Boeing awarded $8.7M for SB 1 Courseware, with no competition and a cost-plus-fixed-fee structure

Contract Overview

Contract Amount: $8,710,656 ($8.7M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2024-11-19

End Date: 2026-12-30

Contract Duration: 771 days

Daily Burn Rate: $11.3K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SB 1 COURSEWARE

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $8.7 million to THE BOEING COMPANY for work described as: SB 1 COURSEWARE Key points: 1. The contract's cost-plus-fixed-fee (CPFF) structure may incentivize higher costs without strict performance controls. 2. Lack of competition raises concerns about potential overpricing and limited innovation. 3. The duration of 771 days suggests a significant, ongoing requirement for the courseware. 4. Awarded by the Department of the Navy, this contract falls under defense sector spending. 5. The specific NAICS code 333310 points to machinery manufacturing, which may be indirectly related to the courseware's subject matter. 6. The absence of small business set-aside indicates a focus on larger, established contractors.

Value Assessment

Rating: questionable

The contract's cost-plus-fixed-fee (CPFF) pricing model, combined with a lack of competition, makes a direct value-for-money assessment difficult. CPFF contracts can lead to cost overruns if not managed tightly. Without benchmark data for similar courseware development or comparison to other training solutions, it's challenging to determine if the $8.7 million represents a fair price. The absence of competitive bids means there was no market pressure to drive down costs or ensure optimal pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of the Navy did not solicit bids from multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, or in urgent situations. The lack of competition limits the government's ability to explore alternative solutions or negotiate the best possible price. It suggests that The Boeing Company was identified as the only viable provider for this specific requirement.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from competitive pricing, potentially leading to higher overall expenditure for the government.

Public Impact

Naval personnel will benefit from the SB 1 Courseware, likely enhancing their skills and knowledge in a specific area. The courseware is expected to be delivered by December 2026, impacting training schedules and readiness. The contract's geographic impact is centered in Missouri, where the awardee is located, though the end-users are likely naval installations. Workforce implications may include specialized instructional designers and developers at The Boeing Company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee structure may lead to cost overruns without stringent oversight.
Sole-source award limits price discovery and potential for better value.
Lack of competition could stifle innovation in courseware development.
The specific nature of 'SB 1 Courseware' is not detailed, making it hard to assess its criticality or necessity.
The NAICS code seems tangential to courseware, raising questions about the procurement rationale.

Positive Signals

The Boeing Company is a major defense contractor with extensive experience.
The contract has a defined delivery end date, providing a timeline for completion.
The award is for courseware, which supports personnel training and readiness.

Sector Analysis

The defense sector, particularly within the Department of the Navy, frequently procures training and educational materials. This contract for 'SB 1 Courseware' fits within the broader market for defense training solutions, which is a significant segment of the IT and services industry. While The Boeing Company is primarily known for aerospace and defense manufacturing, it also has capabilities in developing training systems. Benchmarking this specific courseware contract is difficult without more details on its subject matter and complexity, but overall defense training spending is substantial.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The award to a large prime contractor like The Boeing Company suggests that the focus was on established capabilities rather than fostering small business participation. This means the direct economic benefits to the small business ecosystem from this specific award are likely minimal.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a cost-plus-fixed-fee contract, rigorous financial oversight and performance monitoring would be crucial to ensure costs remain controlled and deliverables are met. Transparency is limited due to the sole-source nature and lack of public detail on the courseware's specifics. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Training and Simulation
Naval Education and Training Command
Commercial and Service Industry Machinery Manufacturing
Cost-Plus-Fixed-Fee Contracts

Risk Flags

Sole-source award
Cost-plus-fixed-fee pricing
Lack of competition
Unclear NAICS code relevance

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $8.7 million to THE BOEING COMPANY. SB 1 COURSEWARE

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 $8.7 million.

What is the period of performance?

Start: 2024-11-19. End: 2026-12-30.

What is the specific subject matter and intended use of the 'SB 1 Courseware'?

