Boeing awarded $24.3M for Army's NGATS delivery order, a sole-source contract for electrical testing instruments

Contract Overview

Contract Amount: $24,318,089 ($24.3M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2023-09-08

End Date: 2025-08-31

Contract Duration: 723 days

Daily Burn Rate: $33.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NGATS DELIVERY ORDER

Place of Performance

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

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $24.3 million to THE BOEING COMPANY for work described as: NGATS DELIVERY ORDER Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns and limited market engagement. 2. The contract's duration of 723 days suggests a significant need for these specialized electrical testing instruments. 3. Fixed-price contract type aims to control costs, but the lack of competition may hinder optimal value. 4. The specific nature of 'Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals' points to a niche requirement. 5. This award represents a small fraction of the Department of Defense's overall spending on instrumentation and testing equipment.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source contract is challenging due to the lack of comparable bids. The firm fixed-price structure provides some cost certainty for the government. However, without competitive pressure, it's difficult to ascertain if the pricing reflects the best possible value for these specialized electrical testing instruments. Further analysis would require understanding the specific technical requirements and the contractor's cost structure.

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 or when urgency dictates a rapid award. The lack of competition limits the government's ability to leverage market forces to achieve the lowest possible price and potentially explore innovative solutions from a broader range of suppliers.

Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of competitive bidding. This could lead to higher overall costs for the required instruments.

Public Impact

The primary beneficiaries are the Department of the Army, which will receive essential electrical testing and measurement instruments. These instruments are critical for ensuring the quality, reliability, and safety of electrical systems and components used by the Army. The contract supports the Army's operational readiness and maintenance capabilities for its diverse fleet of equipment. The geographic impact is primarily within Missouri, where the contract is being performed, potentially supporting local employment and economic activity.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential for cost savings.
Lack of transparency in the procurement process due to non-competitive nature.
Potential for vendor lock-in if specialized knowledge or tooling is required.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award to a known entity (The Boeing Company) may imply established quality and reliability.
Specific nature of the instruments suggests a critical need for Army operations.

Sector Analysis

The market for electrical testing and measurement instruments is diverse, ranging from general-purpose multimeters to highly specialized diagnostic equipment. This contract falls into the latter category, likely involving instruments tailored for specific military applications. The Department of Defense is a significant purchaser of such equipment, often requiring ruggedized and advanced capabilities beyond those found in the commercial sector. Spending benchmarks for similar specialized military instrumentation can vary widely based on complexity and quantity.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no information provided regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, unless Boeing voluntarily engages small businesses in its supply chain for this order.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and financial management regulations. The firm fixed-price nature provides a degree of accountability for the contractor to deliver the specified goods within the agreed-upon price. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Army Instrumentation and Test Equipment Procurement
Department of Defense Measurement and Signature Intelligence
Aerospace and Defense Manufacturing Contracts
Electrical and Electronic Measuring Instruments

Risk Flags

Sole-source award
Lack of competition
Potential for price inflation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.3 million to THE BOEING COMPANY. NGATS DELIVERY 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 Army).

What is the total obligated amount?

The obligated amount is $24.3 million.

What is the period of performance?

Start: 2023-09-08. End: 2025-08-31.

What is the specific technical capability of the NGATS delivery order instruments, and why is it considered sole-source?

The NGATS (likely referring to a specific program or system) delivery order is for 'Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals.' While the exact technical specifications are not detailed in the provided data, the 'sole-source' designation suggests that only The Boeing Company possesses the unique technical expertise, proprietary technology, or necessary certifications to produce these specific instruments for the Army's requirements. This could be due to highly specialized design, integration with existing Army systems, or unique manufacturing processes that are not readily available from other vendors. Without further documentation, the precise reasons for the sole-source justification remain speculative but typically revolve around unique technical capabilities or critical operational needs that cannot be met through competitive means.

How does the $24.3 million award compare to historical spending on similar Army instrumentation contracts?

Comparing this $24.3 million award to historical spending on similar Army instrumentation contracts requires access to a broader dataset of defense procurements. However, as a single delivery order, this amount is moderate within the context of large defense contracts. The Army procures a vast array of instrumentation for testing, calibration, and diagnostics across numerous platforms and systems. Awards for specialized, low-volume, or highly technical instruments can range from hundreds of thousands to tens of millions of dollars. The significance of this particular award lies less in its absolute dollar value and more in its sole-source nature and specific application within the Army's operational framework. Without specific comparable contract data, it's difficult to definitively state if this represents high or low spending relative to historical norms for this niche.

What are the primary risks associated with a sole-source award for critical military instrumentation?

The primary risks associated with a sole-source award for critical military instrumentation include potential price inflation due to the lack of competitive bidding, reduced incentive for the contractor to innovate or improve efficiency, and a lack of market validation for the chosen solution. Taxpayers may bear a higher cost than if the contract had been competed. Furthermore, reliance on a single supplier can create vulnerabilities in the supply chain, especially if the contractor faces production issues, financial instability, or geopolitical challenges. There's also a risk that the government might not be aware of superior or more cost-effective alternatives available in the market. Effective oversight and robust negotiation are crucial to mitigate these risks.

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

The Boeing Company has an extensive and long-standing track record as a major defense contractor for the Department of Defense, involved in a wide array of programs including aircraft, space systems, and defense electronics. While Boeing is more widely known for its large platforms, it also produces and integrates complex electronic systems, including those for testing, measurement, and simulation. Its history with the DoD includes numerous contracts for sophisticated equipment and services. For instrumentation specifically, Boeing's involvement would likely be tied to the systems it manufactures or integrates, ensuring that the necessary testing and diagnostic tools are available. Their established presence and experience suggest a capacity to deliver complex, high-specification equipment, though the specifics of their instrumentation-focused contracts would require deeper investigation.

How does the firm fixed-price contract type mitigate risks for this sole-source award?

The firm fixed-price (FFP) contract type is a key mechanism for mitigating risks associated with this sole-source award. Under an FFP contract, the price is set and not subject to adjustment based on the contractor's cost experience. This shifts the risk of cost overruns entirely to the contractor, The Boeing Company. For the government, this provides a high degree of cost certainty, meaning the total expenditure for the awarded amount is known upfront, assuming the scope of work remains unchanged. This is particularly valuable in sole-source situations where competitive benchmarking is absent. While it doesn't guarantee the 'best' price, it ensures that the government pays a predetermined amount, protecting against unexpected cost increases from the contractor's side.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

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: $24,318,089

Exercised Options: $24,318,089

Current Obligation: $24,318,089

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $340,466

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15QKN23D0007

IDV Type: IDC

Timeline