DoD awards Boeing $84.9M for IRST Block II Phase I NRE, raising concerns about sole-source justification
Contract Overview
Contract Amount: $84,884,884 ($84.9M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2017-05-25
End Date: 2021-07-16
Contract Duration: 1,513 days
Daily Burn Rate: $56.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: IRST BLOCK II PHASE I - NRE
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $84.9 million to THE BOEING COMPANY for work described as: IRST BLOCK II PHASE I - NRE Key points: 1. Significant investment in critical sensor technology for naval aviation. 2. Sole-source award to Boeing limits competitive pricing and innovation. 3. Long contract duration (1513 days) may indicate complex development. 4. Focus on NRE suggests early-stage research and development.
Value Assessment
Rating: questionable
The contract value of $84.9M for NRE is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential market alternatives for similar advanced sensor development.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award to The Boeing Company. This lack of competition limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The absence of competition in this sole-source award means taxpayers may not be receiving the best possible price for this critical technology development.
Public Impact
Enhances naval aviation capabilities with advanced infrared search and track. Potential for technological advancements in airborne surveillance. Sole-source award raises questions about fair pricing and taxpayer value.
Waste & Efficiency Indicators
Waste Risk Score: 56 / 10
Warning Flags
- Sole-source award
- Lack of competition
- High contract value for NRE
Positive Signals
- Critical technology development
- Award to established defense contractor
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, specifically for advanced sensor systems. Spending benchmarks for NRE in this specialized area are difficult to establish due to proprietary technology and R&D focus.
Small Business Impact
The contract was awarded to The Boeing Company, a large prime contractor. There is no indication of small business participation in this specific NRE award, suggesting limited direct impact on SMBs.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the justification for lack of competition is valid and that costs are reasonable and allocable.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award lacks competitive pricing.
- Potential for cost overruns without strong oversight.
- Limited transparency on justification for non-competition.
- Risk of vendor lock-in for future phases.
Tags
aircraft-manufacturing, department-of-defense, mo, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $84.9 million to THE BOEING COMPANY. IRST BLOCK II PHASE I - NRE
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 $84.9 million.
What is the period of performance?
Start: 2017-05-25. End: 2021-07-16.
What is the specific justification for awarding this contract on a sole-source basis, and has it been thoroughly reviewed?
The provided data indicates the contract was 'NOT COMPETED'. A thorough review would require access to the justification documentation (e.g., J&A) to understand why full and open competition was not feasible. This is crucial for validating the necessity of a sole-source award and ensuring taxpayer funds are used appropriately for critical defense capabilities.
How will the government ensure cost control and value for money given the sole-source nature of this contract?
With a sole-source award, cost control relies heavily on robust government negotiation, detailed cost analysis, and potentially incentive fee structures. The 'COST PLUS INCENTIVE FEE' (CPIF) type suggests mechanisms are in place to reward performance and cost efficiency, but diligent oversight is paramount to prevent cost overruns and ensure the final price reflects fair market value.
What are the long-term implications of awarding NRE solely to Boeing for the IRST Block II system?
Sole-source NRE awards can create vendor lock-in and potentially stifle broader industry innovation. While leveraging Boeing's expertise may accelerate development, it could limit future competition for subsequent production phases or upgrades. The government should consider strategies to foster competition in later stages or ensure knowledge transfer.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0001917R0024
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: $84,884,884
Exercised Options: $84,884,884
Current Obligation: $84,884,884
Subaward Activity
Number of Subawards: 10
Total Subaward Amount: $65,581,220
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2017-05-25
Current End Date: 2021-07-16
Potential End Date: 2021-07-16 00:00:00
Last Modified: 2022-07-15
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