Boeing awarded $75M for Trident II IGF Resolver Replacement, a sole-source engineering services contract
Contract Overview
Contract Amount: $75,167,774 ($75.2M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2016-10-01
End Date: 2019-12-31
Contract Duration: 1,186 days
Daily Burn Rate: $63.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: UK RESOLVER&W RESOLVER REPLACEMENT TRIDENT II IGF::CT::IGF
Place of Performance
Location: HUNTINGTON BEACH, ORANGE County, CALIFORNIA, 92647
Plain-Language Summary
Department of Defense obligated $75.2 million to THE BOEING COMPANY for work described as: UK RESOLVER&W RESOLVER REPLACEMENT TRIDENT II IGF::CT::IGF 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, requiring close oversight. 3. Performance period spans over three years, indicating a significant, long-term need. 4. This contract supports critical national defense infrastructure, specifically the Trident II missile system. 5. The absence of competition limits opportunities for new market entrants and innovation. 6. Engineering services are essential for maintaining complex defense systems.
Value Assessment
Rating: fair
The contract's value of $75.17 million for engineering services over approximately three years is substantial. Without comparable sole-source contracts for similar complex defense system replacements, a direct value-for-money assessment is challenging. The cost-plus-incentive-fee (CPIF) pricing structure, while allowing for flexibility, can lead to higher final costs compared to fixed-price contracts if not managed diligently. Benchmarking is difficult due to the specialized nature of the work and the sole-source award.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, The Boeing Company, was solicited. This approach is typically used when a unique capability or proprietary technology is required, or in cases of urgent need where competition is not feasible. The lack of competition means that taxpayers did not benefit from potential price reductions or innovative solutions that might have emerged from a competitive bidding process.
Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as the government lacks the leverage of multiple bids to drive down prices. This limits the government's ability to secure the best possible value.
Public Impact
The primary beneficiary is the Department of Defense, ensuring the continued operational readiness of the Trident II missile system. Services delivered include critical engineering support for the replacement of the IGF Resolver. The geographic impact is primarily within defense facilities, though the system itself has strategic national implications. This contract supports a highly specialized engineering workforce within The Boeing Company.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and potential for cost savings.
- Cost-plus-incentive-fee contract type can lead to cost overruns if not closely monitored.
- Lack of transparency in the justification for sole-source award.
- Long-term reliance on a single contractor for critical defense components.
Positive Signals
- Award to an experienced contractor with a proven track record in defense systems.
- Contract addresses a critical need for maintaining strategic defense capabilities.
- Incentive fee structure aims to align contractor performance with government objectives.
- Engineering services are crucial for the longevity and effectiveness of complex systems.
Sector Analysis
This contract falls within the Engineering Services sector, specifically supporting the defense industry's complex weapon systems. The market for specialized defense engineering is often characterized by high barriers to entry, significant R&D investment, and a limited number of qualified contractors. Spending in this area is critical for maintaining national security and technological superiority, with contracts often being long-term and high-value due to the complexity and criticality of the systems involved.
Small Business Impact
This contract does not appear to involve small business set-asides. As a sole-source award to a large prime contractor, it is unlikely to directly benefit small businesses through subcontracting opportunities unless The Boeing Company voluntarily includes them in its supply chain. The focus is on specialized engineering services for a major defense platform.
Oversight & Accountability
Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), ensuring compliance with contract terms, cost controls, and performance standards. The cost-plus-incentive-fee structure necessitates rigorous financial oversight to manage expenditures and verify the achievement of performance incentives. Transparency may be limited due to the sole-source nature and national security implications, but internal DoD oversight mechanisms and potentially Inspector General reviews would apply.
Related Government Programs
- Trident II D5 Missile System
- Strategic Weapons Systems
- Defense Engineering Services
- Naval Nuclear Propulsion Program
Risk Flags
- Sole-source award
- Cost-plus-incentive-fee contract type
- Critical defense system component
Tags
defense, department-of-defense, engineering-services, sole-source, definitive-contract, cost-plus-incentive-fee, trident-ii, missile-systems, california, large-contract, national-security
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $75.2 million to THE BOEING COMPANY. UK RESOLVER&W RESOLVER REPLACEMENT TRIDENT II IGF::CT::IGF
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 $75.2 million.
