production Acceptance Test & Evaluation appears reasonable given the duration and the nature of defense contracting. Benchmarking against similar large-scale test and evaluation contracts for defense systems would provide a more precise value-for-money assessment. However, the firm-fixed-price nature suggests that the government has a defined scope, which can lead to cost predictability. Without specific per-unit data or comparison to industry standards for similar testing services, a definitive value assessment is challenging, but the scale suggests a significant, albeit necessary, expenditure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely encouraged to participate. The fact that Boeing was the sole awardee suggests they offered the most advantageous proposal based on the evaluation criteria. The level of competition, while broad in its initial invitation, ultimately resulted in a single award, which is typical for complex defense procurements. This process aims to ensure fair pricing and access to the best available capabilities.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation. It ensures that the government is not limited to a single provider, potentially leading to better value and more robust solutions.

Public Impact

The primary beneficiaries are the Department of Defense and its operational units, who will receive tested and evaluated ammunition. The services delivered are critical for ensuring the reliability and effectiveness of ammunition used in military operations. The geographic impact is primarily centered around the contractor's facilities in Missouri, where the testing and evaluation activities will likely take place. Workforce implications include employment opportunities for skilled personnel in testing, evaluation, and manufacturing support roles within Boeing and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of explicit small business subcontracting goals may limit opportunities for smaller enterprises in the defense industrial base.
The long contract duration could present risks if technological advancements or changing military requirements necessitate modifications.

Positive Signals

Awarded through full and open competition, suggesting a robust and fair bidding process.
Firm-fixed-price contract type provides cost certainty for the government.
Boeing's established track record in defense manufacturing implies a high likelihood of successful performance.

Sector Analysis

This contract falls within the defense sector, specifically focusing on ammunition manufacturing and associated testing and evaluation. The defense sector is characterized by high-value, long-term contracts driven by national security needs. Spending in this area is often influenced by geopolitical events and military readiness requirements. Comparable spending benchmarks would involve looking at other large-scale contracts for munitions production and quality assurance within the Department of Defense.

Small Business Impact

The contract data indicates that this was not a small business set-aside, nor does it explicitly mention small business subcontracting goals. This suggests that the primary award went to a large prime contractor. Further analysis would be needed to determine if significant subcontracting opportunities exist for small businesses within Boeing's supply chain for this specific contract. The absence of set-asides could mean fewer direct opportunities for small businesses to compete for the prime contract itself.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contract management agencies, such as the Defense Contract Management Agency (DCMA). Accountability measures are embedded in the contract terms, including performance standards and payment schedules tied to deliverables. Transparency is facilitated through contract databases like FPDS-NG, which provide public access to contract award details. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Ammunition Procurement
Weapons Systems Testing and Evaluation
Military Readiness Programs
Aerospace and Defense Manufacturing

Risk Flags

Long contract duration may increase risk of obsolescence or requirement changes.
Potential for cost overruns if scope is not precisely managed, despite fixed-price.
Reliance on a single large contractor could limit flexibility.
Safety risks inherent in ammunition testing require stringent protocols.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $168.7 million to THE BOEING COMPANY. PRODUCTION ACCEPTANCE TEST&EVALUATION

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 $168.7 million.

What is the period of performance?

Start: 2010-02-09. End: 2017-03-31.

What is Boeing's historical performance record with the Department of Defense on similar ammunition-related contracts?

Boeing has a long and extensive history of contracting with the Department of Defense across various platforms and systems, including munitions. While specific performance metrics for this exact contract (Production Acceptance Test & Evaluation) are not detailed here, Boeing is generally considered a reliable, albeit large, defense contractor. Their track record includes both highly successful large-scale programs and instances of cost overruns or schedule delays, which are not uncommon in the defense industry. For this particular contract, the 'good' rating in the value assessment suggests a generally positive outlook, but a deeper dive into past performance reports and any contract modifications or disputes related to similar ammunition testing contracts would provide a more comprehensive picture of their reliability and efficiency in this specific domain.

How does the awarded amount of $168.7 million compare to the average cost of similar ammunition test and evaluation contracts?

Directly comparing the $168.7 million award to 'average' costs for similar ammunition test and evaluation contracts is challenging without more granular data on the scope, complexity, and duration of those comparable contracts. Ammunition testing and evaluation can vary significantly, from basic functional tests to extensive environmental and performance trials. Given that this contract spans over 2600 days (approximately 7 years), the total value is spread over a considerable period. The firm-fixed-price nature suggests a well-defined scope. To benchmark effectively, one would need to analyze contracts for similar types and quantities of ammunition, with comparable testing protocols and durations, awarded to different prime contractors. However, the scale of this award indicates a significant and long-term requirement for these services within the DoD.

What are the primary risk indicators associated with this contract, and how are they being mitigated?

Primary risk indicators for this contract include the long duration (2607 days), which can lead to obsolescence, changing requirements, or cost escalation if not managed properly. Another risk is the complexity inherent in testing and evaluating ammunition, where failures can have significant safety and operational implications. The reliance on a single large contractor, while potentially efficient, can also pose a risk if performance issues arise. Mitigation strategies likely include robust contract oversight by the DCMA, clear performance metrics and milestones, adherence to strict safety protocols during testing, and potentially incorporating flexibility clauses for requirement adjustments. The firm-fixed-price structure itself is a risk mitigation tool for the government, locking in costs for a defined scope.

What is the expected program effectiveness and impact of this contract on military readiness?

The expected program effectiveness is high, as the contract directly supports the assurance of ammunition quality and reliability. By ensuring that ammunition passes rigorous acceptance tests and evaluations, the program directly contributes to the warfighter's confidence in their equipment and enhances overall military readiness. Reliable ammunition is fundamental to mission success and troop safety. This contract ensures that the munitions entering the supply chain meet stringent DoD specifications, thereby reducing the risk of malfunctions or failures in operational environments. The long-term nature of the contract suggests a sustained need for these critical testing services, underscoring their importance to ongoing defense operations.

How has federal spending on ammunition manufacturing and testing evolved over the past five years, and where does this contract fit in?

Federal spending on ammunition manufacturing and testing has historically been substantial, fluctuating based on global security environments, ongoing conflicts, and modernization efforts. While specific year-over-year data for this exact contract isn't provided, the Department of Defense consistently allocates billions annually to procure and maintain a wide array of munitions. This $168.7 million contract, awarded in 2010 and spanning several years, represents a significant, long-term investment within this broader spending category. It likely aligns with strategic goals to ensure a robust and reliable supply of critical ammunition types. Understanding its place requires comparing its value and duration against other major ammunition procurement and sustainment contracts awarded during the same period.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0001908R0075

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6200 JS MCDONNELL BLVD, SAINT LOUIS, MO, 63134

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

Financial Breakdown

Contract Ceiling: $169,670,255

Exercised Options: $169,021,748

Current Obligation: $168,722,350

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline