Raytheon Company awarded $24M contract for engineering services, with a significant portion allocated to Nevada

Contract Overview

Contract Amount: $23,978,436 ($24.0M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2008-01-24

End Date: 2009-12-16

Contract Duration: 692 days

Daily Burn Rate: $34.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: Defense

Official Description: OAWR 00-0008-SRP-DMPRC-0001

Place of Performance

Location: LAS VEGAS, CLARK County, NEVADA, 89119

State: Nevada Government Spending

Plain-Language Summary

Department of Defense obligated $24.0 million to RAYTHEON COMPANY for work described as: OAWR 00-0008-SRP-DMPRC-0001 Key points: 1. Contract value of approximately $24 million for engineering services. 2. Awarded to Raytheon Company, a major defense contractor. 3. Competition was full and open, suggesting a competitive bidding process. 4. Contract type is Time and Materials, which can pose cost control challenges. 5. Performance period spans from January 2008 to December 2009. 6. Significant geographic concentration in Nevada, indicated by the contract's 'NV' status. 7. This award represents a small fraction of the Department of Defense's overall engineering services budget.

Value Assessment

Rating: fair

The contract value of $23,978,435.98 for engineering services over a two-year period appears reasonable given the scope. However, the 'Time and Materials' pricing structure warrants scrutiny as it can lead to cost overruns if not managed effectively. Benchmarking against similar engineering service contracts awarded by the Department of Defense during the 2008-2009 period would provide a clearer picture of value for money. The contract's duration and the specific nature of the engineering services are key factors in assessing its overall value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION,' indicating that all responsible sources were permitted to submit bids. This suggests a robust bidding environment. The presence of two bids (no: 2) implies some level of competition, though the exact number of bidders can influence price discovery. A higher number of bidders generally leads to more competitive pricing for the government.

Taxpayer Impact: A full and open competition with multiple bidders is generally favorable for taxpayers, as it is expected to drive down prices and ensure the government receives the best value for its investment.

Public Impact

The primary beneficiaries are likely the Department of the Army and potentially other branches of the Department of Defense requiring specialized engineering services. The services delivered are engineering-related, though the specific nature is not detailed in the provided data. A significant portion of the contract's performance is geographically linked to Nevada. The contract supports the workforce employed by Raytheon Company and potentially its subcontractors involved in delivering these engineering services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials contract type can lead to cost escalation if not closely monitored.
Limited competition indicated by only two bids could potentially result in higher prices than a more competitive scenario.
The specific engineering services are not detailed, making it difficult to assess the full scope and potential risks.
The contract duration of nearly two years may present challenges in adapting to evolving technological needs or requirements.

Positive Signals

Awarded through full and open competition, ensuring a broad range of potential offerors.
Raytheon Company is a well-established defense contractor with a track record in engineering services.
The contract is for essential engineering services supporting defense operations.
The contract was awarded early in the fiscal year, allowing ample time for performance.

Sector Analysis

The engineering services sector within the defense industry is critical for supporting military operations, research, and development. This contract falls under the broader category of professional, scientific, and technical services. The market for defense engineering services is substantial, with significant government spending allocated annually. Comparable spending benchmarks would involve analyzing other engineering service contracts awarded by the DoD, particularly those for similar types of services and contract durations.

Small Business Impact

The provided data indicates that small business participation (sb: false) was not a specific set-aside requirement for this contract. There is no explicit information on subcontracting plans for small businesses. Without this information, it's difficult to assess the direct impact on the small business ecosystem, though prime contractors like Raytheon often have subcontracting programs that may include small businesses.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures would be tied to the delivery order terms and conditions, performance metrics, and payment schedules. Transparency is generally facilitated through contract databases like FPDS-NG, where basic award information is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Engineering Services
Raytheon Company Contracts
Time and Materials Contracts
Nevada Federal Contracts
Army Engineering Support

Risk Flags

Potential for cost overruns due to Time and Materials pricing structure.
Limited competition indicated by only two bids.
Lack of detailed information on specific engineering services provided.
Geographic concentration in Nevada may limit broader applicability or benefits.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.0 million to RAYTHEON COMPANY. OAWR 00-0008-SRP-DMPRC-0001

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 $24.0 million.

What is the period of performance?

Start: 2008-01-24. End: 2009-12-16.

