Boeing awarded $126M contract for missile and space systems, with a 1,948-day duration

Contract Overview

Contract Amount: $63,838,185 ($63.8M)

Contractor: THE Boeing Company

Awarding Agency: Department of Defense

Start Date: 2006-05-31

End Date: 2011-09-30

Contract Duration: 1,948 days

Daily Burn Rate: $32.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200608!003571!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q06C0338 !A!N! !N! ! !20060531!20080930!126368257!126368257!009256819!N!THE BOEING COMPANY !499 BOEING BLVD SW !HUNTSVILLE !AL!35824!37000!089!01!HUNTSVILLE !MADISON !ALABAMA !+000029950000!Y!N!000000000000!1290!MISCELLANEOUS FIRE CONTROL EQUIPMENT !A2 !MISSILE AND SPACE SYSTEMS !000 !NOT DISCERNABLE !336411!E! !1! ! ! ! ! !99990909!B! ! !A! !A!N!J!2!001!B! !Z!N!A! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35824

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $63.8 million to THE BOEING COMPANY for work described as: 200608!003571!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q06C0338 !A!N! !N! ! !20060531!20080930!126368257!126368257!009256819!N!THE BOEING COMPANY !499 BOEING BLVD SW !HUNTSVILLE !AL!35824!37000!089!01!HUNTSVILLE !MADI… Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract value of $126,368,257 represents a significant investment in defense systems. 3. The duration of 1,948 days indicates a long-term need for these missile and space systems. 4. The primary contractor, The Boeing Company, is a major player in the aerospace and defense industry. 5. The contract falls under the 'Missile and Space Systems' category, highlighting its strategic importance. 6. The fixed-price nature of the contract aims to provide cost certainty for the government.

Value Assessment

Rating: good

The contract value of $126,368,257 for missile and space systems appears reasonable given the long duration of 1,948 days and the nature of defense contracting. Benchmarking against similar large-scale defense procurements for complex systems would provide further context, but the fixed-price structure suggests an effort to control costs. The number of bids received (2) is not explicitly stated in the provided data, but the 'full and open competition' designation implies multiple potential bidders.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit a bid. While the data shows two bids were considered (no: 2), the specific number of proposals received is not detailed. A competitive process like this generally leads to better price discovery and potentially more favorable terms for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: Taxpayers benefit from full and open competition as it typically drives down prices through market forces. This ensures that the government is receiving the best possible value for its investment in critical defense systems.

Public Impact

The primary beneficiary of this contract is the U.S. Department of the Army, which will receive advanced missile and space systems. The contract supports the development, production, and delivery of critical defense capabilities. The geographic impact is primarily centered around the contractor's facilities in Huntsville, Alabama, and potentially extends to military installations receiving the systems. This contract likely supports a significant number of jobs within The Boeing Company and its supply chain, particularly in the aerospace and defense manufacturing sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen technical challenges arise during the long contract duration.
Dependence on a single large contractor could create supply chain vulnerabilities.
The complexity of missile and space systems may lead to extended development timelines and potential delays.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
The fixed-price contract structure provides cost certainty for the government.
The Boeing Company has a strong track record in aerospace and defense, suggesting technical capability.
The contract duration aligns with the long-term strategic needs of the U.S. Army.

Sector Analysis

The aerospace and defense sector is characterized by high R&D investment, complex manufacturing processes, and significant government procurement. This contract for missile and space systems fits squarely within this domain, which is a critical component of national security spending. The market for such systems is dominated by a few large, specialized contractors like Boeing. Comparable spending benchmarks would involve looking at other major defense contracts for weapon systems and space technology, which often run into hundreds of millions or billions of dollars.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (sb: false). While there is no direct information on subcontracting plans, large prime contractors like Boeing are often required to have small business subcontracting goals as part of their agreements. The absence of a small business set-aside means that opportunities for small businesses would primarily come through subcontracting opportunities with the prime contractor.

Oversight & Accountability

Oversight for this contract would typically be managed by the U.S. Army Contracting Command, with potential involvement from the Defense Contract Management Agency (DCMA) for performance monitoring. Accountability measures are embedded in the contract's terms and conditions, including delivery schedules and performance specifications. Transparency is generally maintained through contract award announcements and public contract databases, though specific details of technical performance may be sensitive.

Related Government Programs

Missile Systems Procurement
Space Systems Development
Advanced Weapons Systems
Department of Defense Major Contracts
Aerospace Manufacturing Contracts

Risk Flags

Long contract duration increases risk of cost escalation and technological obsolescence.
Complexity of missile and space systems can lead to unforeseen development challenges.
Dependence on a single large contractor may pose supply chain risks.
Potential for schedule delays in advanced technology development.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $63.8 million to THE BOEING COMPANY. 200608!003571!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q06C0338 !A!N! !N! ! !20060531!20080930!126368257!126368257!009256819!N!THE BOEING COMPANY !499 BOEING BLVD SW !HUNTSVILLE !AL!35824!37000!089!01!HUNTSVILLE !MADISON !ALABAMA !+000029950000!Y!N!000000000000!1290!MISCELLANEOUS FIRE CONTROL EQUIPMENT !A2 !MISSILE AND SPACE SYSTEMS !000 !NOT DISCERNABLE !336411!E! !1! ! ! ! ! !999

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 $63.8 million.

What is the period of performance?

Start: 2006-05-31. End: 2011-09-30.

What is The Boeing Company's track record with similar missile and space systems contracts for the U.S. Army?

The Boeing Company has a long and extensive history of developing and producing complex missile and space systems for various branches of the U.S. military, including the Army. They have been involved in programs ranging from tactical missiles to strategic defense systems and space launch vehicles. While specific performance metrics for past contracts are not detailed here, their continued success in securing large-scale defense contracts suggests a generally positive track record in terms of technical capability and program execution. However, like any large defense contractor, they may have faced challenges or delays on specific programs, which would be detailed in more in-depth program reviews.

How does the $126 million contract value compare to other U.S. Army procurements for missile and space systems?

The $126 million contract value for missile and space systems is a substantial amount, indicative of a significant procurement. However, within the broader context of U.S. Army and Department of Defense spending on major weapon systems and space technology, it falls into the mid-to-large range. Procurements for next-generation fighter jets, submarines, or large-scale satellite constellations can easily reach billions of dollars. This contract's value should be assessed relative to the specific type and quantity of missile and space systems being acquired, as well as the contract's duration. A more precise comparison would require analyzing the unit cost and scope of work against similar historical procurements.

What are the primary risks associated with this long-term contract for missile and space systems?

The primary risks associated with this long-term contract include technological obsolescence, as missile and space technology evolves rapidly; potential cost overruns due to the complexity and long duration, especially if unforeseen technical challenges arise; schedule delays stemming from development hurdles or supply chain disruptions; and program execution risks, where the contractor may struggle to meet performance specifications or delivery timelines. Furthermore, geopolitical shifts or changes in defense priorities could impact the long-term need for these specific systems, although the initial award suggests a current strategic imperative.

What is the expected program effectiveness and impact of these missile and space systems?

The expected program effectiveness is to enhance the U.S. Army's capabilities in areas such as missile defense, strategic deterrence, space-based intelligence, surveillance, and reconnaissance, or tactical missile deployment. The specific impact will depend on the exact nature of the systems procured. These systems are designed to provide a critical advantage in modern warfare and national security by offering advanced threat detection, engagement, or communication capabilities. Their deployment is intended to bolster readiness, deter potential adversaries, and support broader military objectives in complex operational environments.

How has federal spending on missile and space systems evolved over the past decade?

Federal spending on missile and space systems has generally seen fluctuations driven by evolving threat assessments, technological advancements, and shifting defense priorities. While specific figures for this contract are not indicative of overall trends, the Department of Defense's budget consistently allocates significant resources to these areas. There has been a growing emphasis on space-based capabilities, including satellite constellations for communication and intelligence, as well as modernization of existing missile defense systems. Funding levels are often influenced by major strategic reviews and the perceived need to maintain technological superiority over potential adversaries.

What is the significance of the 'MISCELLANEOUS FIRE CONTROL EQUIPMENT' classification (NA: 336411) in relation to 'MISSILE AND SPACE SYSTEMS' (PSC: A2)?

The National Item Identification Number (NIIN) 336411, 'MISCELLANEOUS FIRE CONTROL EQUIPMENT,' and the Product Service Code (PSC) A2, 'MISSILE AND SPACE SYSTEMS,' are related but distinct classifications. Fire control equipment is integral to the operation of many weapon systems, including missiles, as it directs the aim and firing of ordnance. Therefore, 'miscellaneous fire control equipment' could encompass components, subsystems, or related technologies that are essential for the functioning of 'missile and space systems.' The contract likely involves the procurement of systems where fire control is a critical, albeit not the sole, element, or it could be a broader classification that includes fire control as a key feature of the missile and space systems being acquired.

Industry Classification

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

Product/Service Code: FIRE CONTROL EQPT.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 499 BOEING BLVD SW, HUNTSVILLE, AL, 05

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $63,838,185

Exercised Options: $63,838,185

Current Obligation: $63,838,185

Contract Characteristics

Cost or Pricing Data: NO

Timeline