Boeing awarded $38.8M contract for search, detection, navigation, guidance, and control systems

Contract Overview

Contract Amount: $38,770,931 ($38.8M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2012-06-25

End Date: 2014-05-30

Contract Duration: 704 days

Daily Burn Rate: $55.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: ECP 6381SOWR1

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $38.8 million to THE BOEING COMPANY for work described as: ECP 6381SOWR1 Key points: 1. Contract awarded on a sole-source basis, limiting competitive pricing benefits. 2. Cost-plus incentive fee structure may incentivize performance but requires careful oversight. 3. Contract duration of 704 days suggests a significant project scope. 4. The contract falls under the manufacturing of navigation and guidance systems. 5. Awarded by the Defense Contract Management Agency, indicating a defense-related need. 6. No small business set-aside was applied, potentially impacting small business participation.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without detailed cost breakdowns and comparison to similar sole-source awards. The cost-plus incentive fee (CPIF) structure suggests that the government aims to control costs while incentivizing contractor performance. However, the absence of competition inherently limits the government's ability to secure the lowest possible price. Further analysis would require understanding the specific performance metrics and incentive targets tied to the 'INCENTIVE FEE' portion of the contract.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the requirement. The lack of competition means that price discovery through market forces was not utilized, potentially leading to a higher price than if multiple bids were solicited.

Taxpayer Impact: Taxpayers may not have received the benefit of competitive pricing, as the government could not leverage multiple offers to drive down costs. The justification for the sole-source award would need to be robust to ensure the expenditure was necessary and justified.

Public Impact

The primary beneficiaries are likely the Department of Defense, receiving critical navigation and guidance systems. Services delivered include the manufacturing and potential integration of advanced system components. The geographic impact is primarily tied to the contractor's facilities in Missouri. Workforce implications include employment opportunities within The Boeing Company and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Cost-plus contracts can lead to cost overruns if not managed tightly.
Lack of transparency in sole-source justifications can obscure true necessity.
Limited visibility into performance incentives and their effectiveness.
No small business participation noted, missing opportunities for economic inclusion.

Positive Signals

Contract awarded to a major defense contractor with established capabilities.
CPIF structure aims to align contractor incentives with government objectives.
Contract duration suggests a significant and potentially complex project.
Awarded by a specialized agency (DCMA) implying adherence to defense procurement standards.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on the production of advanced navigation and guidance systems. This is a highly specialized area characterized by significant R&D investment, long product development cycles, and stringent quality and performance requirements. The market is dominated by a few large, established players like Boeing, often securing contracts through sole-source or limited competition due to unique technological expertise and existing government relationships. Comparable spending benchmarks would be difficult to establish without access to proprietary cost data for similar sole-source awards.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. This means that opportunities for small businesses to directly participate in this contract are limited. The absence of a set-aside or explicit subcontracting plan may result in a missed opportunity to leverage the innovation and agility of the small business sector within the defense supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the purview of the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance with contract terms, quality standards, and delivery schedules. The cost-plus incentive fee structure necessitates rigorous financial oversight to monitor incurred costs and verify the achievement of performance incentives. Transparency regarding the justification for the sole-source award and the specific performance metrics tied to the incentive fee would be key areas for public accountability.

Related Government Programs

Defense Contract Management Agency Operations
Aerospace System Manufacturing
Navigation and Guidance Systems
Cost-Plus Incentive Fee Contracts
Sole-Source Defense Procurements

Risk Flags

Sole-source award
Cost-plus contract type
Lack of small business participation noted

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.8 million to THE BOEING COMPANY. ECP 6381SOWR1

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 $38.8 million.

What is the period of performance?

Start: 2012-06-25. End: 2014-05-30.

What is the specific justification for awarding this contract on a sole-source basis to The Boeing Company?

The provided data indicates the contract was 'NOT COMPETED,' signifying a sole-source award. The specific justification for this sole-source determination is not detailed in the data. Typically, sole-source awards are justified under circumstances such as unique technical capabilities, proprietary data, urgent and compelling needs where only one source can reasonably satisfy the requirement, or when a follow-on contract to a previously competed award where only the original contractor can provide the necessary supplies or services. Without the official justification document (e.g., a Justification and Approval - J&A), it's impossible to ascertain the precise rationale. This lack of competition means taxpayers may not have benefited from potential cost savings that could arise from a competitive bidding process.

How does the Cost Plus Incentive Fee (CPIF) structure typically function, and what are the potential risks and benefits for the government in this contract?

A Cost Plus Incentive Fee (CPIF) contract is a type of cost-reimbursement contract where the contractor is reimbursed for all allowable costs and receives a target fee, but the final fee is adjusted based on performance against pre-determined targets (e.g., cost, schedule, or technical performance). For the government, the benefit is incentivizing the contractor to meet or exceed specific performance goals, potentially leading to better outcomes or cost savings compared to a fixed-price contract if targets are challenging. The risk lies in the potential for cost overruns if the targets are not met or if the incentive structure is poorly designed. Effective oversight is crucial to ensure the targets are appropriate and that the contractor is genuinely motivated by the incentives rather than simply maximizing profit through cost escalation.

What is the historical spending pattern for similar navigation and guidance system manufacturing contracts awarded by the Department of Defense?

Analyzing historical spending patterns for similar navigation and guidance system manufacturing contracts requires access to a comprehensive database of federal procurement data. While this specific contract is for approximately $38.8 million, broader trends in this sector are influenced by defense modernization priorities, technological advancements, and geopolitical factors. Contracts in this category can range from tens of millions to billions of dollars, often awarded to major aerospace and defense contractors. Sole-source awards are not uncommon in this specialized field due to the high barriers to entry and proprietary technologies involved. Understanding the historical average cost per unit, contract durations, and the prevalence of different contract types (fixed-price vs. cost-reimbursement) would provide valuable context for assessing the value and necessity of this particular award.

What is The Boeing Company's track record with the Department of Defense, particularly concerning contracts of this nature?

The Boeing Company is a major, long-standing defense contractor with an extensive track record of delivering a wide array of products and services to the Department of Defense (DoD). They are involved in aircraft manufacturing, defense systems, space exploration, and more. Their history with the DoD includes numerous large-scale contracts, some of which have faced scrutiny regarding cost, schedule, and performance. For contracts related to navigation, guidance, and control systems, Boeing has a significant presence, leveraging decades of experience and technological development. Assessing their specific track record for this type of contract would involve reviewing past performance evaluations, any contract disputes or terminations, and their overall success rate in meeting DoD requirements within budget and schedule constraints.

Given the sole-source nature, how can the government ensure this contract represents good value for taxpayer money?

Ensuring good value on a sole-source contract requires robust government oversight and negotiation. The government must meticulously validate the necessity of the sole-source justification and conduct thorough price analysis, even without competitive bids. This involves benchmarking against similar sole-source procurements, analyzing the contractor's cost proposals in detail, and potentially negotiating profit margins and incentive targets aggressively. The Cost Plus Incentive Fee (CPIF) structure itself is a tool for value, provided the incentives are well-defined and aligned with critical performance objectives. Strong contract administration by the Defense Contract Management Agency (DCMA) is essential to monitor costs, track progress, and ensure the contractor is delivering on all aspects of the agreement. Transparency in reporting and regular performance reviews are also key.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001912R0030

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

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

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: $46,796,335

Exercised Options: $39,866,430

Current Obligation: $38,770,931

Actual Outlays: $9,462

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline