DoD awards $524.7M to Boeing for Navigation Systems, contract awarded without competition
Contract Overview
Contract Amount: $524,692,748 ($524.7M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 1987-05-15
End Date: 2008-06-30
Contract Duration: 7,717 days
Daily Burn Rate: $68.0K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Place of Performance
Location: TUKWILA, KING County, WASHINGTON, 98108
Plain-Language Summary
Department of Defense obligated $524.7 million to THE BOEING COMPANY for work described as: Key points: 1. Significant award to a major defense contractor. 2. Lack of competition raises concerns about price discovery. 3. Long contract duration suggests potential for cost overruns. 4. Focus on critical navigation systems for defense.
Value Assessment
Rating: questionable
The contract value is substantial, but without competitive bidding, it's difficult to assess if the pricing is optimal. The fixed-price incentive structure aims to control costs, but the long duration and sole-source nature warrant scrutiny.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded sole-source, meaning there was no open competition. This limits price discovery and potentially leads to higher costs for taxpayers as the contractor faces less pressure to offer the most competitive price.
Taxpayer Impact: The absence of competition for a contract of this magnitude could result in millions of dollars in overspending compared to a competitively bid scenario.
Public Impact
Taxpayers may be paying a premium due to the lack of competition. Reliance on a single contractor for critical defense systems poses a long-term risk. The extended contract period could lead to outdated technology if not managed carefully.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Long contract duration
- Potential for cost overruns
- Lack of transparency in pricing
Positive Signals
- Award to established, experienced contractor
- Focus on critical defense capability
Sector Analysis
This contract falls within the aerospace and defense manufacturing sector, specifically focusing on navigation systems. Spending in this area is critical for national security, but often involves high costs due to specialized technology and limited suppliers.
Small Business Impact
This contract was awarded directly to The Boeing Company, a large prime contractor. There is no indication of subcontracting opportunities for small businesses within the provided data.
Oversight & Accountability
The sole-source nature of this award necessitates robust oversight from the Department of Defense to ensure fair pricing and effective performance. Accountability for cost and schedule adherence is crucial given the contract's scale and duration.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award limits price competition.
- Long contract duration increases risk of cost escalation.
- Potential for technological obsolescence over the contract term.
- Lack of transparency in pricing due to no competitive bidding.
- High contract value warrants close scrutiny.
Tags
search-detection-navigation-guidance-aer, department-of-defense, wa, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $524.7 million to THE BOEING COMPANY. See the official description on USAspending.
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 $524.7 million.
What is the period of performance?
Start: 1987-05-15. End: 2008-06-30.
What specific factors justified the sole-source award for these navigation systems, and were alternatives thoroughly explored?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs that only one contractor can meet. A thorough review would involve documenting why other potential sources were deemed unsuitable and exploring if any form of competition, even limited, was feasible to ensure the best value for the government.
How will the Department of Defense mitigate the risks associated with a long-term, sole-source contract to prevent cost overruns and ensure technological relevance?
Mitigation strategies include stringent performance metrics, regular cost reviews, and incorporating clauses for technological updates or competitive re-evaluation at key milestones. Robust oversight by contracting officers and technical experts is essential to monitor contractor performance and control costs throughout the contract's lifecycle.
What is the projected return on investment or strategic advantage gained by the government through this significant expenditure on navigation systems?
The strategic advantage lies in ensuring the operational readiness and effectiveness of defense platforms reliant on these advanced navigation systems. The return on investment is measured in enhanced mission success, improved situational awareness, and potentially reduced risk to personnel and assets in complex operational environments.
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: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
Contractor Details
Address: MAIL STOP 40-72, SEATTLE
Business Categories: Category Business, Hispanic American Owned Business, Minority Owned Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $18,181,936
Exercised Options: $18,181,936
Current Obligation: $524,692,748
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Timeline
Start Date: 1987-05-15
Current End Date: 2008-06-30
Potential End Date: 2008-06-30 00:00:00
Last Modified: 2024-07-26
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