DoD awards $73.2M for Boeing's DSU-38A/B Laser Guidance Sets, raising concerns over limited competition
Contract Overview
Contract Amount: $73,200,908 ($73.2M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2017-11-01
End Date: 2021-12-31
Contract Duration: 1,521 days
Daily Burn Rate: $48.1K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: DSU-38A/B PRECISION LASER GUIDANCE SET
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $73.2 million to THE BOEING COMPANY for work described as: DSU-38A/B PRECISION LASER GUIDANCE SET Key points: 1. Significant contract value of $73.2 million for specialized defense equipment. 2. Sole reliance on Boeing for this critical component suggests potential market concentration. 3. Limited competition raises questions about price reasonableness and taxpayer value. 4. The sector is characterized by high barriers to entry and specialized manufacturing needs.
Value Assessment
Rating: questionable
The contract value of $73.2 million for the DSU-38A/B Precision Laser Guidance Set appears high given the lack of competitive bidding. Without comparable contracts or a competitive process, it's difficult to definitively assess if the pricing is optimal.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, indicating that only one vendor, The Boeing Company, was considered capable of fulfilling the requirement. This lack of competition limits price discovery and may lead to higher costs for the government.
Taxpayer Impact: The sole-source nature of this award means taxpayers may be paying a premium for the DSU-38A/B Precision Laser Guidance Set, as competitive pressures that typically drive down costs were absent.
Public Impact
Ensures continued availability of critical guidance systems for naval operations. Supports a major defense contractor, potentially impacting jobs and the defense industrial base. Raises questions about the government's strategy for fostering competition in specialized defense markets.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- Potential for overpayment due to lack of price discovery.
- Long contract duration (1521 days) may mask inefficiencies.
Positive Signals
- Provides essential equipment for national defense.
- Leverages established expertise of a key defense contractor.
Sector Analysis
The defense sector, particularly for specialized components like laser guidance sets, often faces challenges with limited competition due to high R&D costs and stringent qualification requirements. Benchmarks are difficult without specific component cost data.
Small Business Impact
This contract was awarded directly to The Boeing Company and there is no indication of subcontracting opportunities for small businesses within the provided data. The focus appears to be on a large, prime contractor.
Oversight & Accountability
The Department of the Navy awarded this contract. Oversight would typically involve contract performance monitoring, quality assurance, and ensuring adherence to the firm fixed price terms. The sole-source nature warrants close scrutiny of pricing justification.
Related Government Programs
- Small Arms, Ordnance, and Ordnance Accessories Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award
- Potential for inflated pricing
- Lack of transparency in price justification
- Long contract duration without clear competitive pressure
Tags
small-arms-ordnance-and-ordnance-accesso, department-of-defense, mo, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $73.2 million to THE BOEING COMPANY. DSU-38A/B PRECISION LASER GUIDANCE SET
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 $73.2 million.
What is the period of performance?
Start: 2017-11-01. End: 2021-12-31.
What is the justification for the sole-source award, and were alternatives explored?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one source can meet the requirement. The Department of the Navy would need to provide documentation detailing the specific reasons why The Boeing Company was the only viable option and if any market research was conducted to identify potential competitors or alternative solutions.
How does the awarded price compare to industry benchmarks for similar laser guidance systems?
Without access to proprietary pricing data from competitors or detailed cost breakdowns from Boeing, a direct comparison is challenging. However, the absence of competition inherently raises concerns about whether the price reflects fair market value. Further analysis would require benchmarking against similar, albeit potentially less advanced, guidance systems or requesting detailed cost proposals from the contractor.
What measures are in place to ensure the effectiveness and reliability of the DSU-38A/B guidance sets under this contract?
Standard government contract oversight includes quality assurance surveillance plans (QASPs) and acceptance testing to ensure delivered items meet specifications. For a sole-source contract, the government might implement more rigorous testing protocols or require detailed performance data from Boeing to validate the effectiveness and reliability of the guidance sets, compensating for the lack of competitive validation.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms, Ordnance, and Ordnance Accessories Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0001914R0044
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: $73,200,908
Exercised Options: $73,200,908
Current Obligation: $73,200,908
Subaward Activity
Number of Subawards: 6
Total Subaward Amount: $54,486,568
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0001916D1002
IDV Type: IDC
Timeline
Start Date: 2017-11-01
Current End Date: 2021-12-31
Potential End Date: 2021-12-31 00:00:00
Last Modified: 2022-08-30
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