DoD awards $161M for IRST EMD to Boeing, raising questions about competition and value

Contract Overview

Contract Amount: $161,012,480 ($161.0M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2011-08-19

End Date: 2016-09-30

Contract Duration: 1,869 days

Daily Burn Rate: $86.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IRST EMD

Place of Performance

Location: SAINT LOUIS, SAINT LOUIS CITY County, MISSOURI, 63166

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $161.0 million to THE BOEING COMPANY for work described as: IRST EMD Key points: 1. The contract was awarded on a sole-source basis, limiting competitive pressure on pricing. 2. The duration of the contract (1869 days) suggests a long-term commitment to this specific solution. 3. The fixed-price contract type shifts some risk to the contractor, but the lack of competition is a concern. 4. The award represents a significant investment in a specific technology for the Department of the Navy. 5. Benchmarking against similar sole-source awards is crucial to assess value for money. 6. The absence of small business set-asides is noted, with no indication of subcontracting plans.

Value Assessment

Rating: questionable

The total award amount of $161,012,480.32 for the IRST EMD (IRST Engineering and Manufacturing Development) contract to The Boeing Company is substantial. Without comparable sole-source awards for similar technology development programs, it is difficult to definitively benchmark the value. However, the lack of competition inherently raises concerns about whether the government achieved the best possible price. The firm fixed-price contract type provides some cost certainty, but the absence of competitive bidding means that the pricing has not been tested against market alternatives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a 'NOT COMPETED' (sole-source) justification. This means that only one source, The Boeing Company, was solicited for this requirement. The lack of a competitive bidding process limits the government's ability to explore alternative solutions and potentially secure more favorable pricing. The justification for a sole-source award would typically involve factors such as unique capabilities, proprietary technology, or the absence of adequate competition.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. The sole-source nature means that the government did not benefit from the price discovery that occurs in a competitive procurement environment.

Public Impact

The primary beneficiaries are the Department of the Navy, which will receive the IRST EMD system. The contract delivers critical technology development for advanced sensor capabilities. The geographic impact is concentrated in Missouri, where The Boeing Company's facility is located. The contract supports specialized engineering and manufacturing jobs within The Boeing Company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Long contract duration (1869 days) may indicate a lack of readily available alternatives or a protracted development cycle.
No small business participation is indicated, potentially excluding smaller innovative firms from contributing.
Lack of transparency regarding the justification for sole-source award requires further scrutiny.

Positive Signals

Firm fixed-price contract shifts cost overrun risk to the contractor.
Award to a major defense contractor like Boeing suggests access to established expertise and manufacturing capabilities.
The contract supports the development of advanced sensor technology, which is critical for national defense.

Sector Analysis

The contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector (NAICS 336413). This sector is characterized by the production of components and accessories for aircraft, engines, and other aerospace equipment. The market size for such specialized components can be significant, driven by defense spending and commercial aviation needs. This specific contract for IRST EMD represents a niche but critical area within aerospace manufacturing, focusing on advanced sensor technology integration.

Small Business Impact

This contract was not competed and there is no indication of small business set-asides (ss: false, sb: false). Consequently, there are no direct subcontracting implications for small businesses stemming from this award. The absence of a competitive process also means that opportunities for small businesses to participate as prime contractors or through subcontracting were not explored.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. The Inspector General of the Department of Defense would have jurisdiction to investigate any potential fraud, waste, or abuse. Transparency regarding the sole-source justification and performance metrics would be key to assessing accountability.

Related Government Programs

IRST Systems
Defense Sensor Technology
Naval Aviation Procurement
Aerospace Manufacturing Contracts
Sole-Source Defense Awards

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Limited transparency on justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $161.0 million to THE BOEING COMPANY. IRST EMD

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 $161.0 million.

What is the period of performance?

Start: 2011-08-19. End: 2016-09-30.

What is the specific technology being developed under the IRST EMD contract, and why was it deemed a sole-source requirement?

The IRST EMD (Infra-Red Search and Track Engineering and Manufacturing Development) contract is for the development of an advanced sensor system designed to detect and track airborne targets using infrared radiation. This technology is crucial for enhancing situational awareness and target identification capabilities, particularly in environments where radar may be less effective or detectable. The sole-source justification for this award to The Boeing Company likely stems from proprietary technology, unique manufacturing capabilities, or a determination that no other source could meet the specific technical requirements within the required timeframe. Detailed documentation supporting this justification would typically be found in the contract's award file, often citing specific technical specifications or the lack of viable alternatives.

How does the $161 million award compare to other sole-source defense contracts for similar technology development programs?

Benchmarking this $161 million award against other sole-source defense contracts for similar technology development is challenging without access to a comprehensive database of comparable procurements. Sole-source awards are, by nature, not subject to direct price competition, making direct value-for-money comparisons difficult. However, the duration of the contract (1869 days, approximately 5 years) suggests a significant development effort. Factors such as the complexity of the technology, the maturity of the design, and the specific performance requirements would influence the cost. A thorough analysis would require comparing the contract's scope, technical requirements, and duration against other sole-source awards for advanced sensor systems or related engineering and manufacturing development programs within the DoD.

What are the key performance indicators (KPIs) or milestones associated with this contract, and how is Boeing's performance being monitored?

The specific Key Performance Indicators (KPIs) and milestones for the IRST EMD contract are not publicly detailed in the provided data. However, for an Engineering and Manufacturing Development (EMD) contract, typical milestones would include design reviews (e.g., Preliminary Design Review - PDR, Critical Design Review - CDR), prototype development, system integration, testing and validation, and final production readiness assessments. Boeing's performance would be monitored through regular progress reports, technical reviews, and adherence to delivery schedules and performance specifications. The contracting officer and technical representatives from the Department of the Navy would be responsible for overseeing these aspects to ensure the program stays on track and meets its objectives.

What is the historical spending pattern for IRST systems or similar technologies by the Department of the Navy or DoD?

Historical spending patterns for IRST systems and similar technologies by the Department of the Navy and the broader DoD indicate a consistent and growing investment in advanced sensor capabilities. While specific figures for IRST EMD prior to this award are not detailed, the military has long recognized the importance of passive infrared detection for air and missile defense. Investments in related areas like targeting pods, missile warning systems, and advanced radar technologies have been substantial over the past decades. The increasing complexity of threats and the desire for multi-spectral sensor fusion suggest that spending in this domain is likely to continue, with EMD contracts like this one representing crucial early-stage investments in future operational capabilities.

What are the potential risks associated with a sole-source award for a critical defense technology like IRST?

The primary risk associated with a sole-source award for a critical defense technology like IRST is the potential for inflated costs due to the lack of competitive pricing. Without competing bids, the government may not achieve the best possible value for its investment. Another risk is technological stagnation; a sole-source provider might have less incentive to innovate aggressively compared to a competitive environment. Furthermore, reliance on a single supplier can create supply chain vulnerabilities and increase dependence on that specific contractor, potentially limiting future flexibility in sourcing or upgrading the technology. Ensuring robust oversight and clear performance metrics becomes even more critical in sole-source situations to mitigate these risks.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001910R0041

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: $161,462,480

Exercised Options: $161,462,480

Current Obligation: $161,012,480

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline