Boeing Awarded $41.8M for Ship and Dock Systems, Lacking Competition
Contract Overview
Contract Amount: $41,841,570 ($41.8M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2006-12-05
End Date: 2014-03-30
Contract Duration: 2,672 days
Daily Burn Rate: $15.7K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: MAIN-REP OF SHIPS-SML CRAFT-DOCKS
Place of Performance
Location: HUNTINGTON BEACH, ORANGE County, CALIFORNIA, 92647
Plain-Language Summary
Department of Defense obligated $41.8 million to THE BOEING COMPANY for work described as: MAIN-REP OF SHIPS-SML CRAFT-DOCKS Key points: 1. Significant contract value of $41.8M awarded to a single large business. 2. Lack of competition raises concerns about potential overpricing and value. 3. Contract duration of 2672 days suggests long-term reliance on this provider. 4. The sector is critical for national defense, making reliable systems essential.
Value Assessment
Rating: questionable
The contract's cost-plus incentive fee structure, combined with a lack of competition, makes a definitive pricing assessment difficult. Without benchmarks from competing bids, it's hard to determine if $41.8M represents fair market value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and negotiation leverage, potentially leading to higher costs for taxpayers.
Taxpayer Impact: The absence of competition likely resulted in a higher price than a competed contract, impacting taxpayer funds negatively.
Public Impact
Taxpayers may have paid more due to the lack of competitive bidding. Reliance on a single vendor for critical defense systems poses a risk. The long contract duration could lock in potentially inflated costs over time. Transparency in pricing and justification for sole-source awards is crucial.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Cost-plus contract type
- Long contract duration
Positive Signals
- Awarded to a major defense contractor
- Supports critical defense systems
Sector Analysis
This contract falls within the Defense sector, specifically related to navigation and guidance systems for naval assets. Spending in this area is critical for national security, but often involves complex, specialized systems where competition can be challenging.
Small Business Impact
The contract was awarded to The Boeing Company, a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award, missing an opportunity for their participation.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny from oversight bodies to ensure the price paid was justified and that future opportunities for competition are explored.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition
- Sole-source award
- Cost-plus contract type
- Potential for overpricing
- Long contract duration
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 $41.8 million to THE BOEING COMPANY. MAIN-REP OF SHIPS-SML CRAFT-DOCKS
Who is the contractor on this award?
The obligated recipient is THE BOEING COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $41.8 million.
What is the period of performance?
Start: 2006-12-05. End: 2014-03-30.
What specific factors justified the sole-source award for these ship and dock systems, and were alternatives considered?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Without detailed documentation, it's difficult to assess if alternatives were thoroughly explored or if the justification holds up under scrutiny. This lack of transparency can obscure potential cost savings.
How does the cost-plus incentive fee structure compare to industry standards for similar sole-source defense contracts?
Cost-plus incentive fee (CPIF) contracts aim to incentivize contractor efficiency by sharing cost savings or overruns. However, for sole-source awards, the baseline cost is often less defined. Comparing this specific CPIF structure to industry benchmarks for similar sole-source procurements is essential to gauge if the incentive mechanisms are effectively controlling costs or if the government is bearing excessive risk.
What is the long-term strategic impact of awarding such a significant, non-competed contract to a single provider for critical naval systems?
Awarding a large, long-term, non-competed contract to a single provider can create vendor lock-in, potentially stifling innovation and reducing future competition. It also concentrates risk within one company. Strategically, agencies should continuously assess if market conditions allow for future competition or if modularity and open architectures can be incorporated to mitigate long-term dependency.
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: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Address: 3370 E MIRALOMA AVE, ANAHEIM, CA, 92806
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $531,935,750
Exercised Options: $531,935,750
Current Obligation: $41,841,570
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2006-12-05
Current End Date: 2014-03-30
Potential End Date: 2014-03-30 00:00:00
Last Modified: 2022-08-25
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