Boeing awarded $10M+ for software integration, facing limited competition due to specialized needs

Contract Overview

Contract Amount: $10,023,720 ($10.0M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2020-11-11

End Date: 2023-06-13

Contract Duration: 944 days

Daily Burn Rate: $10.6K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SOFTWARE INTEGRATION LAB

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $10.0 million to THE BOEING COMPANY for work described as: SOFTWARE INTEGRATION LAB Key points: 1. Contract value exceeds $10 million, indicating a significant investment in software integration capabilities. 2. The award to Boeing suggests a reliance on established prime contractors with deep domain expertise. 3. Limited competition raises questions about potential price efficiencies and the availability of alternative solutions. 4. The contract duration spans over two years, implying a need for sustained support and development. 5. The 'Aircraft Manufacturing' NAICS code suggests this software integration is tied to complex aerospace systems. 6. The 'Cost Plus Fixed Fee' contract type indicates potential for cost overruns if not closely managed.

Value Assessment

Rating: fair

The contract value of over $10 million for software integration is substantial. Benchmarking this against similar specialized software development contracts within the defense sector is challenging without more granular data. The 'Cost Plus Fixed Fee' structure, while common for complex R&D, carries inherent risks of cost escalation if not meticulously overseen. Without specific performance metrics or comparable contract data, assessing the true value-for-money is difficult, but the limited competition suggests a premium may have been paid.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded on a limited competition basis, likely due to the specialized nature of the software integration required for advanced aircraft manufacturing. The specific technical requirements and existing system dependencies may have restricted the pool of eligible bidders to a few highly qualified entities, such as The Boeing Company. The limited number of bidders suggests that price discovery may have been less robust than in a full-and-open competition, potentially leading to higher costs.

Taxpayer Impact: Taxpayers may have incurred higher costs due to the restricted competition. The government may have had fewer options to negotiate favorable pricing, and the lack of broader market engagement could mean missed opportunities for innovative and cost-effective solutions.

Public Impact

The primary beneficiaries are the Department of the Navy and its advanced aircraft programs, which will receive enhanced software integration. The contract supports the development and integration of critical software for complex aerospace systems. The geographic impact is centered in Missouri, where Boeing's operations are located. This contract likely supports a specialized workforce within The Boeing Company, including software engineers and systems integrators.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type introduces risk of cost overruns.
Limited competition may result in suboptimal pricing and reduced innovation.
Specialized nature of the work could create vendor lock-in.
Lack of transparency in the limited competition process.

Positive Signals

Award to a major defense contractor like Boeing suggests capability and reliability.
Contract duration indicates a long-term commitment to a critical capability.
Software integration is vital for modern defense systems.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on software integration for aircraft manufacturing. The market for such specialized services is dominated by large, established prime contractors due to the high barriers to entry, including extensive R&D, security clearances, and existing relationships. Spending in this area is driven by the need for advanced technological capabilities in military platforms. Comparable spending benchmarks would likely involve other large-scale software development and integration projects for complex defense systems.

Small Business Impact

There is no indication of a small business set-aside for this contract, and the prime contractor is The Boeing Company, a large business. This suggests that small businesses are unlikely to be direct recipients of this award. However, Boeing may engage small businesses as subcontractors for specific components or services, though the extent of this subcontracting is not detailed in the provided data. The focus on a large prime contractor may limit direct opportunities for small businesses in this specific procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. The 'Cost Plus Fixed Fee' structure necessitates rigorous financial oversight to monitor costs and ensure adherence to the fixed fee. Accountability measures would involve performance reviews and milestone tracking. Transparency may be limited due to the nature of the limited competition, but contract details and performance reports are usually available through official channels like the Federal Procurement Data System (FPDS).

Related Government Programs

Aircraft Manufacturing
Software Development
Defense Systems Integration
Naval Aviation Programs

Risk Flags

Limited Competition
Cost Plus Fixed Fee Contract Type
Potential for Cost Overruns
Lack of Small Business Participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.0 million to THE BOEING COMPANY. SOFTWARE INTEGRATION LAB

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 $10.0 million.