What is the period of performance?
Start: 2016-10-01. End: 2019-12-31.
What is the specific function of the IGF Resolver being replaced, and why is it critical to the Trident II system?
The Integrated Guidance Facility (IGF) Resolver is a crucial component within the guidance system of the Trident II (D5) missile. It plays a vital role in the missile's navigation and targeting accuracy by providing precise angular position data. The Trident II missile is a key element of the United States' strategic nuclear deterrent, deployed on submarines. Therefore, the reliable functioning of the IGF Resolver is paramount to ensuring the missile's ability to reach its intended target accurately. Its replacement signifies an effort to maintain or enhance the system's reliability and potentially incorporate technological advancements to counter obsolescence or improve performance.
What are the typical risks associated with Cost Plus Incentive Fee (CPIF) contracts in defense, and how are they mitigated?
Cost Plus Incentive Fee (CPIF) contracts carry inherent risks, primarily the potential for cost overruns as the contractor is reimbursed for allowable costs plus a fee that is adjusted based on performance against targets. The incentive element aims to motivate the contractor to control costs and meet performance objectives. Risks include the contractor prioritizing profit over cost control, potential for disputes over allowable costs, and the government potentially paying more than necessary if targets are not well-defined or achieved. Mitigation strategies involve robust government oversight, detailed target cost setting, clear performance metrics, thorough audits of contractor expenditures, and strong negotiation of the sharing formula for cost savings or overruns. The Defense Contract Management Agency (DCMA) plays a critical role in monitoring these contracts.
Why was this contract awarded on a sole-source basis instead of through full and open competition?
Sole-source awards are typically justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required supplies or services, or when there is a compelling urgency. For a critical defense system like the Trident II missile, the justification might stem from the proprietary nature of the technology, the need for specialized expertise possessed only by the incumbent contractor (The Boeing Company), or the requirement for seamless integration with existing, highly complex systems where introducing a new vendor could introduce unacceptable risks or delays. The government must formally document and approve the justification for not competing the award.
How does the $75.17 million contract value compare to historical spending on similar engineering services for strategic missile systems?
Directly comparing the $75.17 million contract value for the Trident II IGF Resolver Replacement to historical spending on similar engineering services for strategic missile systems is challenging without access to detailed, comparable contract data. However, given the critical nature and complexity of strategic weapon systems, engineering services contracts can be substantial. The value reflects the specialized expertise, rigorous testing, and long-term support required for such high-stakes defense assets. The cost-plus-incentive-fee structure also suggests that the final cost could fluctuate based on performance and cost targets. Benchmarking would ideally involve analyzing other sole-source or competitively awarded contracts for sustainment and upgrade engineering services on comparable platforms like the Minuteman III or other naval strategic systems.
What are the potential long-term implications of relying on a single contractor for such a critical defense component?
Long-term reliance on a single contractor, like The Boeing Company for the Trident II IGF Resolver Replacement, can create several implications. On the positive side, it ensures continuity of knowledge and expertise, potentially leading to efficient sustainment and upgrades. However, it also reduces competitive pressure, which could lead to higher prices over time and potentially stifle innovation if the contractor faces no external challenges. It also increases program risk; if the contractor experiences financial difficulties, operational issues, or decides to exit the market, the government may face significant disruption in acquiring necessary services or parts. This dependency underscores the importance of strong government oversight and relationship management.
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
Solicitation ID: N0003017Q0002
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, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $86,317,160
Exercised Options: $82,836,566
Current Obligation: $75,167,774
Actual Outlays: $456,244
Subaward Activity
Number of Subawards: 17
Total Subaward Amount: $4,324,711
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2016-10-01
Current End Date: 2019-12-31
Potential End Date: 2019-12-31 00:00:00
Last Modified: 2025-05-15
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