DoD's $463M DRAGON CNS/ATM EMD Contract Awarded to Boeing Faces Competition Concerns
Contract Overview
Contract Amount: $463,095,561 ($463.1M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2011-07-08
End Date: 2020-08-31
Contract Duration: 3,342 days
Daily Burn Rate: $138.6K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: DRAGON CNS/ATM EMD PHASE I
Place of Performance
Location: TUKWILA, KING County, WASHINGTON, 98108
Plain-Language Summary
Department of Defense obligated $463.1 million to THE BOEING COMPANY for work described as: DRAGON CNS/ATM EMD PHASE I Key points: 1. Significant contract value of $463M for CNS/ATM EMD Phase I. 2. Sole-source award to The Boeing Company raises questions about competition. 3. Long contract duration (2011-2020) may indicate complex development. 4. Aircraft Manufacturing sector context is crucial for understanding cost drivers.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee (CPFF) structure, combined with a lack of available competition data, makes a direct pricing assessment difficult. Without benchmarks or comparable contracts, it's hard to determine if the $463M price is reasonable.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not available for competition, indicating a sole-source award to The Boeing Company. This limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition in this sole-source award likely results in a higher cost to taxpayers than if competitive bidding processes were utilized.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. The long duration of the contract suggests potential for cost overruns or scope creep. Dependence on a single contractor (Boeing) could pose supply chain or innovation risks. The effectiveness of the CNS/ATM system developed under this contract needs to be evaluated.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Cost-plus contract type
- Long contract duration
Positive Signals
- Award to established contractor (Boeing)
- Potential for critical system development
Sector Analysis
This contract falls within the Aircraft Manufacturing sector, specifically for CNS/ATM (Communication, Navigation, and Surveillance/Air Traffic Management) systems. Spending in this area is critical for modernizing air traffic control and ensuring flight safety, often involving complex, high-value development contracts.
Small Business Impact
There is no indication of small business participation in this contract. Sole-source awards often bypass opportunities for small businesses to compete and contribute to government projects.
Oversight & Accountability
The sole-source nature of this contract warrants close oversight to ensure cost control and adherence to the fixed fee. Transparency in reporting and regular performance reviews are essential for accountability.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award limits competition.
- Cost-plus contract type may inflate costs.
- Long contract duration increases risk of delays and cost overruns.
- Lack of transparency regarding competition justification.
- Potential for contractor lock-in.
Tags
aircraft-manufacturing, department-of-defense, wa, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $463.1 million to THE BOEING COMPANY. DRAGON CNS/ATM EMD PHASE I
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 Air Force).
What is the total obligated amount?
The obligated amount is $463.1 million.
What is the period of performance?
Start: 2011-07-08. End: 2020-08-31.
What specific factors necessitated a sole-source award for the DRAGON CNS/ATM EMD Phase I, and were alternatives explored?
The data indicates the contract was 'NOT AVAILABLE FOR COMPETITION,' suggesting potential reasons like unique technical requirements, proprietary technology, or urgent national security needs that only Boeing could fulfill at the time. However, without further documentation, it's unclear if less restrictive methods were thoroughly evaluated or if these justifications hold up under scrutiny.
How does the Cost Plus Fixed Fee (CPFF) structure impact cost control and potential for overruns in this $463M contract?
CPFF contracts share costs and profits, offering the contractor a guaranteed profit margin. While intended to incentivize completion, this structure can reduce the contractor's incentive to control costs rigorously, potentially leading to higher overall spending than fixed-price contracts. Close monitoring of expenditures and performance is crucial to mitigate this risk.
What is the projected long-term value and effectiveness of the DRAGON CNS/ATM system developed under this contract, considering its significant investment?
The long-term value hinges on the system's ability to modernize air traffic management, enhance safety, and improve efficiency. Its effectiveness will be measured by its operational performance, integration capabilities with existing infrastructure, and contribution to future air traffic control advancements. A thorough post-deployment evaluation is necessary.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 7755 E MARGINAL WAY S, SEATTLE, WA, 98108
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $469,833,167
Exercised Options: $469,676,984
Current Obligation: $463,095,561
Subaward Activity
Number of Subawards: 2
Total Subaward Amount: $85,133
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: F1962801D0016
IDV Type: IDC
Timeline
Start Date: 2011-07-08
Current End Date: 2020-08-31
Potential End Date: 2020-08-31 00:00:00
Last Modified: 2024-03-12
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