Boeing awarded $108.7M contract for High Altitude Anti-Submarine Warfare (HAAWC) Weapon System

Contract Overview

Contract Amount: $108,721,431 ($108.7M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2013-04-03

End Date: 2022-09-30

Contract Duration: 3,467 days

Daily Burn Rate: $31.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: DETAILED DESIGN AND DEVELOPMENT, AND ASSOCIATED SUPPLIES AND SERVICES, OF HAAWC ALA ASSETS.

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $108.7 million to THE BOEING COMPANY for work described as: DETAILED DESIGN AND DEVELOPMENT, AND ASSOCIATED SUPPLIES AND SERVICES, OF HAAWC ALA ASSETS. Key points: 1. Contract awarded to a single, large defense contractor, indicating a specialized capability. 2. The contract type (Cost Plus Incentive Fee) suggests a need for performance-based incentives in a complex development. 3. A long contract duration of 3467 days points to a multi-year, complex development and sustainment effort. 4. The contract falls under the Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing NAICS code. 5. The award was made under full and open competition, suggesting a broad market search. 6. The contract is for the development and production of advanced anti-submarine warfare assets.

Value Assessment

Rating: good

The contract value of $108.7 million for the development and production of advanced anti-submarine warfare assets appears reasonable given the complexity and duration. While specific cost breakdowns are not provided, the Cost Plus Incentive Fee (CPIF) structure suggests an effort to control costs through performance incentives. Benchmarking against similar advanced weapon system development contracts would provide a more precise value assessment, but the scale of the HAAWC system implies significant R&D and manufacturing investment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that the Department of the Navy sought proposals from all responsible sources. The presence of 3 bidders suggests a competitive environment for this specialized defense system. The level of competition, while not extremely high, is sufficient to provide price discovery and encourage competitive proposals for a complex technological system.

Taxpayer Impact: Full and open competition ensures that taxpayers benefit from a range of potential solutions and pricing, driving value for money in the procurement of critical defense capabilities.

Public Impact

The primary beneficiaries are the U.S. Navy warfighters who will receive advanced capabilities for anti-submarine warfare. The contract delivers the High Altitude Anti-Submarine Warfare (HAAWC) Weapon System, enhancing naval defense capabilities. The geographic impact is primarily within the United States, involving research, development, and manufacturing facilities. Workforce implications include employment for engineers, technicians, and manufacturing personnel within the defense industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Incentive Fee contracts if performance targets are not met efficiently.
Long contract duration increases the risk of technological obsolescence or changing defense requirements.
Reliance on a single prime contractor for a critical defense system can create single-source dependency risks.

Positive Signals

Award under full and open competition suggests a robust process for selecting the best value.
The use of an incentive fee structure encourages contractor performance and efficiency.
The HAAWC system addresses a critical national security need, indicating strategic importance and potential for high impact.

Sector Analysis

The defense sector, particularly in aerospace and advanced weapon systems, is characterized by high R&D investment, long product lifecycles, and significant government procurement. This contract for the HAAWC weapon system fits within the specialized segment of naval aviation and anti-submarine warfare technology. The market is dominated by a few large prime contractors capable of undertaking such complex development efforts. Comparable spending benchmarks would likely involve other major defense acquisition programs for advanced aircraft, missiles, or sensor systems.

Small Business Impact

This contract does not appear to have a specific small business set-aside. However, large defense contracts often involve significant subcontracting opportunities for small businesses that provide specialized components, services, or manufacturing support. The prime contractor, Boeing, will likely engage a network of suppliers, potentially including small businesses, to fulfill the contract requirements.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and program management offices. Accountability measures are built into the Cost Plus Incentive Fee structure, linking contractor profit to performance metrics. Transparency is facilitated through contract award databases and reporting requirements. The Inspector General for the Department of Defense would have jurisdiction for audits and investigations related to potential fraud, waste, or abuse.

Related Government Programs

Naval Aviation Programs
Anti-Submarine Warfare Systems
Advanced Weapon Development
Department of Defense Procurement
Aerospace Manufacturing Contracts

Risk Flags

Long contract duration increases risk of technological obsolescence.
CPIF contracts require diligent oversight to manage costs effectively.
Potential for requirements creep over the extended contract period.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $108.7 million to THE BOEING COMPANY. DETAILED DESIGN AND DEVELOPMENT, AND ASSOCIATED SUPPLIES AND SERVICES, OF HAAWC ALA ASSETS.

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 $108.7 million.

What is the period of performance?

Start: 2013-04-03. End: 2022-09-30.

What is the historical spending trend for the HAAWC program or similar anti-submarine warfare systems?

