DoD's $220M contract for electrical signal instruments awarded to Boeing, spanning nearly 8 years

Contract Overview

Contract Amount: $220,017,047 ($220.0M)

Contractor: THE Boeing Company (0674)

Awarding Agency: Department of Defense

Start Date: 2003-09-05

End Date: 2012-01-31

Contract Duration: 3,070 days

Daily Burn Rate: $71.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Place of Performance

Location: SAINT LOUIS, ST. LOUIS County, MISSOURI, 63134, UNITED STATES OF AMERICA

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $220.0 million to THE BOEING COMPANY (0674) for work described as: Key points: 1. The contract's duration and significant value suggest a critical, long-term need for specialized instrumentation. 2. Awarded under full and open competition, indicating a broad market search for the best solution. 3. The firm-fixed-price structure shifts cost risk to the contractor, potentially incentivizing efficiency. 4. Performance was managed by the Defense Contract Management Agency, a standard oversight body for major defense contracts. 5. The contract falls within the Instrument Manufacturing subsector, crucial for defense readiness and testing. 6. A significant portion of the contract value was likely tied to the complexity and precision of the instruments.

Value Assessment

Rating: good

Benchmarking this contract's value is challenging without specific details on the instruments' capabilities and quantities. However, a $220 million award over nearly 8 years for specialized electrical signal measurement and testing equipment suggests a substantial investment. The firm-fixed-price contract type implies that the government sought predictable costs, and the competition level (full and open) suggests an effort to achieve fair market pricing. Without comparable contract data, a precise value-for-money assessment is difficult, but the duration and scope indicate a significant, ongoing requirement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, meaning all responsible sources were permitted to submit bids. This approach typically fosters a competitive environment, encouraging multiple bidders to offer their best pricing and technical solutions. The presence of four bidders (no=4) suggests a reasonable level of competition for this specialized requirement, which should have contributed to price discovery and potentially a more favorable outcome for the government.

Taxpayer Impact: Full and open competition generally benefits taxpayers by promoting market-driven pricing and ensuring that the government receives competitive offers, thereby maximizing the value of taxpayer funds.

Public Impact

The Department of Defense is the primary beneficiary, receiving critical instrumentation for testing and measurement. Services delivered include the provision of advanced instruments essential for maintaining and verifying electrical systems. The geographic impact is likely concentrated within DoD facilities and testing ranges, supporting national defense infrastructure. Workforce implications may include specialized manufacturing, engineering, and quality assurance roles within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to potential obsolescence of technology if not managed proactively.
Reliance on a single large contractor for such a critical need might pose supply chain risks.
Firm-fixed-price contracts can sometimes lead to contractor pressure to cut corners if not adequately monitored.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
Firm-fixed-price contract aligns cost control with contractor responsibility.
Long-term award indicates a stable, predictable need met by a single, significant contract.
Managed by DCMA, implying established oversight and quality assurance processes.

Sector Analysis

This contract falls within the broader 'Manufacturing' sector, specifically 'Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals' (NAICS 334515). This subsector is vital for defense, aerospace, and scientific research, providing the tools necessary for precision measurement and quality control. The market for such specialized instruments is often characterized by high barriers to entry due to technical expertise and R&D investment. Comparable spending benchmarks are difficult to establish without knowing the specific technical specifications of the instruments, but significant government investment in defense instrumentation is common.

Small Business Impact

The data indicates this contract was not set aside for small businesses (sb=false) and there is no explicit mention of subcontracting goals for small businesses. Given the scale and specialized nature of the contract, it is likely that the prime contractor, The Boeing Company, would handle the majority of the work. However, large defense contracts often include provisions for small business subcontracting, which would need to be verified through the contract details. Without specific subcontracting plans, the direct impact on the small business ecosystem for this particular award appears limited.