What is the period of performance?

Start: 2020-11-11. End: 2023-06-13.

What is the specific nature of the software integration being performed under this contract?

The provided data indicates the contract falls under NAICS code 336411 (Aircraft Manufacturing) and was awarded to The Boeing Company. This suggests the software integration is likely related to the development, modification, or enhancement of software for aircraft systems. This could encompass a wide range of applications, including flight control systems, avionics, mission systems, data processing, or manufacturing process software. The 'Cost Plus Fixed Fee' contract type implies a degree of complexity and potential for evolving requirements, characteristic of advanced aerospace projects where the exact scope may not be fully defined at the outset.

How does the $10M+ contract value compare to typical software integration spending for similar defense aircraft programs?

The $10 million contract value is a significant sum, but its comparability to 'typical' spending is highly dependent on the specific nature and scale of the software integration. For major defense aircraft programs, software development and integration can represent a substantial portion of the overall program cost, often running into tens or hundreds of millions of dollars over the lifecycle. This $10M+ award could represent a specific phase, a particular system upgrade, or ongoing sustainment support. Without knowing the exact scope (e.g., new development vs. sustainment, complexity of the aircraft platform), it's difficult to definitively benchmark. However, it aligns with the substantial investments required for sophisticated defense aerospace technology.

What are the primary risks associated with the 'Cost Plus Fixed Fee' (CPFF) contract type in this context?

The primary risk of a CPFF contract is cost overrun. While the 'fixed fee' provides the contractor with a defined profit margin, the 'cost plus' portion means the government reimburses the contractor's allowable costs. If the contractor's costs exceed projections, the government pays more. This structure is often used when the scope of work is not precisely defined or involves significant uncertainty, such as research and development or complex integration. For taxpayers, this means the final cost can be higher than initially anticipated. Effective oversight, detailed cost tracking, and robust negotiation are crucial to mitigate these risks and ensure the government receives good value.

Given the limited competition, what are the potential implications for innovation and future technological advancements?

Limited competition can stifle innovation. When only a few contractors are considered, the incentive to develop novel approaches or significantly improve existing technologies may be reduced, as the contractor may feel less pressure from market alternatives. Furthermore, if the limited competition is based on proprietary technology or specific legacy systems, it can create vendor lock-in, making it harder for new entrants with potentially more innovative solutions to penetrate the market. This can lead to slower adoption of cutting-edge technologies and potentially higher long-term costs for the government as it remains tied to a limited set of providers.

What is Boeing's track record with similar large-scale software integration contracts for the Department of Defense?

The Boeing Company has a long and extensive track record of delivering complex systems and software integration for the Department of Defense, including numerous aircraft platforms. They are a major prime contractor on many high-value programs, such as the F-15, F/A-18, and various bomber programs, all of which involve substantial software development and integration. Their history includes both successes and challenges, as is common with large, complex defense contracts. Their established infrastructure, security clearances, and experience with DoD requirements make them a frequent choice for such specialized work, although this also contributes to the limited competition landscape.

How has spending on software integration for aircraft manufacturing evolved within the Department of the Navy over the past five years?

Spending on software integration for aircraft manufacturing within the Department of the Navy has likely seen a consistent increase over the past five years, driven by the increasing complexity and connectivity of modern military aircraft. Trends include greater emphasis on cybersecurity, data analytics, artificial intelligence integration, and the need for seamless interoperability between different systems and platforms. Contracts like this one, even if awarded in 2020, reflect the ongoing investment required to maintain and upgrade sophisticated aviation assets. Analyzing historical spending patterns would reveal a growing proportion of defense budgets allocated to software and digital capabilities across all platforms.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6893615R0072

Pricing Type: COST PLUS FIXED FEE (U)

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: $10,552,240

Exercised Options: $10,552,240

Current Obligation: $10,023,720

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N6893618D0026

IDV Type: IDC

Timeline