DoD awards $28.9M for Joint Common Test Set, with Boeing as sole source

Contract Overview

Contract Amount: $28,944,357 ($28.9M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2020-09-28

End Date: 2028-11-28

Contract Duration: 2,983 days

Daily Burn Rate: $9.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: JOINT COMMON TEST SET

Place of Performance

Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $28.9 million to THE BOEING COMPANY for work described as: JOINT COMMON TEST SET Key points: 1. Contract awarded on a sole-source basis, raising questions about price competition. 2. Long contract duration (2020-2028) suggests a need for sustained support. 3. Focus on aircraft manufacturing indicates a specialized, high-value defense procurement. 4. Fixed-price contract type aims to control costs, but sole-source nature limits negotiation leverage. 5. The contract's value is significant within its specific defense niche. 6. Performance is expected in Missouri, indicating a specific geographic concentration of work.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source contract is challenging due to the lack of competitive bids. The $28.9 million award over nearly 10 years suggests a substantial investment in specialized test equipment. Without comparable contracts or market data, it's difficult to definitively assess if the pricing represents excellent value for money. The fixed-price nature provides some cost certainty, but the absence of competition means the government may not have achieved the lowest possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning only one vendor, The Boeing Company, was solicited. This approach bypasses the standard competitive bidding process. While sole-source awards can be justified for unique capabilities or urgent needs, they inherently limit price discovery and potentially lead to higher costs for the government compared to a fully competed contract. The lack of multiple bidders means taxpayers do not benefit from the cost-saving pressures of a competitive market.

Taxpayer Impact: The absence of competition means taxpayers may be paying a premium for this equipment and support, as there was no market pressure to drive down the price.

Public Impact

The primary beneficiaries are likely the Department of Defense, specifically the Department of the Navy, receiving critical testing capabilities for aircraft. The contract delivers specialized test equipment essential for maintaining and verifying the performance of defense assets. Geographic impact is concentrated in Missouri, where the work will be performed. Workforce implications may include specialized engineering, manufacturing, and technical support roles within The Boeing Company and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases cost to taxpayers.
Long contract duration could lead to cost overruns if not managed effectively.
Lack of transparency in the sole-source justification process.
Potential for vendor lock-in due to specialized nature of the equipment.

Positive Signals

Fixed-price contract type provides cost certainty for the government.
Award to a major defense contractor like Boeing suggests access to established expertise and technology.
Contract addresses a specific, likely critical, need for the Department of Defense.

Sector Analysis

The defense sector, particularly aircraft manufacturing and support, involves highly specialized and often proprietary technologies. Contracts in this area frequently involve significant research and development costs, complex supply chains, and stringent performance requirements. The market is characterized by a limited number of large prime contractors capable of fulfilling such needs. Spending benchmarks are difficult to establish without direct comparisons, but procurements for complex testing systems can run into tens or hundreds of millions of dollars.

Small Business Impact

This contract does not appear to have a small business set-aside component, as it was awarded sole-source to The Boeing Company. There is no explicit information regarding subcontracting plans for small businesses. Without a competitive bidding process or specific set-aside requirements, the direct impact on the small business ecosystem is likely minimal, and opportunities for small businesses to participate may be limited to Boeing's discretion in its supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. Accountability measures are embedded within the fixed-price contract terms, requiring delivery of specified goods or services. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Aircraft Maintenance and Repair
Defense Test and Evaluation Equipment
Naval Aviation Programs
Sole-Source Defense Procurements

Risk Flags

Sole-source award
Lack of competition
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.9 million to THE BOEING COMPANY. JOINT COMMON TEST 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 $28.9 million.

What is the period of performance?

Start: 2020-09-28. End: 2028-11-28.

What is the specific nature of the 'Joint Common Test Set' and its criticality to naval aviation operations?

The Joint Common Test Set (JCTS) is a crucial piece of equipment designed to test, diagnose, and calibrate various avionics and electronic systems within military aircraft. Its criticality stems from ensuring that these complex systems function correctly, which is paramount for flight safety, mission effectiveness, and overall operational readiness of naval aviation platforms. The 'common' aspect suggests it's intended for use across multiple aircraft types or programs, aiming for standardization and efficiency in testing procedures. Without specific details on the JCTS model or its exact application, it's understood to be a high-technology diagnostic tool essential for maintaining the sophisticated electronic warfare, communication, navigation, and weapons systems found on modern military aircraft.

Why was this contract awarded on a sole-source basis to The Boeing Company?

Sole-source awards are typically justified when only one responsible source is available or capable of meeting the government's needs. For The Boeing Company to be the sole source for the Joint Common Test Set, it likely possesses unique intellectual property, proprietary technology, specialized manufacturing capabilities, or existing infrastructure directly related to this specific test equipment. This could be due to prior development contracts, unique design specifications, or integration requirements with Boeing-manufactured aircraft. The Department of Defense would have had to formally justify this sole-source determination, likely citing reasons such as industrial property, specialized experience, or the need for compatibility with existing Boeing systems, thereby precluding competition from other potential vendors.

How does the fixed-price contract type mitigate risks for the government, despite the sole-source nature?

A Firm Fixed Price (FFP) contract type, even in a sole-source scenario, shifts the risk of cost overruns from the government to the contractor, The Boeing Company. This means Boeing is obligated to deliver the specified Joint Common Test Set and associated services for the agreed-upon price, regardless of their actual costs incurred. While the absence of competition might mean the initial price isn't the lowest possible, the FFP structure provides budget certainty for the Department of the Navy. It incentivizes Boeing to manage its own costs efficiently to maintain profitability. However, the government's ability to negotiate favorable terms is reduced without competitive pressure, and the onus is on the government's initial price negotiation and clear definition of requirements.

What are the potential long-term implications of a sole-source award for specialized defense equipment like the JCTS?

Sole-source awards for specialized defense equipment can have several long-term implications. Firstly, they can lead to higher costs for taxpayers over the life of the contract and subsequent procurements, as competitive market forces are absent. Secondly, they can create vendor lock-in, making it difficult and costly to switch to alternative solutions or suppliers in the future. This is particularly true if the equipment is highly integrated into existing platforms. Thirdly, it may stifle innovation from other potential suppliers who are excluded from the market. While necessary in some cases for unique capabilities, a pattern of sole-source awards can reduce overall market dynamism and potentially increase long-term sustainment costs for the DoD.

Can the $28.9 million contract value be benchmarked against similar defense test equipment procurements?

Benchmarking this $28.9 million contract value against similar defense test equipment procurements is challenging without access to detailed comparative data. The 'Joint Common Test Set' is a specific, likely specialized, piece of equipment, and its value is influenced by factors such as technological sophistication, scope of testing capabilities, integration requirements, and the specific platforms it supports. Sole-source awards inherently lack the transparency of competitive bids, making direct price comparisons difficult. While $28.9 million over nearly ten years (2020-2028) might seem substantial, its true value can only be assessed relative to the unique capabilities it provides and the cost of developing or acquiring equivalent functionality through alternative means, which are not readily available in the public domain.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001919R2632

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: $29,045,441

Exercised Options: $28,944,357

Current Obligation: $28,944,357

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $1,406,100

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0001916G0001

IDV Type: BOA

Timeline