DoD Awards Raytheon $51.4M for AN/PSC-5D Radio Hardware
Contract Overview
Contract Amount: $51,416,710 ($51.4M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2009-09-28
End Date: 2011-08-31
Contract Duration: 702 days
Daily Burn Rate: $73.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: HARDWARE IN SUPPORT OF AN/PSC-5D RADIO SYSTEM
Place of Performance
Location: FORT WAYNE, ALLEN County, INDIANA, 46808, UNITED STATES OF AMERICA
State: Indiana Government Spending
Plain-Language Summary
Department of Defense obligated $51.4 million to RAYTHEON COMPANY for work described as: HARDWARE IN SUPPORT OF AN/PSC-5D RADIO SYSTEM Key points: 1. Significant award to a major defense contractor. 2. Focus on specialized radio communications equipment. 3. Sole-source procurement raises questions about price discovery. 4. Potential for limited competition in niche hardware markets.
Value Assessment
Rating: questionable
The award amount of $51.4 million for radio hardware is substantial. Without a competitive bidding process, it is difficult to assess if this price represents fair market value compared to similar contracts or commercial offerings.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, indicating a lack of competition. This method limits price discovery and may result in higher costs for the government compared to a fully competed procurement.
Taxpayer Impact: Taxpayers may bear a higher cost due to the absence of competitive pressure to reduce prices.
Public Impact
Ensures continued operational capability for critical radio systems. Supports a major defense contractor and its supply chain. Highlights reliance on specific vendors for specialized equipment.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of transparency in pricing
- Potential for cost overruns
Positive Signals
- Supports critical defense communications
- Award to established contractor
Sector Analysis
This contract falls within the Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing sector. Spending in this area is often driven by defense needs for specialized, high-reliability communication systems, which can command premium pricing due to R&D and niche manufacturing requirements.
Small Business Impact
The contract was awarded to Raytheon Company, a large prime contractor. There is no indication that small businesses were involved as subcontractors or directly in this sole-source award.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny to ensure the government received the best possible value. Further oversight may be needed to understand the justification for not competing the contract.
Related Government Programs
- Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source procurement
- Potential for inflated pricing
- Lack of competitive benchmarking
- Limited transparency on cost justification
Tags
radio-and-television-broadcasting-and-wi, department-of-defense, in, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $51.4 million to RAYTHEON COMPANY. HARDWARE IN SUPPORT OF AN/PSC-5D RADIO SYSTEM
Who is the contractor on this award?
The obligated recipient is RAYTHEON COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $51.4 million.
What is the period of performance?
Start: 2009-09-28. End: 2011-08-31.
What is the justification for the sole-source award of this contract?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the lack of other responsible sources capable of meeting the government's requirements within the necessary timeframe. For specialized military hardware like the AN/PSC-5D radio system, it's possible that only Raytheon possesses the necessary technical expertise, existing infrastructure, or intellectual property to fulfill the contract without significant delays or increased costs.
How does the lack of competition impact the overall cost-effectiveness of this procurement?
The absence of competition inherently limits the government's ability to leverage market forces to achieve the lowest possible price. Without competing bids, there is less pressure on the contractor to offer competitive pricing, potentially leading to higher unit costs than if the contract had been awarded through a competitive process. This can result in a less cost-effective use of taxpayer funds.
What is the long-term strategic implication of awarding such contracts on a sole-source basis?
Sole-source awards can foster dependency on specific contractors for critical systems, potentially reducing future competition and innovation. While sometimes necessary for specialized needs, a pattern of sole-source procurements may limit the government's flexibility, increase long-term costs, and hinder the development of alternative solutions or a broader industrial base.
Industry Classification
NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1010 PRODUCTION RD, FORT WAYNE, IN, 46808
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $51,416,710
Exercised Options: $51,416,710
Current Obligation: $51,416,710
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W15P7T09DK001
IDV Type: IDC
Timeline
Start Date: 2009-09-28
Current End Date: 2011-08-31
Potential End Date: 2011-08-31 00:00:00
Last Modified: 2015-07-16
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