What is Raytheon Company's track record with the Department of Defense for engineering services?

Raytheon Company, now part of RTX, has a long and extensive history of providing a wide array of engineering and technical services to the Department of Defense (DoD). Their portfolio includes complex systems engineering, software development, hardware integration, and sustainment services across various military platforms and domains. Historically, Raytheon has been a significant recipient of DoD contracts, often securing awards for large-scale, high-technology projects. While specific performance metrics for individual contracts are not always publicly detailed, their consistent presence as a prime contractor suggests a generally satisfactory performance record, though like any large contractor, they have faced scrutiny and reviews on specific programs. Analyzing their past performance on similar engineering contracts, including any reported issues or successes, would provide a more nuanced understanding.

How does the $24 million contract value compare to similar engineering service contracts awarded by the DoD?

The $23,978,435.98 contract value for engineering services awarded to Raytheon Company is a moderate-sized award within the vast landscape of Department of Defense (DoD) procurement. The DoD awards billions of dollars annually for engineering and technical services, ranging from small, specialized support contracts to multi-billion dollar platform development programs. A $24 million contract for a nearly two-year duration (2008-2009) would be considered a mid-tier award. To provide a precise comparison, one would need to benchmark it against other 'Engineering Services' (NAICS 541330) contracts awarded by the DoD during the same fiscal years, considering factors like contract type (e.g., FFP, T&M), specific service requirements, and the procuring agency. Without this granular comparison, it's difficult to definitively state if it represents exceptional value or is on the higher end.

What are the primary risks associated with a Time and Materials (T&M) contract of this nature?

The primary risk associated with a Time and Materials (T&M) contract, such as this $24 million award to Raytheon, is the potential for cost escalation. Unlike Fixed-Price contracts, T&M contracts reimburse the contractor for the actual labor hours and material costs incurred, plus a fixed fee or profit. This structure places a greater burden on the government to closely monitor contractor effort and ensure efficiency. If labor hours are not diligently tracked, or if material costs are inflated, the total contract cost can significantly exceed initial estimates. For the government, effective oversight, clear task definitions, and robust reporting requirements are crucial to mitigate these risks and ensure fair pricing. The duration of the contract also amplifies this risk, as inefficiencies can compound over a longer period.

How effective is 'full and open competition' in ensuring competitive pricing for engineering services?

Full and open competition is generally considered the most effective method for ensuring competitive pricing for government contracts, including engineering services. It allows any responsible business to submit a proposal, thereby maximizing the pool of potential offerors. This increased competition typically drives down prices as contractors vie for the award. However, the effectiveness is contingent on the number of bidders and the complexity of the requirement. If the requirement is highly specialized, the number of capable bidders might be limited, even under full and open competition. In this specific case, with only two bids received, the competitive pressure might have been less intense than if there had been, for example, five or more bidders. Nonetheless, it remains the preferred method for achieving best value and fair pricing.

What are the historical spending patterns for engineering services by the Department of the Army?

The Department of the Army consistently allocates substantial funding towards engineering services to support its vast infrastructure, weapon systems, and operational readiness. Historical spending patterns reveal a continuous demand for a wide range of services, including design, construction oversight, environmental engineering, systems engineering, and technical support. Spending levels can fluctuate based on geopolitical events, modernization priorities, and budget allocations. The Army often utilizes both large, multi-year contracts for major projects and smaller, task-order contracts for specific needs. Analyzing historical data from sources like the Federal Procurement Data System (FPDS) would show trends in spending by service type, contractor, and fiscal year, highlighting the Army's ongoing reliance on external engineering expertise.

What are the implications of the 'NV' status for this contract?

The 'NV' status likely indicates that a significant portion of the contract's performance or the contractor's operational base related to this award is located in Nevada. This could mean that the engineering services are being performed at a specific military base, facility, or project site within Nevada. For the local economy in Nevada, this translates to potential job creation, increased business for local suppliers if Raytheon utilizes them, and a general economic stimulus. From a federal perspective, it signifies a geographic concentration of spending and activity within a particular state, which can be relevant for regional economic impact assessments and resource allocation planning.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 2603 CHALLENGER CT STE150, ORLANDO, FL, 32826

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $23,997,271

Exercised Options: $23,997,271

Current Obligation: $23,978,436

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W900KK07D0001

IDV Type: IDC

Timeline