Boeing awarded $98.4M for missile defense systems engineering, a sole-source R&D contract
Contract Overview
Contract Amount: $98,394,429 ($98.4M)
Contractor: THE Boeing Company
Awarding Agency: Department of Defense
Start Date: 2024-05-03
End Date: 2027-11-02
Contract Duration: 1,278 days
Daily Burn Rate: $77.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: R&D
Official Description: SYSTEMS ENGINEERING AND INTEGRATION SERVICES
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35824
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $98.4 million to THE BOEING COMPANY for work described as: SYSTEMS ENGINEERING AND INTEGRATION SERVICES Key points: 1. Contract awarded on a cost-plus-award-fee basis, allowing for performance incentives. 2. Sole-source award suggests limited market availability or unique contractor capabilities. 3. Long duration of 1278 days indicates a complex, ongoing program requirement. 4. Contract falls under R&D for physical and engineering sciences, aligning with advanced defense needs. 5. Awarded by the Missile Defense Agency, highlighting critical national security implications. 6. The contract's value is substantial within the R&D sector for this specific domain.
Value Assessment
Rating: fair
The contract's cost-plus-award-fee structure allows for flexibility but requires careful monitoring of costs and award fees to ensure value. Benchmarking against similar sole-source R&D contracts for complex defense systems is challenging due to unique requirements. However, the total value of $98.4 million over approximately 3.5 years suggests a significant investment in specialized engineering services. Without more comparable data, assessing the precise value-for-money is difficult, but the award fee mechanism aims to incentivize efficient performance.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the requirement. The lack of competition means that price discovery through market forces was not utilized, potentially leading to higher costs than if multiple bids were solicited. The Missile Defense Agency would have had to justify this sole-source award based on specific criteria.
Taxpayer Impact: For taxpayers, a sole-source award means less assurance of obtaining the best possible price. The government relies on negotiation and oversight to ensure fair pricing, rather than competitive pressure.
Public Impact
The primary beneficiaries are the Department of Defense and national security, through the advancement of missile defense capabilities. Services delivered include critical systems engineering and integration for complex defense platforms. The geographic impact is primarily within Alabama, where the contractor is located, potentially supporting local jobs and the defense industrial base. Workforce implications include employment for highly skilled engineers and technical specialists within The Boeing Company.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pressure, potentially impacting cost-effectiveness.
- Cost-plus-award-fee contracts require robust oversight to manage costs and ensure performance targets are met.
- The long contract duration could lead to scope creep if not managed tightly.
- Reliance on a single contractor for critical systems engineering may pose a long-term dependency risk.
Positive Signals
- Award fee structure incentivizes performance and successful outcomes.
- Boeing's established track record in aerospace and defense suggests technical competence.
- Focus on R&D indicates investment in future technological advancements for missile defense.
- Contract duration allows for sustained focus and development of complex systems.
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The Missile Defense Agency operates in a highly specialized segment of the defense industry, characterized by long development cycles, high technological complexity, and significant government investment. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of missile defense systems, but R&D contracts in this domain often represent substantial investments in innovation and national security.
Small Business Impact
This contract does not appear to involve a small business set-aside, as it was awarded to The Boeing Company, a large aerospace corporation. There is no explicit information regarding subcontracting plans for small businesses within the provided data. The focus on specialized R&D services may limit opportunities for broad small business participation, though specific components or support services could potentially be subcontracted.
Oversight & Accountability
Oversight for this contract will likely be managed by the Missile Defense Agency, with potential involvement from the Department of Defense's Inspector General. The cost-plus-award-fee structure necessitates rigorous financial and performance oversight to ensure that costs are reasonable and that award fees are earned based on objective performance metrics. Transparency will depend on the agency's reporting practices regarding contract performance and expenditures.
Related Government Programs
- Missile Defense Systems
- Advanced Research and Development
- Aerospace Engineering Services
- Department of Defense Contracts
- Systems Integration
Risk Flags
- Sole-source award
- Cost-plus-award-fee contract type
- Long contract duration
- Critical defense technology
Tags
research-and-development, missile-defense-agency, department-of-defense, alabama, definitive-contract, cost-plus-award-fee, sole-source, large-business, systems-engineering, integration-services, national-security
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $98.4 million to THE BOEING COMPANY. SYSTEMS ENGINEERING AND INTEGRATION SERVICES
Who is the contractor on this award?
The obligated recipient is THE BOEING COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Missile Defense Agency).
What is the total obligated amount?
The obligated amount is $98.4 million.
What is the period of performance?
Start: 2024-05-03. End: 2027-11-02.
What is The Boeing Company's track record with the Missile Defense Agency and similar R&D contracts?
The Boeing Company has a long and extensive history of working with the Department of Defense, including the Missile Defense Agency (MDA). They are a major prime contractor for numerous complex defense systems, including aircraft, satellites, and missile defense components. Their track record in R&D for advanced technologies is well-established, often involving large-scale, multi-year programs. Specific to MDA, Boeing has been involved in developing and integrating various elements of the missile defense architecture, such as radar systems, interceptors, and command and control systems. While specific performance metrics for past contracts are not detailed here, their continued selection for sole-source, high-value R&D awards suggests a perceived capability and reliability by the agency.
How does the $98.4 million value compare to other R&D contracts for missile defense systems?
The $98.4 million value for this 1278-day (approximately 3.5 year) contract is substantial, reflecting the complexity and critical nature of missile defense systems engineering and integration. While precise comparisons are difficult without access to proprietary contract databases and specific program details, R&D contracts for major defense platforms, especially those involving advanced technologies like missile defense, frequently run into hundreds of millions or even billions of dollars over their lifecycle. This particular award appears to be for a specific phase or set of services within a larger program. Its value is consistent with the high cost of specialized research, development, and integration required for cutting-edge defense capabilities.
What are the primary risks associated with this sole-source, cost-plus-award-fee contract?
The primary risks associated with this sole-source, cost-plus-award-fee (CPAF) contract are multifaceted. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher costs than if the contract were competed. The government must rely heavily on negotiation and oversight to ensure fair pricing. Secondly, CPAF contracts, while incentivizing performance, can be complex to administer. There's a risk of 'fee creep' if award criteria are not clearly defined or if performance metrics are subjective, leading to higher overall costs. Managing the 'cost' aspect requires diligent oversight to prevent overruns, and the 'award' aspect demands robust evaluation to ensure incentives are appropriately applied. Finally, a long-term reliance on a single contractor for critical systems engineering can create vendor lock-in and reduce flexibility.
How effective is the Missile Defense Agency in managing its R&D investments, and how does this contract fit into that?
The Missile Defense Agency (MDA) is tasked with developing and deploying a layered missile defense system to protect the United States and its allies. Its R&D investments are crucial for staying ahead of evolving threats. The agency has faced scrutiny over cost and schedule overruns in some programs, but also successes in delivering critical capabilities. This contract for systems engineering and integration is fundamental to ensuring that various missile defense components work together effectively. By investing in specialized R&D services, the MDA aims to enhance the performance, reliability, and interoperability of its systems. The effectiveness of this specific investment will depend on the rigorous oversight of the CPAF structure and the ultimate success of the integrated missile defense capabilities developed.
What are the historical spending patterns for systems engineering and integration services within the Department of Defense?
The Department of Defense (DoD) consistently allocates significant portions of its budget to research, development, testing, and evaluation (RDT&E), a substantial part of which goes towards systems engineering and integration (SE&I). SE&I is a critical discipline across all defense domains, ensuring that complex weapon systems, platforms, and networks function as intended and interoperate effectively. Historical spending patterns show a continuous and growing demand for these services, driven by the increasing complexity of military technology and the need for integrated defense capabilities. Agencies like the Missile Defense Agency, which manage highly complex, multi-component systems, are major spenders in this area. While specific figures fluctuate annually based on program priorities and budget allocations, SE&I represents a core and substantial expenditure category within the DoD's RDT&E portfolio.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
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: $565,207,702
Exercised Options: $189,766,597
Current Obligation: $98,394,429
Actual Outlays: $11,990,396
Subaward Activity
Number of Subawards: 52
Total Subaward Amount: $22,154,178
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2024-05-03
Current End Date: 2027-11-02
Potential End Date: 2033-11-02 00:00:00
Last Modified: 2025-12-16
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