Boeing awarded $33.8M contract for navigational instruments, a sole-source award with a 3-year duration

Contract Overview

Contract Amount: $33,790,042 ($33.8M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2003-12-18

End Date: 2006-12-31

Contract Duration: 1,109 days

Daily Burn Rate: $30.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200405!000411!5700!GD50 !OKLAHOMA CITY ALC/LID !F4261099D0006 !A!N! !N!SD17 !02 !20031218!20040930!947764452!947764452!009256819!N!THE BOEING COMPANY !801 IRVING WICK DR W !HEATH !OH!43056!34748!089!39!HEATH !LICKING !OHIO !+000007351913!N!N!000000000000!6605!NAVIGATIONAL INSTRUMENTS !A1C!OTHER AIRCRAFT EQUIPMENT !000 !* !336413!E! !5!A!S!C! ! !99990909!B! ! !A! !D!U!R!1!001!N!1G!A!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: HEATH, LICKING County, OHIO, 43056, UNITED STATES OF AMERICA

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $33.8 million to THE BOEING COMPANY for work described as: 200405!000411!5700!GD50 !OKLAHOMA CITY ALC/LID !F4261099D0006 !A!N! !N!SD17 !02 !20031218!20040930!947764452!947764452!009256819!N!THE BOEING COMPANY !801 IRVING WICK DR W !HEATH !OH!43056!34748!089!39!HEATH !LICKING !OHIO !+000007351913!N!N!000000000000!6605!NAVIGATIONAL INSTRUM… Key points: 1. Contract awarded for navigational instruments, indicating a need for specialized aviation equipment. 2. Sole-source award suggests limited market availability or specific contractor capabilities required. 3. Contract duration of over three years implies a long-term requirement for these instruments. 4. The award value of $33.8M falls within a moderate spending range for defense systems. 5. The contractor, Boeing, is a major aerospace manufacturer with extensive experience in this sector. 6. The contract type (Cost Plus Award Fee) incentivizes performance while managing costs.

Value Assessment

Rating: fair

The contract value of $33.8 million over approximately three years for navigational instruments appears reasonable given the specialized nature of aerospace components and the sole-source award. Without specific benchmarks for comparable navigational instrument systems or detailed cost breakdowns, a precise value-for-money assessment is challenging. However, Cost Plus Award Fee contracts aim to balance contractor incentive with cost control, suggesting an effort to achieve good value. The duration of the contract also suggests a significant need for these components.

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 typically occurs when only one vendor can provide the required goods or services, or in cases of urgent need. The lack of competition means that pricing and innovation may not have been driven by market forces, potentially leading to higher costs than if it had been competed.

Taxpayer Impact: For taxpayers, a sole-source award means there was no opportunity to benefit from competitive bidding, which could have potentially lowered the overall cost of the navigational instruments.

Public Impact

The primary beneficiaries are likely military aviation operations requiring advanced navigational systems. The services delivered include the provision of critical navigational instruments for aircraft. The geographic impact is primarily within the United States, supporting defense logistics and operations. Workforce implications may include specialized manufacturing and engineering roles at Boeing and its suppliers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings for taxpayers.
Cost Plus Award Fee contracts can sometimes lead to cost overruns if not managed carefully.
Lack of competition may reduce pressure on the contractor to innovate or improve efficiency.

Positive Signals

Award to a major, experienced contractor like Boeing suggests a high likelihood of successful delivery.
Cost Plus Award Fee structure provides incentives for performance and meeting program objectives.
The contract duration indicates a stable, long-term need, potentially supporting predictable production.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on navigational instruments. This is a highly specialized area within the broader defense industry, characterized by high barriers to entry due to technological complexity and stringent quality requirements. The market for such systems is dominated by a few large, established aerospace companies. Spending in this category is driven by the need for advanced avionics to ensure safe and effective military operations.

Small Business Impact

This contract does not appear to have a small business set-aside. As a sole-source award to a large prime contractor, there is a possibility for subcontracting opportunities to small businesses within Boeing's supply chain. However, the extent of small business participation would depend on Boeing's subcontracting plan and the availability of small businesses capable of meeting the specific requirements for these specialized navigational instruments.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance, quality, and compliance with contract terms. The Cost Plus Award Fee structure includes mechanisms for performance evaluation and award fees, providing a degree of oversight on contractor performance. Transparency may be limited due to the sole-source nature and proprietary information related to specialized technology.

Related Government Programs

Aircraft Navigation Systems
Avionics Manufacturing
Defense Procurement
Aerospace Components

Risk Flags

Sole-source award
Cost Plus Award Fee contract type
Potential for cost overruns
Limited competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.8 million to THE BOEING COMPANY. 200405!000411!5700!GD50 !OKLAHOMA CITY ALC/LID !F4261099D0006 !A!N! !N!SD17 !02 !20031218!20040930!947764452!947764452!009256819!N!THE BOEING COMPANY !801 IRVING WICK DR W !HEATH !OH!43056!34748!089!39!HEATH !LICKING !OHIO !+000007351913!N!N!000000000000!6605!NAVIGATIONAL INSTRUMENTS !A1C!OTHER AIRCRAFT EQUIPMENT !000 !* !336413!E! !5!A!S!C! ! !99990909!B! ! !A! !D!U!R!1!001!N!1G!A!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! ! ! ! !0001! !

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 $33.8 million.

What is the period of performance?

Start: 2003-12-18. End: 2006-12-31.

What is the specific type of navigational instrument being procured, and what are its key functionalities?

The contract specifies 'NAVIGATIONAL INSTRUMENTS' under the Product Service Code (PSC) 6605. While the exact model or specific functionalities are not detailed in the provided data, this category generally includes equipment such as GPS receivers, inertial navigation systems (INS), flight management systems (FMS), radar altimeters, and other sensors crucial for determining an aircraft's position, altitude, and trajectory. These instruments are vital for safe flight operations, particularly in complex airspace or during missions requiring precise navigation.

How does the $33.8 million contract value compare to similar procurements for navigational instruments?

Benchmarking this $33.8 million contract value is challenging without access to a comprehensive database of similar sole-source procurements for highly specialized navigational instruments. However, for context, major avionics systems for large aircraft can range from hundreds of thousands to millions of dollars per unit. Given the three-year duration and the sole-source nature, this value suggests a significant quantity or a highly advanced, custom-developed system. The Cost Plus Award Fee structure also implies that the final cost could vary based on performance, making direct comparison difficult without knowing the final award fee.

What are the primary risks associated with a sole-source award for critical defense equipment like navigational instruments?

The primary risks associated with a sole-source award for critical defense equipment are reduced price competition, potentially leading to higher costs for the government and taxpayers. There's also a risk of vendor lock-in, where the government becomes dependent on a single supplier, limiting future flexibility. Furthermore, without competitive pressure, the contractor might have less incentive to innovate or improve efficiency. For critical components like navigational instruments, supply chain disruptions or the contractor's financial instability could pose significant risks to national security operations.

What is Boeing's track record with the Department of Defense for similar contracts?

The Boeing Company has an extensive and long-standing track record as a major contractor for the Department of Defense, supplying a vast array of aircraft, defense systems, and components. They are a primary manufacturer of military aircraft and have deep expertise in avionics, including navigation systems. While specific performance metrics for this particular contract are not detailed, Boeing's overall history with the DoD is characterized by large-scale, complex programs. Their experience suggests a high capability to deliver on such contracts, though like any large defense contractor, they have also faced scrutiny and challenges on various programs over the years.

What does the Cost Plus Award Fee (CPAF) contract type imply about the program's risk and performance expectations?

A Cost Plus Award Fee (CPAF) contract type indicates that the contractor is reimbursed for all allowable costs incurred, plus a base fee and an additional award fee. The award fee is contingent upon the contractor meeting or exceeding specific performance objectives defined in the contract. This structure is often used when the scope of work is not precisely defined or when there is a high degree of uncertainty. It implies that the government anticipates certain risks related to performance or technical challenges but wants to incentivize the contractor to achieve superior results beyond basic requirements, thereby balancing cost control with performance maximization.

What is the historical spending trend for navigational instruments within the Department of Defense?

Historical spending on navigational instruments within the Department of Defense is substantial and generally consistent, driven by the continuous need to equip new platforms and upgrade existing ones. While specific aggregate data for 'navigational instruments' alone can be difficult to isolate from broader avionics or aircraft equipment categories, the overall defense budget allocates significant funds to aviation systems. Spending fluctuates based on modernization programs, new aircraft procurements, and the lifecycle of existing fleets. The trend is towards increasingly sophisticated, integrated, and often networked navigation systems that enhance situational awareness and mission effectiveness.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 801 IRVING WICK DR W, HEATH, OH, 43056

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: F4261099D0006

IDV Type: IDC

Timeline