Historical spending data for the HAAWC program specifically is not readily available in the provided context. However, anti-submarine warfare (ASW) systems represent a consistent and significant investment area for naval forces globally due to evolving submarine threats. Major naval powers allocate substantial budgets towards ASW platforms, sensors, and weapons. For instance, the U.S. Navy's annual budget consistently includes billions of dollars for ASW capabilities, encompassing everything from maritime patrol aircraft and surface escorts to advanced sonar systems and torpedoes. The development and procurement of specialized systems like HAAWC are part of this broader, ongoing investment strategy to maintain technological superiority in undersea warfare. Analyzing past ASW procurements can reveal trends in technology adoption, cost escalation, and program durations, providing context for the current HAAWC contract.

How does the Cost Plus Incentive Fee (CPIF) structure typically impact contractor performance and final cost for complex defense systems?

The Cost Plus Incentive Fee (CPIF) contract type is designed for situations where the final costs are uncertain, but performance objectives can be clearly defined. In this structure, the contractor is reimbursed for allowable costs and receives a fixed fee, but the fee is adjusted based on whether the final cost is below or above a target cost. This incentivizes the contractor to control costs and meet performance targets efficiently. For complex defense systems like the HAAWC, CPIF aims to balance the government's need for flexibility with the contractor's motivation to perform well and manage resources effectively. However, it also requires robust government oversight to ensure costs are reasonable and performance metrics are accurately assessed. If the contractor significantly exceeds target costs without commensurate performance gains, the government may still end up paying more than anticipated, though the incentive fee mechanism aims to mitigate this risk.

What are the key performance indicators (KPIs) likely used in this CPIF contract for the HAAWC system?

For a complex defense system like the High Altitude Anti-Submarine Warfare (HAAWC) Weapon System, key performance indicators (KPIs) within a Cost Plus Incentive Fee (CPIF) contract would likely focus on technical performance, schedule adherence, and potentially reliability or maintainability. Technical KPIs could include metrics related to the system's detection range, accuracy, altitude ceiling, weapon deployment effectiveness, and integration with existing naval platforms. Schedule KPIs would track progress against key development milestones and the overall delivery timeline. Reliability and maintainability metrics might assess the system's Mean Time Between Failures (MTBF) or ease of servicing. The specific KPIs would be detailed in the contract's Statement of Work and would directly influence the incentive fee earned by the contractor, driving focus on achieving desired outcomes.

What is The Boeing Company's track record with developing and delivering similar advanced weapon systems for the U.S. Navy?

The Boeing Company has a long and extensive track record of developing and delivering advanced weapon systems and platforms for the U.S. Navy and other branches of the U.S. military. They are a major defense contractor with significant expertise in aerospace, electronics, and integrated systems. Past programs include the P-8A Poseidon maritime patrol aircraft (which has ASW capabilities), various missile systems, and upgrades to existing naval aircraft. Boeing's experience with complex, large-scale defense programs suggests a strong capability to manage the technical and logistical challenges associated with developing and producing systems like the HAAWC. Their history includes both successful program deliveries and, like many large defense contractors, instances of program challenges or cost adjustments, underscoring the importance of robust contract management and oversight.

How does the HAAWC system contribute to the broader U.S. Navy's anti-submarine warfare strategy?

The High Altitude Anti-Submarine Warfare (HAAWC) Weapon System is designed to enhance the U.S. Navy's anti-submarine warfare (ASW) capabilities by providing a long-range, high-altitude standoff weapon. This allows naval assets, potentially including aircraft or other platforms, to detect and engage submarines from a safer distance, reducing risk to the platform and crew. In an era where submarines are becoming increasingly stealthy and capable, systems like HAAWC are crucial for maintaining undersea dominance. It complements existing ASW assets by offering a new method of attack, potentially increasing the survivability of naval forces and the effectiveness of ASW operations in contested environments. The system's development signifies the Navy's commitment to modernizing its ASW arsenal to counter evolving threats.

What are the potential risks associated with the long duration (3467 days) of this contract?

A contract duration of 3467 days (approximately 9.5 years) for the development and production of a weapon system carries several inherent risks. Firstly, technological obsolescence is a significant concern; advancements in sensor technology, counter-measures, or even submarine capabilities could render the HAAWC system less effective or outdated before its full lifecycle is realized. Secondly, requirements creep is a common issue in long-duration programs, where evolving operational needs or strategic shifts might necessitate costly modifications to the system's design or capabilities. Thirdly, economic and political factors can change over such a long period, potentially impacting funding levels or program priorities. Finally, maintaining contractor focus and institutional knowledge over nearly a decade can be challenging, potentially leading to knowledge gaps or reduced efficiency as personnel change.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: WEAPONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0002412R6400

Offers Received: 3

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: $128,520,818

Exercised Options: $120,281,959

Current Obligation: $108,721,431

Actual Outlays: $2,144,448

Subaward Activity

Number of Subawards: 27

Total Subaward Amount: $6,723,040

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline