Boeing awarded $31.16M for Joint Common Test Set (JCTS) in Australia, a sole-source definitive contract

Contract Overview

Contract Amount: $31,163,978 ($31.2M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2015-03-06

End Date: 2020-09-30

Contract Duration: 2,035 days

Daily Burn Rate: $15.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: JOINT COMMON TEST SET (JCTS)-AUSTRALIA

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $31.2 million to THE BOEING COMPANY for work described as: JOINT COMMON TEST SET (JCTS)-AUSTRALIA Key points: 1. Contract awarded to a single vendor suggests potential lack of competitive pressure on pricing. 2. The firm fixed-price contract type shifts cost risk to the contractor, potentially leading to higher initial bids. 3. Long contract duration of over 5 years may indicate a need for sustained support or evolving requirements. 4. The contract falls under Guided Missile and Space Vehicle Manufacturing, a specialized defense sector. 5. Awarded by the Department of the Navy, indicating a specific military application for the test set.

Value Assessment

Rating: fair

Benchmarking the value of this $31.16 million contract is challenging without specific details on the Joint Common Test Set (JCTS) capabilities and the market for such specialized equipment. However, as a sole-source award, there's a risk that the price may not reflect the most competitive market rate. The firm fixed-price structure means the government is committed to the price, and the absence of competition limits direct comparison to other offerings.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of the Navy did not solicit bids from multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, technology, or security clearances. The lack of competition means there was no direct price discovery through a bidding process, potentially leading to a higher cost than if multiple companies had competed.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without competing offers, it's difficult to ascertain if the negotiated price represents the best value achievable in a competitive market.

Public Impact

The primary beneficiaries are likely U.S. military personnel and potentially allied forces in Australia requiring the Joint Common Test Set. The contract supports the delivery of specialized testing equipment crucial for the maintenance and readiness of guided missiles and space vehicles. Geographic impact is focused on U.S. defense operations and support infrastructure in Australia. Workforce implications may include specialized technical roles for installation, maintenance, and support of the test sets.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Long contract duration could lead to cost overruns if requirements change or technology becomes obsolete.
Lack of transparency in the sole-source justification process can obscure potential inefficiencies.

Positive Signals

Firm fixed-price contract shifts cost risk to the contractor, protecting the government from cost overruns.
Award to a single, established vendor like Boeing suggests a high degree of technical capability and reliability.
The contract supports critical defense infrastructure, ensuring operational readiness.

Sector Analysis

The defense sector, particularly within guided missile and space vehicle manufacturing, is characterized by high barriers to entry due to specialized technology, stringent security requirements, and significant R&D investment. Contracts in this area often involve complex systems requiring extensive testing and validation. Spending benchmarks are highly specific to the type of equipment and its strategic importance, making broad comparisons difficult. This contract fits within the niche of specialized defense testing equipment.

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 corporation. There is no explicit information regarding subcontracting plans for small businesses within this award. Therefore, the direct impact on the small business ecosystem from this specific contract is likely minimal, unless Boeing actively engages small businesses for support services not detailed in the award data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a definitive contract, it is subject to standard federal procurement regulations and oversight. Transparency is limited by the sole-source nature of the award. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse, but specific oversight mechanisms beyond standard contract administration are not detailed in the provided data.

Related Government Programs

Guided Missile Manufacturing
Space Vehicle Manufacturing
Defense Test Equipment
Foreign Military Sales Support
Naval Aviation Systems

Risk Flags

Sole-source award
Potential for uncompetitive pricing
Long contract duration
Specialized defense technology

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.2 million to THE BOEING COMPANY. JOINT COMMON TEST SET (JCTS)-AUSTRALIA

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 $31.2 million.

What is the period of performance?

Start: 2015-03-06. End: 2020-09-30.

What is the specific function and technical capability of the Joint Common Test Set (JCTS) being procured?

The Joint Common Test Set (JCTS) is a sophisticated diagnostic and testing system designed to support a wide range of U.S. military aircraft and weapon systems. Its primary function is to provide automated testing capabilities for avionics, weapons, and other complex electronic systems, enabling maintainers to quickly identify faults and ensure operational readiness. The JCTS is modular and adaptable, allowing it to be updated to support new platforms and technologies. Specific technical capabilities would include high-speed data acquisition, signal generation, fault isolation, and data logging, all within a ruggedized form factor suitable for deployment in various operational environments, including potentially austere locations like Australia.

How does the $31.16 million award compare to historical spending on similar test sets or related defense electronics?

Comparing the $31.16 million award for the JCTS to historical spending is difficult without knowing the exact scope and quantity of units procured under this specific contract. However, specialized defense testing equipment can range significantly in price based on complexity and capabilities. For instance, advanced avionics test sets for fighter jets can cost hundreds of thousands to millions of dollars per unit. If this award covers multiple units, software licenses, training, and long-term support for the JCTS in Australia, the total value might be within a reasonable range for such a critical and specialized capability. However, the sole-source nature prevents a direct cost-per-unit comparison with competitively procured alternatives.

What are the key risks associated with a sole-source award for critical defense equipment like the JCTS?

The primary risk associated with a sole-source award for critical defense equipment like the JCTS is the potential for inflated pricing due to the lack of competition. Without competing bids, the government has less leverage to negotiate the best possible price. Another risk is vendor lock-in, where the government becomes dependent on a single supplier, potentially limiting future flexibility in upgrades, maintenance, or sourcing alternative solutions. Furthermore, sole-source contracts can sometimes indicate a lack of adequate market research or planning, or that the technology is so unique that only one provider can meet the requirement, which itself can be a strategic risk if that provider faces financial or operational difficulties.

What is The Boeing Company's track record in delivering complex defense testing systems and managing sole-source contracts?

The Boeing Company has a long and extensive track record of delivering complex defense systems, including avionics, weapon platforms, and associated support equipment, to the U.S. military and international partners. They are a major defense contractor with significant experience in manufacturing, integration, and sustainment. Regarding sole-source contracts, Boeing, like other large defense primes, has been awarded numerous sole-source contracts over the years, often for unique capabilities, follow-on production, or specialized support where competition is limited. While their overall performance is generally robust, the specifics of their past sole-source awards, including pricing and delivery performance, would require a deeper dive into contract databases and performance reports.

What are the implications of the contract's duration (2035 days, approx. 5.6 years) for program sustainment and potential obsolescence?

A contract duration of approximately 5.6 years for the Joint Common Test Set (JCTS) suggests a need for sustained support, maintenance, and potentially upgrades over a significant period. This duration is not unusually long for complex defense systems that require ongoing operational readiness. The implications include ensuring that the contractor, Boeing, provides reliable sustainment services throughout this period. A key consideration is managing technological obsolescence; defense electronics can become outdated relatively quickly. The contract terms should ideally include provisions for addressing obsolescence, such as upgrade paths or technology refresh cycles, to ensure the JCTS remains effective and interoperable with evolving military platforms and threats over its lifespan.

How does this contract align with broader U.S. defense strategies concerning interoperability and support in the Pacific region?

This contract aligns with broader U.S. defense strategies by enhancing the operational readiness and interoperability of key military assets, specifically guided missiles and space vehicles, within the Pacific region, particularly in Australia. Providing advanced testing capabilities locally reduces reliance on stateside support, enabling faster turnaround times for maintenance and repairs. This is crucial for maintaining a forward-deployed presence and ensuring allies can effectively operate and maintain U.S.-provided equipment. The investment in specialized test sets like the JCTS supports the U.S. military's focus on maintaining technological superiority and readiness in a strategically important theater.

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: N0001913R0076

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, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $31,697,858

Exercised Options: $31,163,978

Current Obligation: $31,163,978

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline