Boeing awarded $25.7M for DDG 76 Shipset, highlighting potential cost concerns in navigation system manufacturing
Contract Overview
Contract Amount: $25,729,393 ($25.7M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2015-03-02
End Date: 2019-12-16
Contract Duration: 1,750 days
Daily Burn Rate: $14.7K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: IGF::OT::IGF GEDMS SHIPSET FOR DDG 76
Place of Performance
Location: HUNTINGTON BEACH, ORANGE County, CALIFORNIA, 92647
Plain-Language Summary
Department of Defense obligated $25.7 million to THE BOEING COMPANY for work described as: IGF::OT::IGF GEDMS SHIPSET FOR DDG 76 Key points: 1. The contract for the DDG 76 Shipset was awarded to The Boeing Company for $25.7 million. 2. Competition was full and open after exclusion of sources, suggesting a specific justification was required. 3. The firm-fixed-price contract type aims to control costs, but the final price relative to value needs scrutiny. 4. The sector is IT/Defense, specifically navigation system manufacturing, a critical component for naval operations.
Value Assessment
Rating: fair
The $25.7 million award for a shipset is difficult to benchmark without specific component details. However, the duration of the contract (1750 days) and the number of awards (2) suggest a significant undertaking. Further analysis is needed to compare the per-unit cost against similar naval system procurements.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'full and open competition after exclusion of sources.' This implies that while competition was sought, specific sources may have been excluded, potentially limiting the breadth of competitive offers and impacting price discovery.
Taxpayer Impact: The final taxpayer impact depends on whether the 'exclusion of sources' led to a suboptimal price compared to a truly open competition. The firm-fixed-price contract aims to mitigate cost overruns.
Public Impact
Naval defense spending represents a significant portion of the federal budget, impacting national security. The procurement of advanced navigation systems is crucial for maintaining fleet readiness and operational effectiveness. The specific exclusion of sources in the competition warrants transparency to ensure fair market value was obtained.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for limited competition due to source exclusion.
- Lack of detailed cost breakdown for unit price assessment.
- Long contract duration could mask cost inefficiencies.
Positive Signals
- Firm-fixed-price contract type.
- Awarded to a major defense contractor with proven capabilities.
Sector Analysis
This contract falls within the Defense sector, specifically the manufacturing of complex navigation and guidance systems for naval vessels. Spending in this area is driven by defense modernization efforts and fleet maintenance requirements. Benchmarks are typically high due to specialized technology and stringent quality standards.
Small Business Impact
The data does not indicate any specific involvement or set-aside for small businesses in this contract. Large prime contractors like Boeing typically manage complex procurements, with subcontracting opportunities for small businesses often determined at their discretion.
Oversight & Accountability
The 'exclusion of sources' clause requires careful oversight to ensure it was justified and did not unduly restrict competition. The Department of the Navy's contracting officers are responsible for ensuring fair and reasonable pricing and adherence to procurement regulations.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Potential for limited competition.
- Lack of detailed cost breakdown.
- Ambiguity in 'exclusion of sources' justification.
- Long contract duration may obscure cost efficiencies.
Tags
search-detection-navigation-guidance-aer, department-of-defense, ca, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $25.7 million to THE BOEING COMPANY. IGF::OT::IGF GEDMS SHIPSET FOR DDG 76
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 $25.7 million.
What is the period of performance?
Start: 2015-03-02. End: 2019-12-16.
What was the specific justification for excluding certain sources in this 'full and open competition'?
The justification for excluding sources typically relates to factors such as proprietary technology, unique capabilities, or specific security requirements that only certain vendors can meet. Without further documentation, it's difficult to ascertain the precise reason. This exclusion could potentially limit the number of bidders and impact the final negotiated price, necessitating a thorough review by the contracting officer to ensure the exclusion was valid and in the government's best interest.
How does the $25.7 million cost compare to similar shipset procurements for naval vessels?
Benchmarking this $25.7 million award requires detailed comparison with contracts for similar shipsets or major system components on comparable naval platforms (e.g., other DDG classes or similar vessels). Factors like system complexity, technological advancements, and the specific components included (e.g., sensors, processors, software) heavily influence cost. A direct comparison is challenging without access to detailed specifications and pricing structures of alternative contracts.
What is the potential risk associated with the long contract duration (1750 days) for this navigation system?
A long contract duration like 1750 days for a navigation system introduces risks such as technological obsolescence, potential for scope creep, and difficulty in maintaining cost control over an extended period. Market conditions and component costs can fluctuate significantly. It also increases the chance of performance issues arising late in the contract. Robust oversight and clear performance metrics are essential to mitigate these risks and ensure the system remains relevant and cost-effective.
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: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: ALTERNATIVE SOURCES
Solicitation ID: N0002415R4204
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 5301 BOLSA AVE, HUNTINGTON BEACH, CA, 92647
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $28,423,786
Exercised Options: $26,311,651
Current Obligation: $25,729,393
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2015-03-02
Current End Date: 2019-12-16
Potential End Date: 2020-09-30 00:00:00
Last Modified: 2024-05-29
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