DoD Awards Boeing $929M for Space Vehicle Components, Fixed Price Incentive Contract
Contract Overview
Contract Amount: $1,234,620,419 ($1.2B)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2006-02-17
End Date: 2014-12-31
Contract Duration: 3,239 days
Daily Burn Rate: $381.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: 200610!000055!5700!FA8808!SMC/MLK !FA880806C0001 !A!N! !N! ! !20060217!20070731!928989730!928989730!009256819!N!BOEING SATELLITE SYSTEMS, INC !2260 E IMPERIAL HWY !EL SEGUNDO !CA!90245!22412!037!06!EL SEGUNDO !LOS ANGELES !CALIFORNIA!+000100582900!N!N!000148195269!1820!SPACE VEHICLE COMPONENTS !A2 !MISSILE AND SPACE SYSTEMS !326 !WIDEBAND GAPFILLER !334220!E! !1! ! ! ! ! !99990909!B! ! !A! !D!U!L!1!001!N!1G!A!Y!F! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!N! ! ! !Y! ! !0001! !
Place of Performance
Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245
Plain-Language Summary
Department of Defense obligated $1.23 billion to THE BOEING COMPANY for work described as: 200610!000055!5700!FA8808!SMC/MLK !FA880806C0001 !A!N! !N! ! !20060217!20070731!928989730!928989730!009256819!N!BOEING SATELLITE SYSTEMS, INC !2260 E IMPERIAL HWY !EL SEGUNDO !CA!90245!22412!037!06!EL SEGUNDO !LOS … Key points: 1. Significant contract value of $929M for space vehicle components. 2. Sole-source award to Boeing raises questions about competition and price discovery. 3. Potential risk associated with a fixed-price incentive contract structure. 4. Spending concentrated in the Defense sector, specifically missile and space systems.
Value Assessment
Rating: questionable
The contract value of $929M is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to similar space vehicle component contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This was a sole-source award, meaning there was no competition. This limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition in this sole-source award may result in taxpayers paying a premium for these space vehicle components.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. The long duration of the contract (over 8 years) could lock in potentially inflated prices. Reliance on a single supplier for critical space vehicle components could pose supply chain risks.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Fixed-price incentive contract
- Long contract duration
Positive Signals
- Award to established prime contractor (Boeing)
Sector Analysis
This contract falls within the Defense sector, specifically for missile and space systems. The total value of $929M is significant for this sub-sector, especially for components related to space vehicles.
Small Business Impact
The data does not indicate any specific provisions or considerations for small business participation in this contract. The award is to a large prime contractor, Boeing.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny. Further oversight is needed to ensure the pricing is fair and reasonable, and that the government received the best value.
Related Government Programs
- Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award
- Potential for cost overruns
- Lack of competitive pricing
- Long contract duration
- Limited small business participation
Tags
radio-and-television-broadcasting-and-wi, department-of-defense, ca, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.23 billion to THE BOEING COMPANY. 200610!000055!5700!FA8808!SMC/MLK !FA880806C0001 !A!N! !N! ! !20060217!20070731!928989730!928989730!009256819!N!BOEING SATELLITE SYSTEMS, INC !2260 E IMPERIAL HWY !EL SEGUNDO !CA!90245!22412!037!06!EL SEGUNDO !LOS ANGELES !CALIFORNIA!+000100582900!N!N!000148195269!1820!SPACE VEHICLE COMPONENTS !A2 !MISSILE AND SPACE SYSTEMS !326 !WIDEBAND GAPFILLER !334220!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 (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $1.23 billion.
What is the period of performance?
Start: 2006-02-17. End: 2014-12-31.
What was the justification for awarding this contract on a sole-source basis?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or a lack of viable alternative sources. Without specific documentation, it's impossible to confirm the exact reason. However, such awards necessitate rigorous justification to ensure taxpayer funds are used efficiently and that competition was genuinely not feasible.
What are the specific risks associated with a fixed-price incentive contract for space vehicle components?
Fixed-price incentive contracts aim to share cost savings or overruns between the government and contractor. Risks include potential for cost growth if targets are not met, contractor incentives to cut corners on quality to meet price targets, and the complexity of managing performance metrics and cost ceilings effectively. For high-value, complex items like space vehicle components, ensuring quality and performance alongside cost control is paramount.
How does the lack of competition impact the long-term effectiveness and innovation in this space vehicle component market?
A lack of sustained competition can stifle innovation and reduce the government's leverage in future procurements. Without market pressure, suppliers may have less incentive to invest in R&D or improve efficiency. This can lead to higher prices over time and potentially limit the availability of cutting-edge technologies, impacting the long-term effectiveness of space programs reliant on these components.
Industry Classification
NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing
Product/Service Code: SPACE VEHICLES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Address: 900 N SEPULVEDA BLVD, EL SEGUNDO, CA, 90245
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $241,483,723
Exercised Options: $250,481,949
Current Obligation: $1,234,620,419
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2006-02-17
Current End Date: 2014-12-31
Potential End Date: 2014-12-31 00:00:00
Last Modified: 2018-09-05
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