Oversight & Accountability

Oversight for this contract was likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance with contract terms, quality standards, and delivery schedules. The firm-fixed-price nature of the contract places a significant portion of the cost risk on the contractor, but government oversight would still be crucial to monitor performance, technical specifications, and delivery. Transparency would be facilitated through contract reporting mechanisms and potential audits. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Instrumentation Programs
Aerospace Manufacturing Contracts
Electrical Test Equipment Procurement
DoD Research and Development Support
Naval Aviation Support Systems

Risk Flags

Long contract duration may increase risk of technological obsolescence.
Potential for supply chain vulnerabilities given the specialized nature of instrumentation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $220.0 million to THE BOEING COMPANY (0674). See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is THE BOEING COMPANY (0674).

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $220.0 million.

What is the period of performance?

Start: 2003-09-05. End: 2012-01-31.

What specific types of electrical signal measurement and testing instruments were procured under this contract?

The contract details (NAICS 334515) indicate 'Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals.' This broad category suggests the procurement of sophisticated equipment used for diagnostics, calibration, and performance verification of electrical systems and components within the Department of Defense. Examples could include oscilloscopes, spectrum analyzers, signal generators, multimeters, and specialized testing rigs tailored for military applications, such as those found in aircraft, ships, or communication systems. The exact specifications would be detailed in the contract's Statement of Work (SOW), which is not provided here but would outline the precise technical requirements, performance standards, and intended use cases for these instruments.

How does the $220 million contract value compare to typical spending on similar defense instrumentation?

Assessing the $220 million value requires context regarding the specific instruments and their intended application. For highly specialized, technologically advanced instrumentation critical to defense platforms, this figure over nearly eight years (3070 days) is substantial but not necessarily outside the norm for major defense contracts. Large-scale procurements for complex systems, especially those requiring significant research, development, and long-term support, can easily reach these figures. Without specific benchmarks for comparable 'Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals' contracts, it's difficult to definitively state if it's high or low. However, the full and open competition suggests an effort to achieve market-based pricing for the required capabilities.

What were the key performance indicators (KPIs) or metrics used to evaluate The Boeing Company's performance on this contract?

While specific KPIs are not detailed in the provided summary data, typical performance metrics for such a contract would likely include adherence to delivery schedules, meeting stringent technical specifications and quality standards (e.g., MIL-STD requirements), reliability and performance of the delivered instruments, and responsiveness to any required modifications or support. The firm-fixed-price nature incentivizes on-time delivery and cost control. The Defense Contract Management Agency (DCMA) would have been responsible for monitoring these aspects, potentially through site visits, acceptance testing, and review of contractor progress reports. Failure to meet critical performance standards could result in penalties or contract termination.

What is the historical spending trend for 'Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals' within the Department of Defense?

Historical spending on 'Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals' (NAICS 334515) by the Department of Defense is generally significant and consistent, reflecting the continuous need for advanced testing and diagnostic equipment across all military branches. While specific aggregate figures for this NAICS code over time are not provided, defense budgets consistently allocate substantial funds towards acquiring and maintaining sophisticated hardware. This includes everything from basic measurement tools to highly specialized systems for radar, avionics, communications, and weapons platforms. Spending in this area tends to be driven by technological advancements, platform modernization programs, and readiness requirements, indicating a sustained demand for such manufacturing capabilities.

Were there any significant risks identified during the contract lifecycle, and how were they mitigated?

Potential risks for a contract of this nature and duration include technological obsolescence, supply chain disruptions, performance failures, and cost overruns (though mitigated by the FFP structure). Given the award was completed successfully (contract end date passed), it implies that risks were either managed effectively or did not materialize to a critical extent. Mitigation strategies likely involved robust contract oversight by DCMA, clear technical specifications, phased delivery schedules, and potentially contingency planning by Boeing for supply chain issues. The firm-fixed-price contract itself acts as a risk mitigation tool for the government regarding cost certainty. Specific identified risks and their mitigation plans would be documented within the contract's administrative files.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Boeing Company (UEI: 009256819)

Address: J S MCDONNELL BLVD, SAINT LOUIS, MO, 63166

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $441,421,815

Exercised Options: $363,557,330

Current Obligation: $220,017,047

Contract Characteristics

Cost or Pricing Data: NO

Timeline