Boeing awarded $18.8M for TRIDENT II navigation subsystems, a sole-source engineering services contract

Contract Overview

Contract Amount: $18,783,421 ($18.8M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2010-10-01

End Date: 2021-07-23

Contract Duration: 3,948 days

Daily Burn Rate: $4.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: FY11/12 TRIDENT II (D5) NAVIGATION SUBSYSTEM

Place of Performance

Location: HUNTINGTON BEACH, ORANGE County, CALIFORNIA, 92647

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $18.8 million to THE BOEING COMPANY for work described as: FY11/12 TRIDENT II (D5) NAVIGATION SUBSYSTEM Key points: 1. Contract awarded for critical navigation subsystems for the TRIDENT II missile program. 2. Sole-source award raises questions about price discovery and potential for overpayment. 3. Long contract duration (nearly 11 years) suggests a stable, long-term need. 4. Engineering services category indicates a focus on technical expertise and development. 5. Awarded to The Boeing Company, a major defense contractor with extensive experience. 6. Geographic location in California may indicate a concentration of specialized labor or facilities.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and specialized application. Without competitive bids, it's difficult to ascertain if the $18.8 million represents a fair market price for the TRIDENT II navigation subsystems. The Cost Plus Incentive Fee (CPIF) contract type suggests that cost controls and performance incentives were intended, but the lack of competition limits the ability to compare pricing against similar offerings. The long duration of the contract (over 9 years) could indicate either a stable, well-understood requirement or a lack of innovation and competitive pressure driving cost efficiencies.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, The Boeing Company, was considered. This approach is typically used when a unique capability or proprietary technology is required, or when there is insufficient time to conduct a full competition. The lack of competition means that taxpayers did not benefit from the price reductions and innovation that can arise from a competitive bidding process. It also limits the government's ability to explore alternative solutions or suppliers.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government lacks the leverage of multiple competing offers. This limits the government's ability to negotiate the best possible price and may result in less value for the funds expended.

Public Impact

The primary beneficiaries are the Department of the Navy and the broader U.S. strategic deterrence mission, which relies on the TRIDENT II missile system. The contract delivers essential engineering services for the navigation subsystems, crucial for the accuracy and reliability of the missile. The geographic impact is concentrated in California, where The Boeing Company's relevant facilities are located. Workforce implications include employment for engineers and technical specialists within The Boeing Company in California.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs.
Long contract duration without clear competitive milestones may reduce pressure for cost optimization.
CPIF contract type requires careful monitoring to ensure contractor efficiency and cost control.
Lack of transparency inherent in sole-source procurement makes independent value assessment difficult.

Positive Signals

Award to a prime defense contractor with a proven track record in complex systems.
Focus on critical national security assets (TRIDENT II) suggests high importance and stringent quality requirements.
CPIF contract structure aims to align contractor incentives with government cost and performance goals.
Long-term nature of the contract provides stability for a critical defense capability.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting the defense industry's complex weapon systems. The market for such specialized engineering services is often dominated by a few large, experienced contractors due to high barriers to entry, including technical expertise, security clearances, and established relationships. Comparable spending benchmarks are difficult to establish due to the unique nature of the TRIDENT II program and the sole-source award. However, spending on defense engineering services generally represents a significant portion of the overall defense budget.

Small Business Impact

This contract does not appear to involve small business set-asides, as indicated by the 'sb': false field. The prime contractor, The Boeing Company, is a large aerospace corporation. There is no explicit information regarding subcontracting plans for small businesses within this specific award notice. The impact on the small business ecosystem is likely minimal for this particular contract, as it is a direct award to a major prime contractor for highly specialized services.

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 for a critical defense system, it is likely subject to rigorous internal review and oversight. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse. Transparency is limited due to the sole-source nature, but contract performance and financial reporting would be monitored by the government.

Related Government Programs

TRIDENT II (D5) Strategic Weapon System
Ballistic Missile Submarines
Naval Strategic Systems
Defense Engineering Services
Aerospace and Defense Manufacturing

Risk Flags

Sole-source award
Long contract duration
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.8 million to THE BOEING COMPANY. FY11/12 TRIDENT II (D5) NAVIGATION SUBSYSTEM

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 $18.8 million.

What is the period of performance?

Start: 2010-10-01. End: 2021-07-23.

What is the historical spending trend for TRIDENT II navigation subsystem contracts awarded to The Boeing Company?

Analyzing historical spending trends for this specific contract requires access to a broader dataset of past procurements. The provided data only covers a single definitive contract awarded from 2010 to 2021 for approximately $18.8 million. Without data on previous or subsequent contracts for the same or similar services, it is impossible to determine a spending trend. However, the long duration of this contract (nearly 11 years) suggests a continuous need for these services. Future analysis would benefit from examining contract awards over a longer period to identify patterns in spending, contract types, and pricing for the TRIDENT II program's navigation subsystems.

How does the Cost Plus Incentive Fee (CPIF) structure typically influence contractor performance and cost control in defense contracts?

The Cost Plus Incentive Fee (CPIF) contract type is designed to incentivize the contractor to control costs while meeting performance targets. In a CPIF contract, the final profit is adjusted based on the contractor's performance relative to target cost and performance objectives. If the contractor achieves lower costs than targeted, both the government and the contractor share in the savings. Conversely, if costs exceed the target, the contractor's profit is reduced. This structure aims to align the contractor's financial interests with those of the government, encouraging efficiency and cost-consciousness. However, effective implementation requires clear performance metrics and robust government oversight to ensure that cost savings do not come at the expense of quality or essential functionality.

What are the potential risks associated with a sole-source award for critical defense components like the TRIDENT II navigation subsystem?

Sole-source awards for critical defense components present several risks. Firstly, the lack of competition can lead to inflated prices, as the government does not benefit from the price discovery mechanisms inherent in a competitive bidding process. This can result in a higher cost to taxpayers. Secondly, it can foster complacency in the contractor, reducing the incentive to innovate or improve efficiency over time, as there is no direct threat of losing business to a competitor. Thirdly, it can create vendor lock-in, making it difficult and costly to switch to alternative suppliers or technologies in the future. Finally, it raises concerns about the government's ability to independently validate the necessity and cost-effectiveness of the procured goods or services.

What is The Boeing Company's general track record in delivering complex defense systems and navigation technologies?

The Boeing Company has a long and extensive track record as a major prime contractor in the aerospace and defense industry, delivering a wide array of complex systems, including aircraft, spacecraft, and missile systems. They are a key player in numerous U.S. military programs, including those involving strategic deterrence. Their experience with programs like the TRIDENT II missile system suggests a deep understanding of the technical requirements and operational contexts. While specific performance details for every contract are not publicly available, Boeing's sustained role as a primary defense contractor indicates a general capability to meet stringent government requirements for complex technological solutions, including navigation and guidance systems.

Are there any known issues or controversies related to the TRIDENT II navigation subsystem or its procurement history?

Information regarding specific controversies or widespread issues directly tied to the TRIDENT II navigation subsystem procurement is not readily available in public domain summaries. The TRIDENT II (D5) program itself is a cornerstone of U.S. strategic deterrence and has undergone numerous upgrades and sustainment efforts over its operational life. Procurement for such critical and long-standing systems often involves complex, multi-year contracts, sometimes with sole-source justifications due to specialized requirements. While individual contract performance can always be subject to scrutiny, there are no widely publicized, systemic controversies specifically targeting the navigation subsystem's procurement or performance that are immediately apparent from general contract data.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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: $28,735,179

Exercised Options: $22,579,430

Current Obligation: $18,783,421

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline