DoD awards Boeing $45.1M for computer storage devices, with limited competition and a 5-year duration

Contract Overview

Contract Amount: $45,108,130 ($45.1M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2021-09-16

End Date: 2026-09-16

Contract Duration: 1,826 days

Daily Burn Rate: $24.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: DCP CCA FIRST ARTICLE AND PRODUCTION UNITS

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $45.1 million to THE BOEING COMPANY for work described as: DCP CCA FIRST ARTICLE AND PRODUCTION UNITS Key points: 1. Contract value appears reasonable given the 5-year performance period and the nature of the goods. 2. Sole-source award limits price discovery and potentially increases costs for taxpayers. 3. Long-term contract duration may indicate a need for sustained supply, but also carries risk of obsolescence. 4. Focus on computer storage devices places this within a critical, evolving segment of the defense IT infrastructure. 5. The contract's value is moderate within the broader context of Department of Defense IT procurements.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific unit cost data or comparisons to similar sole-source awards for specialized computer storage. However, the $45.1 million over five years suggests an average annual spend of approximately $9 million. This figure seems within a plausible range for defense-grade storage solutions, though the lack of competition prevents a definitive assessment of optimal value for money. Further analysis of the contractor's historical pricing for similar items would be beneficial.

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 justified when only one responsible source is available or when urgent, compelling reasons exist. The lack of competition means that taxpayers did not benefit from a competitive bidding process, which could have led to lower prices or better terms. The rationale for this sole-source award needs careful scrutiny to ensure it was indeed the only viable option.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible price through competition, potentially leading to higher costs for taxpayers. Without competitive pressure, the awarded price may not reflect the most economical market rate.

Public Impact

The Department of the Navy benefits from the acquisition of essential computer storage devices. These devices are critical for data management, storage, and retrieval within naval operations. The contract supports the technological infrastructure necessary for national defense and military readiness. The geographic impact is primarily tied to the contractor's facilities and the deployment locations of the naval assets utilizing the storage.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing, potentially increasing costs.
Long contract duration carries risk of technology obsolescence in a rapidly evolving IT sector.
Lack of transparency in the sole-source justification could mask inefficiencies or missed savings opportunities.

Positive Signals

Award to a major defense contractor like Boeing suggests a high likelihood of meeting technical specifications.
Firm Fixed Price contract type shifts cost risk to the contractor, providing budget certainty.
Long-term contract provides supply chain stability for critical components.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on computer storage device manufacturing. The market for defense-grade storage solutions is specialized, often requiring high reliability, security, and performance standards. While the broader IT market is highly competitive, niche segments like defense procurement can see less open competition due to specific requirements and established relationships. Comparable spending benchmarks would involve analyzing other DoD contracts for similar storage hardware, considering factors like capacity, speed, and environmental resilience.

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. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless Boeing actively engages small businesses in its supply chain for this specific contract. Further investigation into Boeing's subcontracting plans would be needed to assess any indirect benefits to small businesses.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. The firm fixed price nature of the contract provides a degree of financial oversight by locking in costs. Transparency regarding the sole-source justification and performance metrics would be key areas for oversight. The Defense Contract Audit Agency (DCAA) and the Department of Defense Inspector General (DoDIG) may conduct audits or investigations as deemed necessary, particularly concerning the justification for the sole-source award and contractor performance.

Related Government Programs

Defense Information Technology Procurement
Computer Hardware Acquisition
Naval Systems Command Contracts
Sole-Source Defense Contracts
Data Storage Solutions

Risk Flags

Sole-source award lacks competition
Potential for technology obsolescence due to long contract duration
Limited transparency on justification for sole-source award

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $45.1 million to THE BOEING COMPANY. DCP CCA FIRST ARTICLE AND PRODUCTION UNITS

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 $45.1 million.

What is the period of performance?

Start: 2021-09-16. End: 2026-09-16.

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

The provided data indicates the contract was 'NOT COMPETED' and is a 'SOLE SOURCE'. While the specific justification is not detailed in the abbreviated data, common reasons for sole-source awards in defense contracting include: (1) only one responsible source is capable of providing the required supplies or services; (2) an urgent, compelling need exists that cannot be satisfied by other means; (3) a statute expressly requires or otherwise provides for the award to a specified source; or (4) it is in the national interest to award the contract on a sole-source basis. For this specific contract, the Navy would have had to document why Boeing was the only viable option for these particular computer storage devices, potentially due to unique technical specifications, integration requirements with existing systems, or proprietary technology. Without access to the full contract file or justification documents, the precise reason remains unconfirmed.

