DoD Awards Boeing $181M for IRST Block II Phase II NRE, Raising Oversight Concerns
Contract Overview
Contract Amount: $180,938,008 ($180.9M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2018-08-17
End Date: 2025-02-28
Contract Duration: 2,387 days
Daily Burn Rate: $75.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: IRST BLOCK II PHASE II NRE
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $180.9 million to THE BOEING COMPANY for work described as: IRST BLOCK II PHASE II NRE Key points: 1. Significant investment in advanced sensor technology for naval aviation. 2. Sole-source award to Boeing raises questions about competition and price discovery. 3. Long contract duration (2018-2025) with cost-plus incentive fee structure warrants close monitoring. 4. Potential for cost overruns due to the nature of the contract type and NRE. 5. Sector focus on advanced aerospace manufacturing and defense systems.
Value Assessment
Rating: questionable
The contract's cost-plus incentive fee structure, combined with its sole-source nature, makes a direct pricing assessment against similar contracts challenging. The high value suggests a need for robust cost validation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive process.
Taxpayer Impact: The lack of competition for this substantial contract may result in taxpayers paying a premium for the required services and components.
Public Impact
Enhances naval aviation capabilities with advanced infrared search and track technology. Supports a major defense contractor, potentially impacting jobs and the aerospace supply chain. Long-term commitment raises questions about the evolving technological landscape and potential obsolescence.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus incentive fee contract
- Long contract duration
- No small business participation noted
Positive Signals
- Critical technology development
- Supports a key defense contractor
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts and auxiliary equipment. Spending benchmarks in this area are highly variable due to R&D intensity and specialized requirements.
Small Business Impact
There is no indication of small business participation in this contract. Given the sole-source nature and the prime contractor, opportunities for small businesses may be limited unless subcontracted.
Oversight & Accountability
The sole-source award and cost-plus incentive fee structure necessitate strong oversight to ensure cost control and prevent potential overruns. Regular audits and performance reviews are crucial.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition
- Cost-plus contract type
- Potential for cost overruns
- Long contract duration
- No small business participation
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, mo, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $180.9 million to THE BOEING COMPANY. IRST BLOCK II PHASE II 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 $180.9 million.
What is the period of performance?
Start: 2018-08-17. End: 2025-02-28.
What is the justification for the sole-source award, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities or critical national security needs that only one contractor can meet. However, without detailed documentation, it's difficult to assess the thoroughness of the price reasonableness analysis. Agencies should provide clear justifications and evidence of market research to support such decisions.
How will the cost-plus incentive fee structure be managed to mitigate risks of cost overruns and ensure contractor efficiency?
Managing a cost-plus incentive fee contract requires rigorous oversight of incurred costs and performance metrics. The government must establish clear targets and share ratios for cost savings and overruns. Regular audits, performance reviews, and transparent communication with the contractor are essential to incentivize efficiency and control spending.
What is the long-term strategic value of the IRST Block II system, and how does it align with evolving threats and technological advancements?
The long-term value of the IRST Block II system depends on its effectiveness in detecting and tracking threats in complex environments, especially against stealthier adversaries. Its alignment with evolving threats requires continuous assessment. The program's success hinges on its ability to adapt to new technologies and maintain a relevant capability edge.
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: N0001918R1022
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: $180,938,008
Exercised Options: $180,938,008
Current Obligation: $180,938,008
Actual Outlays: $20,401,494
Subaward Activity
Number of Subawards: 28
Total Subaward Amount: $143,460,786
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2018-08-17
Current End Date: 2025-02-28
Potential End Date: 2025-02-28 00:00:00
Last Modified: 2025-05-01
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