Boeing awarded $63.7M for TRIDENT II (D5) navigation equipment maintenance, repair, and rebuilding

Contract Overview

Contract Amount: $63,707,251 ($63.7M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2008-10-01

End Date: 2011-09-30

Contract Duration: 1,094 days

Daily Burn Rate: $58.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: TRIDENT II (D5) MAINTENANCE, REPAIR, REBUILDING IN SUPPORT OF NAVIGATION EQUIPMENT

Place of Performance

Location: HUNTINGTON BEACH, ORANGE County, CALIFORNIA, 92647

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $63.7 million to THE BOEING COMPANY for work described as: TRIDENT II (D5) MAINTENANCE, REPAIR, REBUILDING IN SUPPORT OF NAVIGATION EQUIPMENT Key points: 1. Contract awarded to a single, established provider, raising questions about competitive pricing. 2. The cost-plus incentive fee structure may incentivize cost overruns if not closely monitored. 3. Long-term maintenance contracts can indicate critical system reliance and potential vendor lock-in. 4. The duration of the contract (nearly 3 years) suggests a significant, ongoing need. 5. This contract supports a vital national defense asset, the TRIDENT II (D5) missile system. 6. The absence of competition suggests potential barriers to entry for other qualified firms.

Value Assessment

Rating: fair

The contract value of $63.7 million for a nearly three-year period for maintenance, repair, and rebuilding of navigation equipment for the TRIDENT II (D5) system appears substantial. Without specific benchmarks for this highly specialized equipment, it is difficult to definitively assess value for money. However, the lack of competition inherently limits the government's ability to secure the lowest possible price. The cost-plus incentive fee (CPIF) contract type, while allowing for flexibility, requires diligent oversight to ensure costs remain reasonable and that incentives are effectively driving desired outcomes.

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. The Department of the Navy likely determined that The Boeing Company was the only responsible source capable of performing the required services. This could be due to proprietary knowledge, unique manufacturing capabilities, or the specialized nature of the TRIDENT II (D5) navigation systems. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices through market forces.

Taxpayer Impact: Sole-source awards mean taxpayers may not be receiving the best possible price, as there was no opportunity for multiple vendors to compete and offer lower bids.

Public Impact

This contract directly supports the U.S. Navy's strategic deterrence capabilities by ensuring the operational readiness of the TRIDENT II (D5) missile system. The services provided are critical for the maintenance, repair, and rebuilding of essential navigation equipment, ensuring the accuracy and reliability of the missile system. The primary beneficiaries are the U.S. Navy and national security, ensuring the continued effectiveness of a key component of the nuclear triad. Work is likely performed by highly skilled technicians and engineers within The Boeing Company, potentially impacting specialized aerospace and defense manufacturing workforces.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
Cost-plus incentive fee contracts require robust oversight to prevent cost overruns.
The specialized nature of the equipment may create long-term dependency on a single contractor.
Lack of transparency in the sole-source justification could mask potential inefficiencies.

Positive Signals

Contract supports a critical national defense asset, ensuring strategic deterrence capabilities.
The Boeing Company is a well-established defense contractor with extensive experience.
The CPIF contract structure includes incentives, which can drive performance if managed correctly.
The contract duration suggests a stable, long-term need being met.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on navigation systems for strategic missile platforms. The market for such highly specialized components and maintenance is typically concentrated among a few large, experienced defense contractors. The total addressable market for defense electronics and maintenance is in the billions of dollars annually, with significant government investment. This contract represents a small but critical portion of that spending, focused on maintaining the readiness of a unique and vital weapon system.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there information suggesting significant subcontracting opportunities for small businesses. The nature of the work, involving highly specialized maintenance and repair for a strategic defense system, is likely performed by the prime contractor or its large, specialized subcontractors. This contract is unlikely to have a direct positive impact on the broader small business defense ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a sole-source award, scrutiny would focus on the justification for the award and the contractor's performance against the contract terms, particularly the cost-plus incentive fee structure. Transparency may be limited due to the sensitive nature of the defense system. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

TRIDENT II (D5) Missile System
Strategic Deterrence Programs
Naval Weapons Systems Maintenance
Defense Navigation and Guidance Systems
Aerospace Manufacturing and Repair

Risk Flags

Sole-source award
Cost-plus contract type
Critical defense system maintenance

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $63.7 million to THE BOEING COMPANY. TRIDENT II (D5) MAINTENANCE, REPAIR, REBUILDING IN SUPPORT OF NAVIGATION EQUIPMENT

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 $63.7 million.

