Navy Awards Boeing $90.3M Contract for DDG 124 Ship Systems
Contract Overview
Contract Amount: $90,321,534 ($90.3M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2017-04-05
End Date: 2027-03-12
Contract Duration: 3,628 days
Daily Burn Rate: $24.9K/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: IOUS FOR DDG 124
Place of Performance
Location: HUNTINGTON BEACH, ORANGE County, CALIFORNIA, 92647
Plain-Language Summary
Department of Defense obligated $90.3 million to THE BOEING COMPANY for work described as: IOUS FOR DDG 124 Key points: 1. Significant contract awarded to a major defense contractor, The Boeing Company. 2. The contract is for essential ship systems for the DDG 124. 3. Full and open competition was utilized, suggesting potential for competitive pricing. 4. The sector is dominated by large, established players like Boeing.
Value Assessment
Rating: good
The contract value of $90.3 million for ship systems appears reasonable given the complexity and duration. Benchmarking against similar DDG class procurements would provide a more precise assessment.
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, indicating a competitive bidding process. This method generally promotes price discovery and potentially better value for the government.
Taxpayer Impact: The competitive nature of the award is expected to yield a fair price, maximizing taxpayer value for these critical ship systems.
Public Impact
Ensures critical systems are delivered for a new Navy destroyer, enhancing national security. Supports jobs within the defense manufacturing sector, particularly at Boeing. The use of full and open competition provides transparency in the procurement process.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns in long-term, complex defense contracts.
- Reliance on a single contractor for critical components.
Positive Signals
- Awarded under full and open competition.
- Firm Fixed Price contract type limits cost risk to the government.
- Long-term contract provides stability for program execution.
Sector Analysis
This contract falls within the Defense sector, specifically the manufacturing of complex ship systems. Spending in this area is substantial and driven by naval modernization and shipbuilding programs.
Small Business Impact
While the prime contractor is The Boeing Company, a large corporation, subcontracts may offer opportunities for small businesses. Further analysis of subcontracting plans would be needed to confirm.
Oversight & Accountability
The Department of the Navy is responsible for oversight. The firm fixed price contract type and the competitive award process provide a degree of accountability.
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
- Long contract duration increases risk of cost escalation.
- Potential for sole-source reliance on specific technologies.
- Complexity of integrated ship systems can lead to unforeseen issues.
- Dependence on a single prime contractor for critical components.
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 $90.3 million to THE BOEING COMPANY. IOUS FOR DDG 124
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 $90.3 million.
What is the period of performance?
Start: 2017-04-05. End: 2027-03-12.
What is the historical cost performance of similar ship system contracts awarded to The Boeing Company?
Historical cost performance data for similar contracts would be crucial for a comprehensive value assessment. Analyzing past projects can reveal trends in cost overruns or savings, providing insight into Boeing's ability to manage complex defense procurements within budget and identifying potential risks for this specific contract.
What are the specific risks associated with the exclusion of sources in the initial phase of this competition?
The exclusion of sources, even if followed by full and open competition, could indicate specialized technology or prior development that limited initial bidders. This might suggest a higher risk of vendor lock-in or reduced competitive pressure if the excluded sources possessed unique capabilities essential for the systems.
How effectively does the firm fixed price structure mitigate potential cost escalations given the contract's long duration?
A firm fixed price contract is designed to cap costs for the government. However, for a contract spanning several years, risks of escalation due to unforeseen material costs, labor changes, or scope creep still exist. Effective management and clear contract terms are vital to ensure the fixed price remains truly fixed.
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: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0002417R4108
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, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $138,671,385
Exercised Options: $90,321,534
Current Obligation: $90,321,534
Actual Outlays: $2,539,506
Subaward Activity
Number of Subawards: 23
Total Subaward Amount: $9,974,338
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2017-04-05
Current End Date: 2027-03-12
Potential End Date: 2027-03-12 00:00:00
Last Modified: 2025-08-13
More Contracts from THE Boeing Company
- KC-X Modernization Program — $32.0B (Department of Defense)
- International Space Station — $22.4B (National Aeronautics and Space Administration)
- 200112!000108!9700!ZD60 !ballistic Missile Defense ORG. !HQ000601C0001 !A!N!*!N! !20001222!20080930!848025649!848025649!009256819!n!the Boeing Company !3370 E Miraloma AVE !anaheim !ca!92806!37000!089!01!huntsville !madison !alabama !+000383571022!n!n!000000000000!ad93!rdte/Other Defense-Adv Tech DEV !S1 !services !1caa!ballistic Missile Defense SYS !541710!*!*!3! ! ! !*!*!*!B!*!*!A! !A !U!R!2!001!B! !Z!Y!Z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! — $18.8B (Department of Defense)
- USN P-8A FRP II Long Lead Material — $18.1B (Department of Defense)
- 200512!010860!2100!w56hzv!tacom - Warren !w56hzv05c0724 !A!N! !Y! ! !20050923!20141231!016544780!016544780!009256819!n!the Boeing Company !J S Mcdonnell Blvd !saint Louis !mo!63166!65000!510!29!st. Louis !ST. Louis (city) !missouri !+000219245691!n!n!000000000000!az15!rdte/Other Research&development-Eng/Manuf Devel !S1 !services !301 !FCS !541330!E! !1! ! ! ! ! !20200930!B! ! !A! !d!u!u!1!001!n!1a!z!y!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! ! ! ! !0001! ! TAS::21 2040::TAS — $12.7B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)