DoD awards $64.9M for WING KIT PROTOTYPE ARTICLES to The Boeing Company, with a 1533-day duration

Contract Overview

Contract Amount: $64,932,037 ($64.9M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2021-07-20

End Date: 2025-09-30

Contract Duration: 1,533 days

Daily Burn Rate: $42.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: WING KIT PROTOTYPE ARTICLES

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $64.9 million to THE BOEING COMPANY for work described as: WING KIT PROTOTYPE ARTICLES Key points: 1. Contract awarded to a single, large defense contractor, raising questions about competitive pricing. 2. The contract type (Cost Plus Fixed Fee) can incentivize cost overruns. 3. Long contract duration (over 4 years) may indicate complex development or production. 4. Focus on prototype articles suggests early-stage development, potentially with evolving requirements. 5. Geographic concentration in Missouri for this significant defense award. 6. No small business set-aside or subcontracting noted, potentially limiting broader economic impact.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without detailed cost breakdowns and comparison to similar prototype development efforts. The Cost Plus Fixed Fee (CPFF) contract type, while common for R&D, carries inherent risks of cost escalation. The fixed fee component provides some incentive for the contractor to manage costs, but the absence of competitive bidding makes it difficult to assess if the government is receiving optimal value for the funds obligated. Further analysis of the contractor's historical performance on similar CPFF contracts would be beneficial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple potential vendors. This approach is typically used when only one vendor possesses the unique capabilities or technology required for the project, or in cases of urgent need. The lack of competition means that price discovery through market forces was bypassed, potentially leading to a higher price than if multiple bids had been solicited. The justification for this sole-source award would need to be thoroughly reviewed to ensure it was appropriate.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without competing the award, there is less assurance that the government secured the most cost-effective solution available in the market.

Public Impact

The primary beneficiary is The Boeing Company, a major aerospace manufacturer, through revenue generation and potential follow-on contracts. The contract aims to deliver prototype articles, likely for advanced aircraft or weapon systems, contributing to national defense capabilities. The geographic impact is concentrated in Missouri, where Boeing's relevant facilities are located, potentially supporting local jobs and the regional economy. Workforce implications may include specialized engineering, manufacturing, and program management roles within Boeing and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential for taxpayer savings.
Cost Plus Fixed Fee contract type can lead to cost overruns if not closely managed.
Long contract duration increases exposure to potential scope creep or requirement changes.
Lack of small business participation may limit broader economic benefits and innovation.

Positive Signals

Award to a prime contractor with extensive experience in aerospace and defense systems.
Focus on prototype development indicates investment in future technological capabilities.
Contract duration allows for thorough development and testing of complex systems.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on the development of advanced system components. The North American Industry Classification System (NAICS) code 334511 covers Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing. This sector is characterized by high R&D investment, long product development cycles, and significant government procurement. Spending in this area is critical for maintaining technological superiority in defense.

Small Business Impact

This contract does not appear to include a small business set-aside, nor is there an indication of significant subcontracting opportunities for small businesses. The award to a large prime contractor like Boeing suggests that the primary focus is on leveraging established capabilities. This approach may limit the direct economic benefits to the small business ecosystem and reduce opportunities for innovative small firms to participate in critical defense programs.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. The Cost Plus Fixed Fee structure necessitates rigorous financial oversight to monitor expenditures and ensure compliance with contract terms. Transparency may be limited due to the proprietary nature of prototype development, but contract modifications, performance reports, and financial reviews are standard oversight mechanisms. The Inspector General's office may also conduct audits or investigations as deemed necessary.

Related Government Programs

Advanced Aircraft Development Programs
Naval Aviation Systems Procurement
Defense Research and Development Contracts
Aerospace Prototype Manufacturing

Risk Flags

Sole-source award
Cost-plus contract type
Lack of competition
Potential for cost overruns
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $64.9 million to THE BOEING COMPANY. WING KIT PROTOTYPE ARTICLES

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 $64.9 million.

What is the period of performance?

Start: 2021-07-20. End: 2025-09-30.

What is The Boeing Company's track record with Cost Plus Fixed Fee (CPFF) contracts, particularly for prototype development?

The Boeing Company has a long history of executing complex defense contracts, including those utilizing Cost Plus Fixed Fee (CPFF) structures. CPFF contracts are common for research and development efforts where the final costs are uncertain. While Boeing possesses significant expertise in managing such contracts, the inherent nature of CPFF agreements means that cost overruns are a potential risk. Performance on these contracts is typically evaluated based on meeting technical specifications, delivery schedules, and managing costs within the negotiated fee structure. Historical data from the Federal Procurement Data System (FPDS) or other government contract databases would be needed to conduct a detailed analysis of Boeing's specific performance metrics (e.g., cost variances, schedule adherence) on similar CPFF prototype contracts.

How does the $64.9 million award compare to similar prototype development contracts for aerospace systems?

Comparing this $64.9 million award for prototype articles requires access to detailed data on comparable contracts, which is often not publicly available in granular form. However, in the context of major defense procurements, this amount is significant but not extraordinary for the development of advanced system components or prototypes. The value is influenced by factors such as technological complexity, required materials, testing protocols, and the specific system being developed. Without knowing the exact nature of the 'WING KIT PROTOTYPE ARTICLES,' direct comparisons are difficult. Generally, prototype contracts can range from a few million to hundreds of millions of dollars, depending on the scale and innovation involved. The fact that it's a sole-source award to a major prime contractor suggests a high degree of specialization or proprietary technology.

What are the primary risks associated with a sole-source, CPFF contract for prototype development?

The primary risks associated with a sole-source, Cost Plus Fixed Fee (CPFF) contract for prototype development are multifaceted. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to inflated costs as the government lacks market-based price validation. Secondly, the CPFF structure, while allowing for flexibility in R&D, can incentivize cost escalation, as the contractor is reimbursed for allowable costs plus a fixed fee. This requires robust government oversight to manage expenditures effectively. Thirdly, for prototype development, requirements can evolve, leading to scope creep and further cost increases. Finally, reliance on a single contractor can create dependency and limit future options if performance issues arise or if alternative technologies emerge.

What is the expected program effectiveness or outcome of delivering these 'WING KIT PROTOTYPE ARTICLES'?

The expected program effectiveness hinges on the successful development and testing of the 'WING KIT PROTOTYPE ARTICLES' to meet specified performance criteria. These prototypes are likely intended to validate new designs, technologies, or functionalities for an aircraft or related system, ultimately contributing to enhanced capabilities for the Department of Defense. Successful outcomes could include improved aerodynamic performance, reduced weight, integration of novel sensor or control systems, or demonstration of new manufacturing techniques. The ultimate effectiveness will be measured by how well these prototypes perform in testing and whether they lead to successful integration into a larger program or inform future design decisions, thereby advancing the military's technological edge.

How does this contract fit into the broader historical spending patterns for aerospace system development within the Department of Defense?

This contract aligns with historical spending patterns within the Department of Defense (DoD) that prioritize investment in advanced aerospace technologies and system development. The DoD consistently allocates substantial funds towards research, development, testing, and evaluation (RDT&E) for next-generation platforms and components. Awards like this, even for prototypes, are indicative of the ongoing effort to maintain technological superiority. Historically, large sums are dedicated to prime contractors like Boeing for complex projects. While the specific amount of $64.9 million is a snapshot, it reflects a continuous trend of significant investment in areas such as aerodynamics, propulsion, avionics, and structural components, crucial for maintaining a modern air and naval force.

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: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002420R6412

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: $75,012,421

Exercised Options: $70,182,522

Current Obligation: $64,932,037

Subaward Activity

Number of Subawards: 18

Total Subaward Amount: $12,942,231

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline