Navy awards $77M Boeing contract for LRASM integration, raising concerns about sole-source procurement
Contract Overview
Contract Amount: $77,147,165 ($77.1M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2021-04-21
End Date: 2026-04-20
Contract Duration: 1,825 days
Daily Burn Rate: $42.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: LRASM INTEGRATION NRE
Place of Performance
Location: TUKWILA, KING County, WASHINGTON, 98108
Plain-Language Summary
Department of Defense obligated $77.1 million to THE BOEING COMPANY for work described as: LRASM INTEGRATION NRE Key points: 1. Significant contract value of $77.15 million awarded to a single large business. 2. Sole-source award to Boeing for LRASM integration suggests limited competition. 3. Potential risk associated with lack of competitive bidding impacting price discovery. 4. Spending falls within the Aircraft Engine and Engine Parts Manufacturing sector.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee (CPFF) structure, combined with a sole-source award, makes direct pricing assessment difficult. Benchmarking against similar integration contracts is challenging without competitive data.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to The Boeing Company. The absence of competition limits price discovery and potentially leads to higher costs for the government.
Taxpayer Impact: The lack of competition in this sole-source award may result in taxpayers paying a premium for the LRASM integration services.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. The Navy's reliance on a single contractor for critical integration could pose long-term strategic risks. Lack of transparency in pricing due to sole-source award hinders public scrutiny.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Cost-plus contract type
Positive Signals
- Critical defense system integration
- Award to established prime contractor
Sector Analysis
This contract falls under the Aircraft Engine and Engine Parts Manufacturing sector, which often involves complex, high-value procurements. Benchmarks for integration services within this sector can vary widely, but sole-source awards typically deviate from competitive norms.
Small Business Impact
The contract was awarded to The Boeing Company, a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award, which is common for prime contracts of this nature.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure fair pricing and effective execution. Accountability will be crucial in verifying that the fixed fee aligns with reasonable costs and performance metrics.
Related Government Programs
- Aircraft Engine and Engine Parts Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition.
- Cost-plus contract type can lead to cost overruns.
- Lack of transparency in pricing.
- Potential for vendor lock-in.
- Limited small business participation.
Tags
aircraft-engine-and-engine-parts-manufac, department-of-defense, wa, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $77.1 million to THE BOEING COMPANY. LRASM INTEGRATION 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 $77.1 million.
What is the period of performance?
Start: 2021-04-21. End: 2026-04-20.
What is the justification for the sole-source award, and were alternative competitive strategies considered?
The justification for a sole-source award typically centers on unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Agencies must document these justifications thoroughly. Alternative competitive strategies, such as phased approaches or limited competition among pre-qualified vendors, should be explored before resorting to sole-source procurement to ensure the best value for taxpayers.
How will the government ensure fair and reasonable pricing given the cost-plus fixed fee and sole-source nature of the contract?
Ensuring fair pricing involves rigorous government cost analysis, including reviewing the contractor's proposed costs, historical data, and market research. For CPFF contracts, the fixed fee is negotiated separately and should reflect the level of risk and effort. The government should also establish clear performance metrics and milestones to monitor progress and control costs effectively throughout the contract duration.
What are the potential long-term risks of relying on a single contractor for critical LRASM integration?
Long-term risks include reduced innovation due to lack of competitive pressure, potential vendor lock-in, and increased vulnerability if the sole contractor faces financial or operational difficulties. Dependence on one supplier can also limit the government's flexibility in adapting to future technological advancements or changing strategic requirements, potentially leading to higher sustainment costs.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Engine and Engine Parts Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 6200 JAMES S 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: $78,218,144
Exercised Options: $78,218,144
Current Obligation: $77,147,165
Subaward Activity
Number of Subawards: 5
Total Subaward Amount: $3,802,094
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N0001921G0006
IDV Type: BOA
Timeline
Start Date: 2021-04-21
Current End Date: 2026-04-20
Potential End Date: 2026-04-20 00:00:00
Last Modified: 2025-05-21
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