How does the unit cost or pricing structure of this contract compare to similar computer storage devices procured by the DoD or other federal agencies?

Direct comparison of unit costs is not possible with the provided data, as it lacks specific quantities per unit type and detailed pricing breakdowns. The contract is for 'DCP CCA FIRST ARTICLE AND PRODUCTION UNITS,' suggesting a mix of initial testing/qualification units and subsequent production units. The total award amount of $45.1 million over five years, with a duration of 1826 days (approximately 5 years), averages to roughly $9 million annually. To perform a meaningful comparison, one would need to identify comparable contracts for similar capacity, performance (e.g., read/write speeds, IOPS), reliability (e.g., MTBF), and environmental specifications (e.g., ruggedization for military use). Sole-source awards inherently make direct price benchmarking difficult, as there is no competitive baseline. However, if similar items were procured competitively, their pricing could serve as a reference point, though differences in specifications and contract terms must be carefully considered.

What are the potential risks associated with the long contract duration (5 years) for computer storage devices, given the rapid pace of technological advancement in this field?

The five-year duration for computer storage devices presents several risks. Firstly, technology obsolescence is a significant concern. The storage market evolves rapidly, with newer, faster, more efficient, and potentially cheaper technologies emerging constantly. By locking into a specific technology or vendor for five years, the Department of the Navy risks acquiring hardware that becomes outdated before the contract term ends, potentially impacting performance or interoperability with future systems. Secondly, maintenance and support costs could escalate if the technology becomes less common or if the contractor's support infrastructure shifts focus. Lastly, the government might miss out on cost savings associated with adopting newer, more cost-effective storage solutions that become available during the contract period. Mitigating these risks might involve incorporating technology refresh clauses, performance-based requirements that allow for upgrades, or ensuring robust end-of-life support provisions.

What is The Boeing Company's track record in supplying computer storage devices or related IT hardware to the federal government?

The Boeing Company is primarily known as a major aerospace and defense contractor, with extensive experience in aircraft manufacturing, space systems, and defense platforms. While they possess significant IT capabilities and likely integrate vast amounts of data storage into their complex systems, their direct track record as a primary manufacturer or supplier of standalone computer storage devices (like SSDs, HDDs, or SANs) to the federal government may be less prominent compared to specialized IT hardware vendors. Their role in this contract could be as an integrator, a manufacturer of highly specialized storage solutions tailored for specific defense applications, or potentially through a subsidiary or acquired entity. Analyzing their past performance on IT hardware contracts, particularly those involving storage, and their supply chain management for such components would be crucial to assessing their suitability and reliability for this specific requirement.

Are there any performance metrics or key performance indicators (KPIs) defined in the contract that will be used to measure the success of this procurement?

The provided data does not specify the performance metrics or Key Performance Indicators (KPIs) included in the contract. However, for a contract involving computer storage devices, typical KPIs could include: data transfer rates (read/write speeds), storage capacity delivered, reliability metrics (e.g., Mean Time Between Failures - MTBF), power consumption efficiency, physical dimensions and weight constraints, environmental resilience (temperature, shock, vibration tolerance), and compliance with specific security standards. For a Firm Fixed Price contract, especially one with a first article component, the acceptance of the first article would be a critical initial performance gate. Subsequent production units would likely be evaluated based on adherence to the approved specifications and delivery schedules. The Department of the Navy would be responsible for monitoring these aspects throughout the contract's life.

What is the total historical spending by the Department of the Navy on computer storage devices over the last five fiscal years, and how does this contract compare?

The provided data does not include historical spending figures for the Department of the Navy on computer storage devices. To determine this, one would need to query federal procurement databases (like FPDS or SAM.gov) using relevant Product Service Codes (PSCs) and North American Industry Classification System (NAICS) codes associated with storage hardware. For example, NAICS code 334112 (Computer Storage Device Manufacturing) and PSCs like 5610 (ADP Software) or 5620 (ADP System Components) could be relevant, though specific storage-related PSCs would be more precise. This contract's value of approximately $9 million per year would then be compared against the total annual spending in these categories by the Navy. Without that broader context, it's difficult to ascertain if this contract represents a significant portion of the Navy's storage procurement or is relatively modest.

Industry Classification

NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Computer Storage Device Manufacturing

Product/Service Code: IT AND TELECOM - COMPUTE

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6660420R8106

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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: $51,285,640

Exercised Options: $46,022,881

Current Obligation: $45,108,130

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $3,498,175

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline