Boeing awarded $28.9M contract for RADOME services, raising questions about competition and value

Contract Overview

Contract Amount: $28,912,436 ($28.9M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2020-11-02

End Date: 2025-03-31

Contract Duration: 1,610 days

Daily Burn Rate: $18.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: RADOME

Place of Performance

Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $28.9 million to THE BOEING COMPANY for work described as: RADOME Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Long contract duration of over 4 years suggests a need for sustained support, but also locks in pricing. 3. The contract is for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' indicating a specialized need. 4. No small business set-aside was utilized, potentially excluding smaller players from this opportunity. 5. The firm-fixed-price structure aims to control costs, but the lack of competition is a concern. 6. Awarded by the Department of the Navy, indicating a defense-related requirement.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive bidding and limited public data on RADOME services. The $28.9 million award over approximately four years suggests a significant investment. Without comparable contract data or market analysis, it's difficult to definitively assess if the pricing is optimal or if taxpayers are receiving excellent value for money. The sole-source nature inherently reduces the pressure on the contractor to offer the most competitive price.

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 among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in cases of urgent need. The lack of competition means there was no opportunity for multiple bidders to submit proposals, which could have driven down the price through a competitive bidding process. This limits the government's ability to explore alternative solutions or secure the best possible pricing.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the most cost-effective solution, as the absence of competition can lead to higher prices than might be achieved in a competitive environment.

Public Impact

The primary beneficiaries are the Department of the Navy, which receives essential RADOME services for its aircraft. The contract ensures the continued operational readiness and performance of specific naval aviation assets. The services delivered are critical for protecting sensitive aircraft components from environmental factors and ensuring aerodynamic integrity. The contract supports specialized manufacturing and maintenance jobs within the aerospace sector, likely concentrated where The Boeing Company has facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced innovation.
Sole-source awards can limit transparency and make it harder to justify expenditures.
Long-term contract duration without clear performance metrics could lead to complacency.
Reliance on a single supplier for critical components poses a supply chain risk.

Positive Signals

The contract is with a well-established aerospace manufacturer, The Boeing Company, known for its extensive experience.
Firm-fixed-price contract type helps to control costs and provides budget certainty.
The contract duration indicates a recognized and ongoing need for these specialized services.
Awarded by the Department of the Navy, suggesting alignment with critical defense requirements.

Sector Analysis

The RADOME market is a niche segment within the broader aerospace and defense industry, focusing on specialized components that protect radar systems and other sensitive equipment on aircraft. This sector requires advanced materials science and manufacturing capabilities. Spending in this area is often driven by defense procurement needs for advanced military aircraft. Comparable spending benchmarks are difficult to establish publicly due to the proprietary nature of defense contracts and the specialized requirements of RADOME technology.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. This means that opportunities for small businesses to participate in this specific contract are limited. The absence of a small business set-aside suggests that the primary contractor, The Boeing Company, is expected to fulfill the requirements directly or through its larger supply chain partners, potentially bypassing the small business ecosystem for this particular award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, which obligates the contractor to deliver specified goods or services at an agreed-upon price. Transparency is limited due to the sole-source nature of the award, making detailed public scrutiny of the procurement process challenging. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Aircraft Parts and Auxiliary Equipment Manufacturing
Aerospace Defense Contracts
Naval Aviation Support Services
Radar System Components
Sole-Source Defense Procurements

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.9 million to THE BOEING COMPANY. RADOME

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 $28.9 million.

What is the period of performance?

Start: 2020-11-02. End: 2025-03-31.

What is the historical spending by the Department of the Navy on RADOME services or similar components?

Analyzing historical spending by the Department of the Navy on RADOME services or similar components is crucial for contextualizing the $28.9 million award to The Boeing Company. While specific data for 'RADOME services' as a distinct category might be difficult to isolate without deeper database access, the Navy consistently invests in aircraft sustainment and component manufacturing. Past contracts for aircraft parts, structural components, and electronic system protection would provide a baseline. For instance, if the Navy has previously awarded similar sole-source contracts for specialized parts in the range of $5-10 million annually, this $28.9 million over four years might represent a significant increase or a consolidation of requirements. Conversely, if historical spending on comparable items has been in the tens of millions per year, this award could be seen as relatively standard. Without access to historical contract databases filtered by specific product service codes (PSCs) or keywords related to RADOMES and aircraft components, a precise historical comparison remains speculative but essential for assessing value.

How does the pricing of this RADOME contract compare to industry benchmarks or other government contracts for similar components?

Benchmarking the pricing of this $28.9 million RADOME contract against industry standards or other government contracts is challenging due to the sole-source nature of the award and the specialized requirements of RADOME technology. Typically, competitive bidding allows for price discovery, where multiple vendors vie for the contract, establishing a market-driven price. In a sole-source scenario, the government relies on negotiation and cost analysis, but without competitive pressure, the final price may not reflect the lowest possible market rate. To assess value, one would ideally compare the per-unit cost or total contract value against similar contracts awarded to different agencies or even within the same agency if competitive awards for comparable RADOMES exist. Information on the specific type of RADOME, its technological sophistication, and the materials used would be necessary for a meaningful comparison. Absent such data, it's difficult to definitively state whether the pricing is favorable, fair, or excessive, though the lack of competition inherently raises concerns about potential overpayment.

What are the specific risks associated with relying on a single contractor, The Boeing Company, for these RADOME services?

Relying on a single contractor, The Boeing Company, for these RADOME services introduces several risks. Firstly, there's a 'vendor lock-in' risk, where the government becomes dependent on Boeing's pricing, delivery schedules, and technological roadmap. If Boeing faces production issues, supply chain disruptions, or decides to increase prices significantly in future negotiations, the Navy has limited alternatives. Secondly, the lack of competition can stifle innovation; Boeing may have less incentive to invest in improving RADOME technology or manufacturing processes if they are guaranteed the contract. Thirdly, there's a potential for reduced oversight effectiveness; without competing vendors to scrutinize performance or offer alternatives, the government's leverage to enforce stringent quality standards or demand cost efficiencies might be diminished. Finally, a single point of failure exists: any major operational disruption at Boeing could directly impact the Navy's ability to maintain its aircraft, potentially affecting mission readiness.

What performance metrics or key performance indicators (KPIs) are likely included in this contract to ensure service delivery and quality?

While the provided data does not detail specific performance metrics or Key Performance Indicators (KPIs) for this contract, firm-fixed-price contracts typically include clauses that define acceptable quality, delivery timelines, and technical specifications. For RADOME services, likely KPIs would revolve around defect rates (e.g., number of defects per unit or per batch), on-time delivery percentages, adherence to technical specifications (e.g., material composition, structural integrity, electromagnetic transparency), and warranty provisions. The contract might also specify response times for addressing issues or defects. The Department of the Navy would be responsible for monitoring Boeing's performance against these agreed-upon metrics. Failure to meet these KPIs could result in penalties, contract modifications, or even termination, depending on the severity and contractual terms. The effectiveness of oversight hinges on the clarity and measurability of these KPIs.

How does this contract align with the Department of Defense's broader strategy for aircraft sustainment and component modernization?

This contract for RADOME services aligns with the Department of Defense's (DoD) broader strategy for aircraft sustainment by ensuring the continued operational capability of naval aviation assets. RADOMES are critical components that protect sensitive radar and electronic systems, essential for modern warfare capabilities, including surveillance, targeting, and communication. By awarding this contract, the Navy is addressing the ongoing need for maintenance, repair, or replacement of these vital parts, thereby supporting the longevity and readiness of its aircraft fleet. Furthermore, depending on the specific nature of the RADOME services (e.g., upgrades or new technology integration), it could also contribute to component modernization efforts, ensuring that aircraft systems remain effective against evolving threats and technological advancements. The sustained investment in such components underscores the DoD's commitment to maintaining a technologically superior and operationally ready air power.

What is the potential impact of this sole-source award on future competition for similar aerospace components?

The sole-source nature of this $28.9 million RADOME contract could have a chilling effect on future competition for similar aerospace components. When a large contract is awarded without competition, potential bidders are denied the opportunity to demonstrate their capabilities and offer competitive pricing. This can discourage smaller or newer companies from entering the market or investing in the necessary qualifications, as they perceive established players like Boeing as having preferential access. Over time, a pattern of sole-source awards can lead to market consolidation, reducing the number of viable competitors for future procurements. This lack of robust competition can ultimately result in higher prices for the government and taxpayers, as well as potentially slower innovation cycles, as the incumbent contractor faces less pressure to improve products or processes.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0038319RH574

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6200 JS 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: $28,912,436

Exercised Options: $28,912,436

Current Obligation: $28,912,436

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $14,029,488

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: N0038317GA301

IDV Type: BOA

Timeline