What is the period of performance?

Start: 2008-10-01. End: 2011-09-30.

What is the specific justification for awarding this contract on a sole-source basis to The Boeing Company?

The provided data indicates a sole-source award, meaning the Department of the Navy determined that The Boeing Company was the only responsible source capable of meeting the government's needs. This is common for highly specialized systems where only one contractor possesses the necessary technical expertise, proprietary data, or manufacturing capabilities. For the TRIDENT II (D5) navigation equipment, this likely stems from the system's complexity, its critical role in national security, and potentially unique intellectual property or manufacturing processes held by Boeing. Without the specific justification document (e.g., a Justification and Approval for Other Than Full and Open Competition), the precise reasons remain undisclosed, but typically involve factors like essential military or intelligence-related functions, or the unavailability of comparable commercial items.

How does the Cost Plus Incentive Fee (CPIF) structure work in this contract, and what are the potential risks and benefits?

A Cost Plus Incentive Fee (CPIF) contract is a type of cost-reimbursement contract where the contractor is reimbursed for allowable costs and also receives a fee that is adjusted based on performance against pre-determined targets. In this case, the targets likely relate to cost, schedule, or performance metrics for the maintenance, repair, and rebuilding of the TRIDENT II (D5) navigation equipment. The 'incentive' part means that if Boeing performs better than the target (e.g., lower cost, faster completion), its fee increases; if it performs worse, its fee decreases. The benefit is that it can motivate the contractor to achieve specific goals. The risk is that if the targets are set too low or the oversight is weak, the contractor could still achieve a high fee while incurring excessive costs, or the incentives might not align perfectly with the government's ultimate objectives. Robust government oversight is crucial to ensure the targets are appropriate and the fee adjustments are fair.

What is the historical spending trend for TRIDENT II (D5) navigation equipment maintenance and repair?

The provided data only includes a single contract award of $63.7 million to The Boeing Company for TRIDENT II (D5) navigation equipment maintenance, repair, and rebuilding, spanning from October 1, 2008, to September 30, 2011. This specific award does not provide historical spending trends. To understand historical patterns, one would need to analyze contract data over a longer period, looking for previous awards for similar services to Boeing or other potential contractors, as well as any follow-on contracts. Such an analysis would reveal whether spending has been consistent, increasing, or decreasing, and whether the services have been consistently procured from a single source or competed over time. Without this broader dataset, it's impossible to establish a historical spending context for this specific service.

Are there any comparable contracts for similar navigation system maintenance from other branches of the military or allied nations?

Determining comparable contracts for highly specialized systems like the TRIDENT II (D5) navigation equipment is challenging due to the unique nature of strategic weapon systems and the proprietary information involved. While other branches of the military (e.g., Air Force, Army) maintain complex navigation and guidance systems for their assets, direct comparisons are difficult because the technology, criticality, and operational environment differ significantly. Similarly, comparing with allied nations requires access to their defense procurement data, which is often not publicly available or standardized. Generally, maintenance contracts for critical defense platforms are highly tailored to the specific system's requirements and the contractor's unique capabilities, making direct benchmarking against other contracts, even within the defense sector, a complex analytical task.

What are the potential risks associated with relying on The Boeing Company for long-term maintenance of this critical navigation system?

The primary risk associated with long-term reliance on a single contractor like The Boeing Company for critical systems such as the TRIDENT II (D5) navigation equipment is vendor lock-in. This can lead to reduced negotiating power for the government, potentially resulting in higher prices over time as competition is limited or non-existent. There's also a risk that the contractor's focus or investment in maintaining expertise for this specific system could wane if they perceive less competitive pressure. Furthermore, should Boeing face financial difficulties or strategic shifts, it could disrupt the availability of essential maintenance and support, impacting national security. Ensuring robust contract management, performance monitoring, and exploring options for knowledge transfer or developing alternative support capabilities, where feasible, are key mitigation strategies.

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: 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: $134,308,523

Exercised Options: $131,190,832

Current Obligation: $63,707,251

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline