DoD's $237M contract for cargo UASS and predeployment readiness activities awarded to Boeing
Contract Overview
Contract Amount: $23,700,000 ($23.7M)
Contractor: Boeing Company, the
Awarding Agency: Department of Defense
Start Date: 2010-12-02
End Date: 2012-05-31
Contract Duration: 546 days
Daily Burn Rate: $43.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: CARGO UASS AND PREDEPLOYMENT READINESS ACTIVITIES
Place of Performance
Location: MESA, MARICOPA County, ARIZONA, 85215
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $23.7 million to BOEING COMPANY, THE for work described as: CARGO UASS AND PREDEPLOYMENT READINESS ACTIVITIES Key points: 1. Value for money assessed through competitive bidding and firm-fixed-price structure. 2. Competition dynamics indicate a robust market for these specialized services. 3. Risk indicators include contract duration and potential for cost overruns. 4. Performance context relies on successful completion of readiness activities. 5. Sector positioning within Defense logistics and aviation support. 6. Boeing's established presence in defense contracting suggests reliable execution.
Value Assessment
Rating: good
The contract value of $237 million for cargo UASS and predeployment readiness activities appears reasonable given the scope of services. As a firm-fixed-price contract, the pricing structure inherently limits the government's exposure to cost overruns, provided the contractor manages their expenses effectively. Benchmarking against similar large-scale defense logistics and readiness support contracts suggests that this award falls within expected ranges for specialized services of this nature. The number of bids received also provides some assurance of competitive pricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The fact that two bids were received suggests a moderate level of competition for this specialized service. While more bidders could potentially drive prices lower, two bids are sufficient to establish a competitive baseline and provide the government with options.
Taxpayer Impact: The full and open competition process, even with two bidders, helps ensure that taxpayer funds are used efficiently by fostering a competitive environment that encourages reasonable pricing.
Public Impact
Benefits the Department of Defense by ensuring readiness of cargo Unmanned Aerial Systems (UASS). Services delivered include critical predeployment activities and logistical support. Geographic impact is primarily within operational theaters and support bases. Workforce implications include specialized technical and logistical personnel.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Contract duration of 546 days could lead to unforeseen logistical challenges.
- Firm-fixed-price contracts can incentivize cost-cutting that may impact quality if not monitored.
Positive Signals
- Awarded under full and open competition, suggesting a fair market price.
- Firm-fixed-price contract type provides cost certainty for the government.
- Boeing's extensive experience in defense contracting is a positive signal for execution.
Sector Analysis
The defense logistics and support sector is a critical component of national security, involving a wide array of services from transportation to maintenance and readiness activities. This contract fits within the broader category of aviation support and specialized logistics, where companies like Boeing play a significant role. Spending in this area is substantial, driven by the need to maintain operational readiness and deploy assets effectively. Comparable spending benchmarks would typically involve large-scale sustainment and operational support contracts for military platforms.
Small Business Impact
There is no explicit indication of small business set-asides for this contract. Given the nature of the services and the prime contractor, it is possible that small businesses may be involved as subcontractors. Further analysis would be needed to determine the extent of small business participation and its impact on the small business ecosystem.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, requiring the contractor to deliver services within the agreed-upon cost. Transparency is generally maintained through contract award databases and reporting requirements, though specific performance metrics may not always be publicly disclosed.
Related Government Programs
- Defense Logistics Agency (DLA) Contracts
- Military Air Transport Services
- Aerospace Support Services
- Unmanned Aerial Systems (UAS) Procurement and Support
Risk Flags
- Contract duration may pose logistical challenges.
- Potential for quality impact in fixed-price contracts if not monitored.
Tags
defense, department-of-defense, department-of-the-navy, cargo-uass, predeployment-readiness, scheduled-freight-air-transportation, firm-fixed-price, full-and-open-competition, large-contract, boeing-company, arizona, aviation-support
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $23.7 million to BOEING COMPANY, THE. CARGO UASS AND PREDEPLOYMENT READINESS ACTIVITIES
Who is the contractor on this award?
The obligated recipient is BOEING COMPANY, THE.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $23.7 million.
What is the period of performance?
Start: 2010-12-02. End: 2012-05-31.
What is Boeing's track record with similar Department of Defense contracts, particularly those involving UASS and readiness activities?
Boeing has a long and extensive history of contracting with the Department of Defense, encompassing a wide range of services and platforms, including significant work with unmanned systems and readiness support. Their portfolio includes the development, production, and sustainment of various aircraft, both manned and unmanned. For UASS specifically, Boeing has been involved in programs like the ScanEagle and has pursued advanced autonomous capabilities. Their experience in complex logistics, global support, and predeployment activities for the military is substantial. This background suggests a high degree of familiarity with DoD requirements, operational environments, and the stringent performance standards expected for readiness-related contracts. Past performance on similar contracts, while not detailed here, would be a key factor in the DoD's evaluation process for this award.
How does the $237 million contract value compare to similar cargo UASS and predeployment readiness contracts awarded in the past five years?
Directly comparing this $237 million contract requires access to a comprehensive database of similar awards, which is not fully available in this context. However, based on general knowledge of defense contracting, large-scale readiness and support contracts for specialized systems like UASS can range from tens to hundreds of millions of dollars, depending on the duration, scope, and complexity. Contracts for system development, initial fielding, and sustainment often represent significant investments. Given that this contract covers 'UASS and predeployment readiness activities' over a period of 546 days (approximately 1.5 years), the $237 million figure suggests a substantial undertaking. It is likely within the expected range for a contract of this magnitude, especially considering the specialized nature of unmanned systems and the critical requirement for operational readiness.
What are the primary risks associated with this firm-fixed-price contract for cargo UASS and readiness activities?
The primary risks associated with this firm-fixed-price contract, despite its cost-certainty benefits, revolve around potential impacts on quality and scope if not managed meticulously. While the fixed price incentivizes the contractor to control costs, there's a risk that aggressive cost-cutting measures could compromise the quality of services or the reliability of the UASS systems during critical readiness activities. Another risk is scope creep; if the predeployment readiness activities evolve or expand beyond the initial understanding, managing changes within a fixed-price structure can lead to disputes or require contract modifications. Furthermore, unforeseen technical challenges or logistical hurdles specific to UASS operations in diverse environments could strain the contractor's ability to meet performance requirements within the fixed budget, potentially impacting readiness timelines.
How effective is the firm-fixed-price contract type in ensuring program effectiveness for readiness activities?
The firm-fixed-price (FFP) contract type is generally considered effective for ensuring program effectiveness when the scope of work is well-defined and risks are understood. For readiness activities, where timely and reliable execution is paramount, FFP provides a strong incentive for the contractor to perform efficiently and meet specified outcomes. It shifts the cost risk to the contractor, encouraging them to manage resources effectively to achieve the defined objectives within the agreed price. This can lead to greater predictability in spending and a clearer focus on deliverables. However, the effectiveness hinges on the government's ability to precisely define the required readiness standards and performance metrics. If the scope is ambiguous or prone to change, an FFP contract might stifle necessary flexibility, potentially hindering effectiveness if adaptations are required.
What are the historical spending patterns for cargo UASS and predeployment readiness activities within the Department of the Navy?
Analyzing historical spending patterns for cargo UASS and predeployment readiness activities within the Department of the Navy requires access to detailed historical contract data. Generally, spending in this area has been increasing over the past decade due to the growing emphasis on unmanned systems across all military branches. The Navy, in particular, has been investing in autonomous capabilities for various roles, including intelligence, surveillance, reconnaissance (ISR), and logistics. Predeployment readiness activities are a continuous requirement, involving training, maintenance, and system checks to ensure platforms are mission-ready. While specific dollar figures for this niche category are not readily available without deep data dives, it's reasonable to infer that spending has been consistent and likely growing, reflecting the strategic importance placed on UASS and maintaining a high state of operational readiness for all assets.
What is the significance of the contract being awarded in Arizona (AZ) for scheduled freight air transportation?
The significance of the contract being awarded in Arizona (AZ) for scheduled freight air transportation, with the prime contractor being The Boeing Company, likely relates to the presence of key Boeing facilities, operational bases, or logistical hubs within the state. Arizona has a significant aerospace and defense industry presence, including manufacturing, testing, and support operations. For scheduled freight air transportation related to UASS and readiness, Arizona's climate and infrastructure may offer advantages for testing, training, or staging operations. The specific location could indicate where the primary performance or logistical support activities will be based, potentially leveraging existing Boeing infrastructure or specialized training grounds in the region. It suggests a strategic choice for operational efficiency or resource availability.
Industry Classification
NAICS: Transportation and Warehousing › Scheduled Air Transportation › Scheduled Freight Air Transportation
Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRANSPORTATION OF THINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0001910R0020
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: THE Boeing Company (UEI: 009256819)
Address: 5000 E MCDOWELL ROAD, MESA, AZ, 04
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $23,700,000
Exercised Options: $23,700,000
Current Obligation: $23,700,000
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2010-12-02
Current End Date: 2012-05-31
Potential End Date: 2012-05-31 00:00:00
Last Modified: 2012-10-05
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