DoD Awards Boeing $197.6M for SLAM-ER Missile Production, Facing Limited Competition
Contract Overview
Contract Amount: $197,603,472 ($197.6M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2018-04-01
End Date: 2020-04-17
Contract Duration: 747 days
Daily Burn Rate: $264.5K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: SLAM-ER PHASE I
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63131
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $197.6 million to THE BOEING COMPANY for work described as: SLAM-ER PHASE I Key points: 1. Significant contract value of $197.6 million for missile manufacturing. 2. Sole-source award to Boeing indicates limited competition, potentially impacting price. 3. Risk associated with reliance on a single supplier for critical defense hardware. 4. Spending falls within the Defense sector, specifically guided missile manufacturing.
Value Assessment
Rating: fair
The contract type is Cost Plus Incentive Fee, which can lead to cost overruns if not managed carefully. Without a competitive benchmark, assessing the fairness of the $197.6 million price is challenging.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning there was no open competition. This significantly limits price discovery and may result in a higher cost to the government.
Taxpayer Impact: The lack of competition for this sole-source award raises concerns about the efficient use of taxpayer funds, as a potentially lower price may not have been achieved.
Public Impact
Ensures continued production of a key missile system for the Navy. Potential for increased costs due to the absence of competitive bidding. Supports a major defense contractor, contributing to jobs in Missouri.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition.
- Cost-plus contract type carries inherent cost escalation risk.
- Lack of publicly available cost data hinders value assessment.
Positive Signals
- Ensures supply of critical defense asset.
- Supports established defense industrial base.
Sector Analysis
This contract falls under the Defense sector, specifically the manufacturing of guided missiles. Spending in this sub-sector is often characterized by high R&D costs, long production cycles, and significant reliance on a few specialized contractors.
Small Business Impact
The contract was awarded to The Boeing Company, a large prime contractor. There is no indication of subcontracting opportunities for small businesses in the provided data.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure cost controls and performance metrics are rigorously monitored by the Department of the Navy.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award
- Cost Plus Incentive Fee contract type
- Lack of publicly available cost data
- Long contract duration (747 days)
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 $197.6 million to THE BOEING COMPANY. SLAM-ER PHASE I
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 $197.6 million.
What is the period of performance?
Start: 2018-04-01. End: 2020-04-17.
What is the justification for the sole-source award of the SLAM-ER missile production contract to Boeing?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the absence of other capable sources. For the SLAM-ER, it's likely due to Boeing's exclusive knowledge and manufacturing capabilities for this specific, advanced missile system, making competition impractical or impossible.
What are the primary risks associated with this Cost Plus Incentive Fee (CPIF) contract for SLAM-ER production?
The primary risks with a CPIF contract include potential cost overruns if the incentive targets are not met or if the base cost is underestimated. The government bears the risk of higher-than-expected costs, while Boeing is incentivized to control costs to achieve a higher profit margin. Effective oversight is crucial.
How does the lack of competition impact the long-term effectiveness and cost of the SLAM-ER missile system?
The lack of competition for this production phase means the Navy may be paying a premium for the SLAM-ER missiles. Over the long term, this could lead to higher overall program costs and potentially limit the number of units procured. It also reduces pressure on Boeing to innovate for cost reduction.
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 AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0001918R0013
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: $197,603,472
Exercised Options: $197,603,472
Current Obligation: $197,603,472
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2018-04-01
Current End Date: 2020-04-17
Potential End Date: 2020-04-17 00:00:00
Last Modified: 2020-10-02
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