Boeing's $261M DoD contract for strategic deterrent technology maturation shows engineering services focus
Contract Overview
Contract Amount: $261,115,400 ($261.1M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2017-08-21
End Date: 2020-08-20
Contract Duration: 1,095 days
Daily Burn Rate: $238.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: IGF::OT::IGF GROUND BASED STRATEGIC DETTERENT TECHNOLOGY MATURATION AND RISK REDUCTION
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35824
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $261.1 million to THE BOEING COMPANY for work described as: IGF::OT::IGF GROUND BASED STRATEGIC DETTERENT TECHNOLOGY MATURATION AND RISK REDUCTION Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The cost-plus-fixed-fee structure indicates potential for cost overruns, requiring close oversight. 3. The contract duration of 1095 days (3 years) allows for sustained development and risk reduction. 4. Focus on technology maturation and risk reduction points to a forward-looking defense investment. 5. The award to a single contractor, The Boeing Company, highlights their established role in this sector.
Value Assessment
Rating: fair
Benchmarking the value of this specific contract is challenging without more granular data on the engineering services provided. The cost-plus-fixed-fee (CPFF) pricing structure, while common for R&D and complex projects, carries inherent risks of cost escalation. Compared to similar technology maturation contracts, the $261 million value over three years appears substantial, necessitating rigorous performance monitoring to ensure value for money.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded through full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 3 bidders suggests a moderate level of competition for this specialized engineering service. While competition is present, the specific nature of strategic deterrent technology may limit the number of capable bidders.
Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering price discovery and potentially leading to more competitive pricing. However, the specialized nature of the work might mean that even with competition, costs remain high due to the unique expertise required.
Public Impact
The primary beneficiaries are the Department of Defense and national security, through the advancement of strategic deterrent capabilities. Services delivered include engineering, technology maturation, and risk reduction for critical defense systems. The geographic impact is primarily national, focusing on defense infrastructure and strategic planning. Workforce implications include employment for highly skilled engineers and technical specialists within The Boeing Company and its potential subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee contracts can lead to higher final costs than fixed-price contracts if not managed effectively.
- The specialized nature of strategic deterrent technology may limit the pool of potential competitors, potentially impacting price competitiveness.
- Long-term contracts require sustained oversight to ensure objectives are met and funds are used efficiently.
Positive Signals
- Awarded through full and open competition, indicating a structured procurement process.
- Focus on technology maturation and risk reduction suggests proactive investment in future capabilities.
- The contract is with a major defense contractor with a proven track record in complex systems development.
Sector Analysis
This contract falls within the Defense sector, specifically focusing on engineering services for strategic deterrent technologies. The market for such specialized defense engineering is dominated by a few large, established contractors. Spending in this area is driven by national security priorities and the need to maintain technological superiority. Comparable spending benchmarks would likely be found within other advanced research and development programs for major defense systems.
Small Business Impact
The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large-scale engineering services contract awarded to a major prime contractor, the primary impact on small businesses would likely be through subcontracting opportunities. The extent of small business participation will depend on Boeing's subcontracting plan and the availability of specialized small businesses capable of supporting this complex project.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Defense's contract management and inspection agencies, such as the Defense Contract Management Agency (DCMA). The cost-plus-fixed-fee structure necessitates robust financial oversight to monitor expenditures and ensure compliance with the contract terms. Transparency would be maintained through regular reporting requirements from the contractor and potential audits.
Related Government Programs
- Strategic Deterrent Systems
- Missile Defense Programs
- Advanced Weapons Development
- Aerospace Engineering Services
- Department of Defense Research and Development
Risk Flags
- Cost Overrun Risk (CPFF)
- Limited Competition Pool
- Technology Obsolescence
- Program Schedule Delays
Tags
defense, department-of-defense, engineering-services, definitive-contract, cost-plus-fixed-fee, full-and-open-competition, technology-maturation, risk-reduction, strategic-deterrent, alabama, the-boeing-company
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $261.1 million to THE BOEING COMPANY. IGF::OT::IGF GROUND BASED STRATEGIC DETTERENT TECHNOLOGY MATURATION AND RISK REDUCTION
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 $261.1 million.
