Boeing awarded $69.15M for CIDD27 System Configuration Set Orders by the Department of the Navy

Contract Overview

Contract Amount: $69,151,010 ($69.2M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2024-05-01

End Date: 2026-09-30

Contract Duration: 882 days

Daily Burn Rate: $78.4K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: CIDD27 SYSTEM CONFIGURATION SET ORDER

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $69.2 million to THE BOEING COMPANY for work described as: CIDD27 SYSTEM CONFIGURATION SET ORDER Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Engineering services are critical for complex defense systems. 3. The contract duration of 882 days suggests a significant scope of work. 4. The cost-plus-fixed-fee structure may incentivize cost overruns. 5. Performance is located in Missouri, potentially impacting local workforce. 6. No small business set-aside was utilized for this award.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and specific engineering services. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex R&D or services where costs are uncertain, carries inherent risks of cost escalation. Without competitive bids or a clear comparison to similar system configuration services, it's difficult to definitively assess if the $69.15 million represents optimal value for money. The fixed fee component provides some cost control, but the overall cost is variable.

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 conduct a competitive bidding process. This approach is typically justified when only one responsible source can provide the required services, often due to proprietary technology, unique capabilities, or urgent needs. The absence of competition means that price discovery through market forces was bypassed, potentially leading to higher costs than if multiple vendors had vied for the contract.

Taxpayer Impact: Taxpayers may face higher costs due to the lack of competitive pressure to drive down prices. The justification for sole-source procurement needs to be robust to ensure funds are used efficiently.

Public Impact

The Department of the Navy benefits from specialized engineering services for its CIDD27 system. This contract supports the maintenance and configuration of critical defense systems. The geographic impact is concentrated in Missouri, where the contractor is located. The contract may sustain or create jobs within the aerospace and defense engineering sector in Missouri.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing, potentially increasing costs for taxpayers.
Cost-plus-fixed-fee contract type can incentivize higher spending if not closely managed.
Lack of transparency in the sole-source justification process could mask inefficiencies.
The specific nature of 'system configuration set orders' is not detailed, hindering performance assessment.
Long contract duration (882 days) increases exposure to potential cost overruns and scope creep.

Positive Signals

Awarding to a known entity like The Boeing Company suggests reliance on established expertise.
Engineering services are crucial for maintaining and upgrading complex defense systems.
The fixed fee component in the CPFF structure provides some level of cost predictability.
The contract is for a specific system (CIDD27), indicating a focused requirement.
The contract is a delivery order, suggesting it's part of a larger, potentially established, framework agreement.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense systems. The aerospace and defense industry is characterized by high R&D investment, complex supply chains, and significant government procurement. The market for specialized engineering services for defense platforms is often dominated by a few large, established contractors like Boeing, due to the technical expertise and security clearances required. Comparable spending benchmarks are difficult to establish without more detail on the specific system and services, but large-scale defense engineering contracts can range from tens to hundreds of millions of dollars.

Small Business Impact

This contract was not competed and did not include a small business set-aside, as indicated by 'ss': false and 'sb': false. This means that opportunities for small businesses to participate as prime contractors were not pursued for this specific award. While large sole-source contracts often bypass small business set-asides, it limits direct revenue generation for the small business ecosystem in this instance. Subcontracting opportunities may still exist, but they are not mandated by the contract's structure.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a sole-source award, the justification and negotiation process would be subject to internal review and potentially oversight from the Government Accountability Office (GAO) if protested. Transparency is limited due to the non-competitive nature. Inspector General jurisdiction would apply if fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Engineering Services
Naval Systems Modernization Programs
Aerospace and Defense Contractor Awards
Sole-Source Defense Contracts
Cost-Plus-Fixed-Fee Contracts

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Lack of small business participation
Limited public information on system specifics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $69.2 million to THE BOEING COMPANY. CIDD27 SYSTEM CONFIGURATION SET ORDER

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 $69.2 million.

What is the period of performance?

Start: 2024-05-01. End: 2026-09-30.

What is the specific nature of the 'CIDD27 SYSTEM CONFIGURATION SET ORDER' and why was it deemed sole-source?

The specific details of the 'CIDD27 SYSTEM CONFIGURATION SET ORDER' are not publicly available in the provided data. However, 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. This could be due to proprietary technology, unique capabilities, compatibility with existing systems, or urgent and compelling needs. For this contract, the Department of the Navy would have had to formally document and justify why The Boeing Company was the only viable option. Without access to the Justification and Approval (J&A) document, the precise reasons remain speculative but likely relate to Boeing's unique position with the CIDD27 system.

How does the Cost-Plus-Fixed-Fee (CPFF) contract type compare to other pricing structures for similar engineering services?

The Cost-Plus-Fixed-Fee (CPFF) structure is common for complex projects where the final cost is difficult to estimate precisely at the outset, such as research, development, or specialized engineering services. In a CPFF contract, the contractor is reimbursed for allowable costs plus a predetermined fixed fee representing profit. This differs from Fixed-Price contracts, where the price is set regardless of actual costs, incentivizing efficiency but carrying higher risk for the contractor if costs escalate. It also differs from Cost-Plus-Incentive-Fee (CPIF), which adjusts the fee based on performance against targets. While CPFF provides flexibility for the government in uncertain environments, it shifts cost risk to the government and requires robust oversight to prevent cost overruns, unlike fixed-price contracts which place more risk on the contractor.

What are the potential risks associated with a sole-source award of this magnitude ($69.15M)?

The primary risk of a sole-source award of this magnitude is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government may not achieve the best possible price. There's also a risk of reduced innovation and efficiency, as the contractor may face less incentive to optimize processes or find cost-saving measures compared to a competitive environment. Furthermore, sole-source awards can raise concerns about fairness and equal opportunity for other capable businesses. Robust oversight and negotiation are critical to mitigate these risks, ensuring the government secures fair and reasonable terms despite the absence of competition.

What is the historical spending pattern for engineering services related to the CIDD27 system or similar platforms by the Department of the Navy?

Historical spending data for the specific 'CIDD27 SYSTEM CONFIGURATION SET ORDER' is not provided. However, the Department of the Navy, as a major branch of the DoD, consistently invests heavily in engineering services for its complex platforms, including aircraft, ships, and command and control systems. Spending on such services can fluctuate based on modernization cycles, new platform development, and sustainment requirements. Analyzing past contracts for similar systems or services awarded to Boeing or other major defense contractors would provide context. Without specific historical data for CIDD27, it's difficult to determine if this $69.15M award represents an increase, decrease, or stable level of investment compared to prior periods.

What are the implications of the contract being awarded to The Boeing Company, a major defense contractor?

Awarding this contract to The Boeing Company, a major defense contractor, implies leveraging their established expertise, infrastructure, and potentially proprietary knowledge related to the CIDD27 system. Boeing has a long history and significant capabilities in aerospace and defense engineering. This can lead to efficient execution and high-quality outcomes due to their experience. However, it also means that a significant portion of defense spending is concentrated among a few large prime contractors. While beneficial for program continuity and technical proficiency, it limits opportunities for smaller, specialized firms and can reduce overall market competition in the long run. The government relies on Boeing's capabilities but must ensure fair pricing and performance through rigorous contract management.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6893620R0097

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: $154,078,595

Exercised Options: $154,078,595

Current Obligation: $69,151,010

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N6893623D0001

IDV Type: IDC

Timeline