The provided data does not specify the subject matter or intended use of the 'SB 1 Courseware'. The NAICS code 333310, 'Commercial and Service Industry Machinery Manufacturing,' seems unrelated to courseware development, suggesting the courseware might be for operating or maintaining such machinery, or there's a disconnect in the classification. Without this information, it's impossible to assess the criticality of the courseware, the complexity of its development, or its direct impact on naval operations and personnel readiness. Further details would be needed to understand the necessity and scope of this training requirement.

Why was this contract awarded on a sole-source basis to The Boeing Company?

The data indicates the contract was 'NOT COMPETED,' implying a sole-source award. Typically, sole-source contracts are justified when only one responsible source can provide the required goods or services, or when urgent and compelling circumstances preclude competition. For The Boeing Company to be the sole source for 'SB 1 Courseware,' it suggests they possess unique intellectual property, specialized expertise, or existing infrastructure directly tied to this specific training requirement that other potential vendors lack. The Department of the Navy would have a justification document outlining these reasons, which is not publicly available in the provided data.

How does the cost-plus-fixed-fee (CPFF) structure compare to other pricing models for similar courseware development contracts?

Cost-plus-fixed-fee (CPFF) contracts reimburse the contractor for allowable costs incurred plus a predetermined fixed fee representing profit. This structure is often used when the scope of work is not precisely defined or involves significant uncertainty, as might be the case with novel courseware development. Compared to fixed-price contracts, CPFF offers less price certainty for the government but can incentivize contractors to undertake complex or high-risk projects. However, it requires robust oversight to prevent cost escalation. For courseware, fixed-price contracts are often preferred if the requirements are well-defined, offering better cost control for the government. The choice of CPFF here suggests a high degree of uncertainty or complexity perceived by the Navy.

What is the historical spending pattern for 'SB 1 Courseware' or similar training materials by the Department of the Navy?

The provided data does not include historical spending patterns for 'SB 1 Courseware' or directly comparable training materials. This single award of $8.7 million represents the current known expenditure. To understand historical trends, one would need to analyze past contracts awarded by the Department of the Navy (or DoD broadly) for similar types of courseware, considering factors like subject matter, complexity, delivery method (digital, in-person), and contractor. Without this context, it's difficult to determine if this $8.7 million award is higher or lower than previous investments, or if spending in this area has been consistent, increasing, or decreasing.

What are the potential risks associated with The Boeing Company's performance on this contract, given its track record?

The Boeing Company is a large, established defense contractor with a long history of performance across numerous complex programs. While generally considered reliable, like any major corporation, they have faced challenges. Potential risks on this specific contract could include schedule delays, cost overruns (particularly given the CPFF structure), or quality issues with the courseware if not adequately managed. The sole-source nature means the Navy is reliant on Boeing's capacity and commitment. However, Boeing's extensive experience in large-scale projects, including training systems, suggests a lower probability of fundamental performance failure compared to a less experienced entity. Risk mitigation would focus on contract management and oversight.

How does the $8.7 million contract value compare to the overall IT or training services spending within the Department of the Navy?

The $8.7 million contract value for 'SB 1 Courseware' is a relatively modest sum when compared to the total IT and training services spending of the Department of the Navy, which runs into billions of dollars annually. For instance, the Navy's IT budget alone is substantial, covering everything from network infrastructure and cybersecurity to software development and enterprise systems. Training services encompass a vast array of needs, including simulation, e-learning platforms, and curriculum development. Therefore, while $8.7 million is a significant amount for a single courseware package, it represents a small fraction of the Navy's overall investment in technology and personnel development.

Industry Classification

NAICS: Manufacturing › Commercial and Service Industry Machinery Manufacturing › Commercial and Service Industry Machinery Manufacturing

Product/Service Code: TRAINING AIDS AND DEVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6134022R0062

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 6200 JAMES S 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: $8,710,656

Exercised Options: $8,710,656

Current Obligation: $8,710,656

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $1,584,716

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6134024D0001

IDV Type: IDC

Timeline