DoD Awards Boeing $68M for Navigation Systems, Sole-Source Contract Raises Oversight Questions
Contract Overview
Contract Amount: $68,005,102 ($68.0M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2022-08-19
End Date: 2028-01-31
Contract Duration: 1,991 days
Daily Burn Rate: $34.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: OTHER DIRECT COST
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $68.0 million to THE BOEING COMPANY for work described as: OTHER DIRECT COST Key points: 1. Significant award to a single large contractor, The Boeing Company. 2. Sole-source procurement method limits price discovery and competition. 3. Contract duration extends over five years, impacting long-term value. 4. Focus on critical navigation systems highlights national security importance.
Value Assessment
Rating: fair
The $68 million award for navigation systems is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential market alternatives. Benchmarking against similar sole-source contracts for specialized systems would be necessary for a more precise valuation.
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. This approach bypasses competitive processes, potentially leading to higher costs and reduced innovation compared to an open competition.
Taxpayer Impact: The lack of competition in this sole-source award means taxpayers may not be receiving the best possible price for these critical navigation systems.
Public Impact
Impacts national security through the provision of essential navigation equipment. Potential for increased costs to taxpayers due to sole-source nature. Reliance on a single contractor for critical defense components. Long contract duration may limit flexibility for future technological advancements.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Long contract duration
- Lack of transparency in pricing
Positive Signals
- Critical national security system
- Award to established defense contractor
Sector Analysis
This contract falls under the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector. Spending in this area is crucial for defense capabilities, but often involves specialized, high-cost components where competition can be challenging.
Small Business Impact
The contract was awarded to The Boeing Company, a large aerospace corporation. There is no indication that small businesses were involved in this specific sole-source award, potentially missing opportunities for their participation.
Oversight & Accountability
The sole-source nature of this contract warrants close oversight to ensure fair pricing and prevent potential cost overruns. The Department of the Navy should conduct thorough reviews of Boeing's cost proposals and performance throughout the contract's lifecycle.
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
- Sole-source procurement
- Extended contract duration
- Potential for inflated pricing
- Limited small business participation
- Lack of competitive benchmarking
Tags
search-detection-navigation-guidance-aer, department-of-defense, mo, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $68.0 million to THE BOEING COMPANY. OTHER DIRECT COST
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 $68.0 million.
What is the period of performance?
Start: 2022-08-19. End: 2028-01-31.
What specific factors justified the sole-source award, and were alternatives thoroughly explored?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs that only one contractor can meet. A thorough review would involve documenting why other potential sources were not viable, including market research and analysis of existing contracts. Without this information, it's difficult to ascertain if the government truly received the best value.
How will the government ensure cost-effectiveness and prevent overpricing given the lack of competition?
To mitigate the risks of cost overruns in a sole-source contract, the government should employ robust cost analysis techniques, including detailed audits of contractor expenses and profit margins. Establishing clear performance metrics and incentivizing efficiency can also help. Regular reviews and negotiations based on market data, even for sole-source items, are crucial for taxpayer protection.
What is the long-term strategic impact of relying on a single provider for these critical navigation systems?
Long-term reliance on a single provider can create strategic vulnerabilities, such as supply chain disruptions or a lack of technological advancement if the contractor underinvests. It also reduces leverage in future negotiations. Diversifying suppliers or developing in-house capabilities, where feasible, could enhance resilience and foster innovation in the long run.
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: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0002419R6403
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
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: $353,817,854
Exercised Options: $97,772,981
Current Obligation: $68,005,102
Subaward Activity
Number of Subawards: 39
Total Subaward Amount: $12,841,113
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2022-08-19
Current End Date: 2028-01-31
Potential End Date: 2029-11-20 00:00:00
Last Modified: 2025-12-16
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