DoD Awards $175.8M for Harpoon Missile Production to Boeing, Raising Concerns Over Limited Competition
Contract Overview
Contract Amount: $175,795,295 ($175.8M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2016-12-21
End Date: 2023-12-31
Contract Duration: 2,566 days
Daily Burn Rate: $68.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: LOT 90 HARPOON PRODUCTION
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $175.8 million to THE BOEING COMPANY for work described as: LOT 90 HARPOON PRODUCTION Key points: 1. Significant contract value for guided missile manufacturing. 2. Sole-source award to Boeing limits competitive pricing. 3. Potential for taxpayer overpayment due to lack of competition. 4. Defense sector spending on advanced weaponry.
Value Assessment
Rating: questionable
The contract value of $175.8 million for Harpoon missile production is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential market rates for similar defense systems.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to The Boeing Company. This lack of competition limits price discovery and may result in higher costs for the government.
Taxpayer Impact: Taxpayer funds may be used inefficiently due to the absence of competitive pressure on pricing for this critical defense asset.
Public Impact
Ensures continued production of a key defense missile system. Potential for higher costs impacts overall defense budget allocation. Lack of competition raises questions about long-term strategic sourcing.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for overpricing
Positive Signals
- Continued production of essential defense equipment
- Contract awarded to a major defense contractor
Sector Analysis
This contract falls within the Defense sector, specifically guided missile manufacturing. Spending benchmarks for similar sole-source missile production contracts are often high, but competitive awards typically yield better value.
Small Business Impact
There is no indication that small businesses were involved in this sole-source contract, suggesting missed opportunities for small business participation in the defense supply chain.
Oversight & Accountability
The Department of Defense, through the Defense Contract Management Agency, oversees this contract. The sole-source nature warrants close scrutiny to ensure fair pricing and effective delivery.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award
- Lack of competition
- Potential for cost overruns
- Limited transparency in pricing
- Missed small business opportunities
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, mo, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $175.8 million to THE BOEING COMPANY. LOT 90 HARPOON PRODUCTION
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 $175.8 million.
What is the period of performance?
Start: 2016-12-21. End: 2023-12-31.
What is the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent national security needs that only one contractor can meet. Without further documentation, it's difficult to ascertain the specific rationale, but it often stems from perceived necessity or a lack of viable alternatives identified by the procuring agency.
How does the lack of competition potentially inflate the cost of the Harpoon missile production?
When a contract is not competed, the government loses the benefit of multiple companies bidding against each other to offer the best price and value. This can lead the sole-source provider to set a higher price than they might under competitive pressure, potentially resulting in inflated costs for taxpayers and a less efficient use of defense funds.
What measures can be taken to ensure the effectiveness and fair pricing of this sole-source contract?
To ensure effectiveness and fair pricing, the procuring agency should conduct thorough cost analyses, benchmark against similar systems, and potentially negotiate stricter performance metrics. Regular reviews and audits are crucial. Exploring future opportunities for competition, even for components or upgrades, should also be a priority to mitigate long-term sole-source risks.
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: N0001916R0067
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: $175,795,295
Exercised Options: $175,795,295
Current Obligation: $175,795,295
Subaward Activity
Number of Subawards: 95
Total Subaward Amount: $65,614,405
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2016-12-21
Current End Date: 2023-12-31
Potential End Date: 2023-12-31 00:00:00
Last Modified: 2024-09-26
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