What is the period of performance?
Start: 2017-08-21. End: 2020-08-20.
What is The Boeing Company's track record with similar Department of Defense technology maturation contracts?
The Boeing Company has a long and extensive history of performing complex technology maturation and risk reduction contracts for the Department of Defense across various platforms, including strategic systems, aircraft, and space systems. They are a primary contractor for numerous critical defense programs, often involved in the early stages of development and integration. Their track record typically involves managing large, multi-year programs with significant R&D components. While specific performance metrics for past contracts are often sensitive, their continued selection for such high-value, critical work suggests a generally positive performance history and capability in delivering advanced technological solutions within the defense sector.
How does the $261 million value compare to other engineering services contracts for strategic deterrent technology?
The $261 million value for this three-year contract for strategic deterrent technology maturation and risk reduction is substantial, reflecting the complexity and critical nature of the work. Benchmarking against precise, publicly available data for similar niche contracts is challenging due to the classified or sensitive nature of strategic deterrent technologies. However, in the broader context of large-scale defense engineering services and R&D programs, this figure is within the expected range for major system development phases. Contracts for foundational technology development, system integration, and risk reduction for strategic assets often represent significant investments, especially when awarded to prime contractors like Boeing.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for this type of work?
The primary risk with a Cost Plus Fixed Fee (CPFF) contract, like the one awarded to Boeing, is the potential for cost overruns. In a CPFF structure, the contractor is reimbursed for allowable costs plus a predetermined fixed fee representing profit. If the project's costs exceed initial estimates, the government bears the burden of these increased costs, while the contractor's fee remains fixed. This necessitates stringent oversight by the contracting agency to monitor expenditures, validate costs, and ensure efficient resource utilization. For technology maturation and risk reduction, where R&D uncertainties are high, CPFF can incentivize innovation but also requires robust management to control the overall financial outlay and prevent scope creep.
How effective is full and open competition in ensuring value for money for specialized defense engineering services?
Full and open competition is generally the most effective method for ensuring value for money, as it allows the government to solicit bids from all responsible sources, fostering price discovery and encouraging contractors to offer their best terms. For specialized defense engineering services, however, the number of capable bidders may be limited due to the unique technical expertise, security clearances, and infrastructure required. While this contract had 3 bidders, indicating some level of competition, the specialized nature means that the competitive landscape might not be as broad as for more common services. Therefore, while full and open competition provides the framework for value, the actual realization of optimal value also depends on the specific market dynamics and the government's ability to clearly define requirements and evaluate proposals effectively.
What is the historical spending trend for strategic deterrent technology maturation within the Department of Defense?
Historical spending trends for strategic deterrent technology maturation within the Department of Defense are generally characterized by consistent, significant investment driven by national security imperatives and the lifecycle of existing strategic assets. While specific figures fluctuate year-to-year based on modernization cycles, threat assessments, and technological advancements, the overall commitment to maintaining and enhancing strategic deterrence capabilities remains a high priority. Funding often flows through various accounts, including R&D, procurement, and sustainment, supporting programs related to nuclear command, control, and communications (NC3), intercontinental ballistic missiles (ICBMs), submarine-launched ballistic missiles (SLBMs), and strategic bombers. Contracts like the one awarded to Boeing are indicative of ongoing efforts to ensure these capabilities remain effective and technologically relevant against evolving threats.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: FA821916RGBSD
Offers Received: 3
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 499 BOEING BLVD SW, HUNTSVILLE, AL, 35824
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: $349,159,962
Exercised Options: $349,159,962
Current Obligation: $261,115,400
Subaward Activity
Number of Subawards: 194
Total Subaward Amount: $54,000,212
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2017-08-21
Current End Date: 2020-08-20
Potential End Date: 2020-08-20 00:00:00
Last Modified: 2024-07-02
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