Boeing Awarded $1.32 Billion for Communications Security Equipment and Components
Contract Overview
Contract Amount: $1,324,970,593 ($1.3B)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 1997-11-12
End Date: 2018-01-31
Contract Duration: 7,385 days
Daily Burn Rate: $179.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: IT
Official Description: 199810!5700!0012!GV56 !ESC/TWK !F1962897C0112 !A!*!* !19971112!20010930!009256819!009256819!009256819!N!81205!BOEING COMPANY, THE INC !7755 E MARGINAL WAY S !SEATTLE !WA!98108!63000!033!53!SEATTLE !KING !WASHINGTON!0001!+000452438199!Y!N!000000000000!5810!COMMUNICATIONS SECURITY EQUIP AND COMPS !A7 !ELECTRONICS AND COMMUNICATION !3AEC!E-3A !3663!3!*!*!*!B!N!Z!B !N!L!1!001!N!4A!Z!Y!A!* !* !N!C!*!Z!Z!A!A!A!*!* !*!N!A!B!N!*!*!*!*!*!
Place of Performance
Location: TUKWILA, KING County, WASHINGTON, 98108
Plain-Language Summary
Department of Defense obligated $1.32 billion to THE BOEING COMPANY for work described as: 199810!5700!0012!GV56 !ESC/TWK !F1962897C0112 !A!*!* !19971112!20010930!009256819!009256819!009256819!N!81205!BOEING COMPANY, THE INC !7755 E MARGINAL WAY S !SEATTLE !WA!98108!63000!033!53!SEATTLE !KING … Key points: 1. The contract value is substantial at over $1.3 billion. 2. The sole-source nature raises questions about price discovery and competition. 3. The contract spans over 20 years, indicating a long-term need. 4. The sector is IT/Defense, a critical area for national security.
Value Assessment
Rating: questionable
The contract value of $1.32 billion over 20 years is difficult to benchmark without specific unit cost data. However, the extended duration and sole-source nature suggest potential for inflated pricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs for taxpayers as there was no competitive pressure to drive down prices.
Taxpayer Impact: The lack of competition on a contract of this magnitude likely results in a higher cost to taxpayers than if it had been competitively bid.
Public Impact
Taxpayers may be overpaying due to the lack of competition. Long-term reliance on a single vendor could stifle innovation. National security implications of critical communications equipment being solely sourced.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Long contract duration
- Lack of transparency in pricing
Positive Signals
- Critical technology acquisition
- Established vendor relationship
Sector Analysis
This contract falls within the IT and Defense sectors, specifically for communications security equipment. Spending in this area is crucial for national security, but often involves high costs and complex procurement processes.
Small Business Impact
There is no indication of small business participation in this contract. The award to a large prime contractor like Boeing suggests that subcontracting opportunities for small businesses may be limited.
Oversight & Accountability
The sole-source nature of this contract warrants close oversight to ensure fair pricing and prevent potential waste, fraud, and abuse. Transparency in the justification for the sole-source award is crucial.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competition
- Extended contract duration
- Potential for cost overruns
- Limited vendor innovation
- Dependency on a single supplier
Tags
aircraft-manufacturing, department-of-defense, wa, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.32 billion to THE BOEING COMPANY. 199810!5700!0012!GV56 !ESC/TWK !F1962897C0112 !A!*!* !19971112!20010930!009256819!009256819!009256819!N!81205!BOEING COMPANY, THE INC !7755 E MARGINAL WAY S !SEATTLE !WA!98108!63000!033!53!SEATTLE !KING !WASHINGTON!0001!+000452438199!Y!N!000000000000!5810!COMMUNICATIONS SECURITY EQUIP AND COMPS !A7 !ELECTRONICS AND COMMUNICATION !3AEC!E-3A !3663!3!*!*!*!B!N!Z!B !N!L!1!0
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 $1.32 billion.
What is the period of performance?
Start: 1997-11-12. End: 2018-01-31.
What was the justification for awarding this contract on a sole-source basis, and were all reasonable efforts made to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs that cannot be met by other vendors. Without access to the specific justification documents, it's impossible to definitively assess if fair and reasonable pricing was ensured. However, the absence of competition inherently raises concerns about the government's ability to secure the best possible price.
What are the risks associated with a 20-year sole-source contract for critical communications security equipment?
A 20-year sole-source contract for critical communications security equipment presents significant risks. These include potential price escalation over time, lack of incentive for the vendor to innovate or improve technology, and vulnerability if the vendor faces financial or operational difficulties. It also limits the government's ability to adopt newer, potentially more effective technologies from other sources.
How does the long duration and sole-source nature of this contract impact the overall effectiveness of the government's investment in communications security?
The long duration and sole-source nature may hinder the overall effectiveness of the government's investment. While ensuring continuity, it could lead to the procurement of outdated technology at potentially inflated prices. This contrasts with a competitive environment that would drive innovation and potentially yield more advanced and cost-effective solutions over the contract's lifespan.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
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: $1,338,402,387
Exercised Options: $1,338,402,387
Current Obligation: $1,324,970,593
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 1997-11-12
Current End Date: 2018-01-31
Potential End Date: 2018-01-31 00:00:00
Last Modified: 2018-08-09
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