Boeing awarded $130M DoD contract for radar enterprise engineering services, a sole-source award
Contract Overview
Contract Amount: $130,150,452 ($130.2M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2014-12-19
End Date: 2019-06-30
Contract Duration: 1,654 days
Daily Burn Rate: $78.7K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: IGF::OT::IGF UCA FOR RADAR ENTERPRISE
Place of Performance
Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63134
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $130.2 million to THE BOEING COMPANY for work described as: IGF::OT::IGF UCA FOR RADAR ENTERPRISE Key points: 1. Contract awarded on a sole-source basis, limiting competitive price discovery. 2. Engineering services are critical for maintaining advanced radar systems. 3. Long contract duration (over 5 years) suggests a sustained need. 4. Fixed-price contract type shifts some performance risk to the contractor. 5. Awarded by the Department of Defense, indicating a national security focus. 6. The contract was a delivery order under a larger agreement.
Value Assessment
Rating: fair
The contract value of $130 million for engineering services over approximately five years appears substantial. Without specific benchmarks for comparable radar enterprise engineering contracts, it's difficult to definitively assess value for money. However, sole-source awards often carry a higher risk of inflated pricing compared to competitively bid contracts. The fixed-price nature provides some cost control, but the overall value proposition hinges on the necessity and scope of the services provided.
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 possesses the necessary capabilities, technology, or security clearances. The lack of competition means that pricing was likely negotiated directly with The Boeing Company, potentially leading to higher costs than if multiple bids had been solicited.
Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding, as there was no market pressure to drive down prices.
Public Impact
The Department of Defense benefits from continued engineering support for its radar enterprise. This contract ensures the maintenance and potential upgrades of critical radar systems. The services likely support national security operations and defense readiness. Workforce implications include employment for engineers and technical staff at Boeing. Geographic impact is primarily centered around where Boeing performs these engineering services, likely within the US.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition.
- Potential for cost overruns if scope is not tightly managed.
- Reliance on a single contractor for critical engineering services.
Positive Signals
- Boeing is a well-established defense contractor with extensive experience.
- Fixed-price contract type provides cost certainty.
- Long-term nature of the contract suggests a stable, ongoing requirement.
Sector Analysis
This contract falls within the Engineering Services sector, specifically supporting defense-related technology. The market for specialized engineering services for complex defense systems like radar is often dominated by a few large, established aerospace and defense companies. Spending in this area is driven by the need for technological superiority and readiness in national defense. Comparable spending benchmarks would likely be found within other large-scale defense system support contracts.
Small Business Impact
As a sole-source award to a large prime contractor, The Boeing Company, this contract does not appear to include specific small business set-asides. There is no direct indication of subcontracting plans for small businesses within the provided data. The impact on the small business ecosystem is likely minimal unless Boeing actively engages small businesses for specialized support not covered by this prime contract.
Oversight & Accountability
Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are embedded within the contract terms, including performance standards and payment schedules. Transparency is limited due to the sole-source nature, but contract awards are generally reported. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- DoD Radar Systems Procurement
- Defense Engineering Services
- Aerospace and Defense Contracting
- Sole-Source Defense Awards
Risk Flags
- Sole-source award
- Lack of competition
- Potential for cost overruns
- Reliance on single contractor
Tags
defense, department-of-defense, engineering-services, radar, sole-source, delivery-order, firm-fixed-price, boeing, missouri, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $130.2 million to THE BOEING COMPANY. IGF::OT::IGF UCA FOR RADAR ENTERPRISE
Who is the contractor on this award?
The obligated recipient is THE BOEING COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $130.2 million.
What is the period of performance?
Start: 2014-12-19. End: 2019-06-30.
What is The Boeing Company's track record with similar sole-source engineering contracts for defense systems?
The Boeing Company has a long history of securing sole-source contracts with the Department of Defense, often due to its established position as a major defense contractor with unique capabilities. Their track record includes numerous large-scale sole-source awards for aircraft, satellite, and weapons systems development and sustainment. While this provides a level of assurance regarding their technical ability, sole-source awards inherently lack the price validation that comes from competitive bidding. Performance on past sole-source contracts would need to be reviewed on a case-by-case basis to assess specific value for money and adherence to schedule and budget, but generally, large sole-source awards require robust government oversight to mitigate risks.
How does the $130 million value compare to typical engineering service contracts for radar enterprises?
Benchmarking the $130 million value requires specific data on comparable radar enterprise engineering contracts, which is not readily available in the public domain. However, given that this is a sole-source award to a major defense contractor like Boeing, and covers a period of over five years, the value is substantial. Engineering services for complex defense systems, especially those involving advanced radar technology, are inherently costly due to the specialized expertise, technology, and security requirements involved. Without competitive bids, it's challenging to ascertain if this represents optimal value. Typically, sole-source contracts are justified by unique capabilities or urgent needs, and their pricing is subject to negotiation and government review, but they often come at a premium compared to competed contracts.
What are the primary risks associated with this sole-source contract?
The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competition. Without multiple bidders vying for the contract, there is less market pressure to ensure the most cost-effective solution. Another risk is contractor performance; while Boeing is a reputable firm, any sole-source award increases reliance on a single entity for critical services. Scope creep is also a concern; if the requirements are not tightly defined and managed, the contract value could increase significantly beyond the initial $130 million. Finally, there's a risk of technological obsolescence if the engineering services do not adequately plan for future advancements in radar technology.
How effective is the fixed-price contract type in managing costs for these engineering services?
The fixed-price contract type (specifically 'FIRM FIXED PRICE' or FFP) is generally considered effective in managing costs for well-defined services, as it shifts the risk of cost overruns to the contractor. For engineering services, its effectiveness depends heavily on the clarity and stability of the contract's scope of work. If the requirements are precisely defined and unlikely to change, FFP provides cost certainty for the government. However, if the engineering tasks are complex, involve significant research and development, or are subject to evolving requirements, FFP can become problematic. In such cases, contractors may build in substantial contingencies, leading to higher initial prices, or seek change orders if unforeseen issues arise, potentially negating the cost-saving benefits.
What is the historical spending pattern for radar enterprise engineering services within the Department of Defense?
Historical spending patterns for radar enterprise engineering services within the Department of Defense are typically characterized by significant, long-term investments. These services are crucial for maintaining and upgrading sophisticated defense systems that are essential for national security. Spending often involves a mix of competitively awarded contracts for new development and sustainment, alongside sole-source awards for specialized support or upgrades to existing platforms where only a few contractors possess the requisite knowledge or technology. The total annual spending can fluctuate based on modernization priorities, budget allocations, and the lifecycle of various radar systems. Analyzing historical data would reveal trends in contract types, average award values, and key contractors dominating this specialized market segment.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
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
Financial Breakdown
Contract Ceiling: $148,389,695
Exercised Options: $137,825,132
Current Obligation: $130,150,452
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: F3365701D0026
IDV Type: IDC
Timeline
Start Date: 2014-12-19
Current End Date: 2019-06-30
Potential End Date: 2019-06-30 00:00:00
Last Modified: 2022-09-22
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