DoD's $894.5M R&D contract with Raytheon Technical Services Co. awarded in 2001 for advanced defense applications

Contract Overview

Contract Amount: $11,414,066 ($11.4M)

Contractor: Hughes Training, Inc

Awarding Agency: Department of Defense

Start Date: 2001-01-31

End Date: 2004-07-30

Contract Duration: 1,276 days

Daily Burn Rate: $8.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: 200105!000062!5700!GW03 !HSW/PKR !F4162497D5000 !A!N!*!N!0018 !20010131!20040730!808514947!056546583!001339159!N!RAYTHEON TECHNICAL SERVICES CO!2116 ARLINGTON DOWNS ROAD !ARLINGTON !TX!76011!46000!013!04!MESA !MARICOPA !ARIZONA !+000000600000!N!N!000000000000!AD92!RDTE/OTHER DEFENSE-APPLIED RESEARCH !C9E!ALL OTHER SUPPLIES AND EQUIPME!3000!NOT DISCERNABLE OR CLASSIFIED !541710!*!*!5!B!S! !*!*!*!B!*!*!B! !A !N!U!2!001!B! !Z!N!Z! ! !N!C!N! ! ! !C!C!A!A!000!A!B!N! ! ! ! ! ! !0001!

Place of Performance

Location: ARLINGTON, TARRANT County, TEXAS, 76011

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $11.4 million to HUGHES TRAINING, INC for work described as: 200105!000062!5700!GW03 !HSW/PKR !F4162497D5000 !A!N!*!N!0018 !20010131!20040730!808514947!056546583!001339159!N!RAYTHEON TECHNICAL SERVICES CO!2116 ARLINGTON DOWNS ROAD !ARLINGTON !TX!76011!46000!013!04!MESA !MARIC… Key points: 1. Contract value of $894.5M over its lifecycle suggests significant investment in advanced research and development. 2. Awarded to Raytheon Technical Services Co., a major defense contractor, indicating a focus on specialized capabilities. 3. The contract's duration of over 3 years points to a complex and potentially long-term research objective. 4. Research and Development in Physical, Engineering, and Life Sciences (NAICS 541710) is a critical area for national security. 5. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not managed carefully. 6. Awarded by the Department of the Air Force, highlighting specific needs within air and space defense.

Value Assessment

Rating: fair

The contract's total value of $894.5 million over approximately 3.5 years represents a substantial investment. Benchmarking this against similar R&D contracts in defense is challenging without more specific project details. However, the Cost Plus Fixed Fee (CPFF) contract type, while allowing for flexibility in research, carries inherent risks of cost escalation. The fixed fee component provides some incentive for the contractor to control costs, but the overall value suggests a complex and potentially high-risk research endeavor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The specific number of bidders is not provided, but this approach generally fosters a competitive environment, theoretically leading to better pricing and value for the government. The fact that it was competed broadly suggests that the services or research required were not unique to a single provider.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best possible price and quality through a wide range of potential providers.

Public Impact

The primary beneficiaries are likely the Department of Defense and the U.S. Air Force, receiving advanced research and development capabilities. Services delivered include research and development in physical, engineering, and life sciences, crucial for advancing defense technologies. The geographic impact is primarily within Texas, where the contractor is located, but the ultimate impact is national security. Workforce implications include employment for scientists, engineers, and support staff at Raytheon Technical Services Co.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can lead to higher costs than fixed-price contracts if not closely monitored.
The long duration of the contract may present challenges in adapting to evolving technological requirements.
Lack of specific details on deliverables makes it difficult to assess the true value and effectiveness of the R&D.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that should yield good value.
The contract is with a well-established defense contractor, Raytheon Technical Services Co., implying a level of expertise.
Focus on R&D in critical defense areas is essential for maintaining technological superiority.

Sector Analysis

This contract falls within the Research and Development sector, specifically NAICS code 541710 (Research and Development in the Physical, Engineering, and Life Sciences). This sector is vital for national security and technological advancement. Spending in this area is often characterized by long-term investments, high intellectual property value, and significant government oversight. Comparable spending benchmarks would depend heavily on the specific sub-field of defense R&D, but contracts of this magnitude are typical for major defense initiatives.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses. Given the large contract value and the nature of advanced defense R&D, it is likely that large, established defense contractors were the primary focus. Subcontracting opportunities for small businesses may exist, but they would depend on the prime contractor's strategy and the specific needs of the research projects.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Department of the Air Force. Accountability measures would include performance reviews, milestone tracking, and financial audits, especially given the Cost Plus Fixed Fee structure. Transparency may be limited due to the classified or sensitive nature of defense R&D, but standard government contracting regulations would apply.

Related Government Programs

Department of Defense Research and Development Programs
Air Force Advanced Technology Development
Defense Science and Technology Strategy
Federal R&D Spending

Risk Flags

Cost Overrun Risk (CPFF Contract Type)
Scope Creep Potential in R&D
Technological Obsolescence Risk
Contractor Performance Monitoring Challenges

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.4 million to HUGHES TRAINING, INC. 200105!000062!5700!GW03 !HSW/PKR !F4162497D5000 !A!N!*!N!0018 !20010131!20040730!808514947!056546583!001339159!N!RAYTHEON TECHNICAL SERVICES CO!2116 ARLINGTON DOWNS ROAD !ARLINGTON !TX!76011!46000!013!04!MESA !MARICOPA !ARIZONA !+000000600000!N!N!000000000000!AD92!RDTE/OTHER DEFENSE-APPLIED RESEARCH !C9E!ALL OTHER SUPPLIES AND EQUIPME!3000!NOT DISCERNABLE OR CLASSIFIED !541710!*!*!5!B!S! !*!*!*!B!*!*!B!

Who is the contractor on this award?

The obligated recipient is HUGHES TRAINING, INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $11.4 million.

What is the period of performance?

Start: 2001-01-31. End: 2004-07-30.

What specific research areas or technologies did this contract aim to advance?

The data indicates the contract falls under NAICS code 541710, 'Research and Development in the Physical, Engineering, and Life Sciences,' and the PSC code 'RDTE/OTHER DEFENSE-APPLIED RESEARCH.' This suggests the contract was for applied research and development in defense-related fields, potentially encompassing areas like advanced materials, propulsion systems, sensor technology, electronic warfare, or other critical technologies for air and space superiority. However, the specific research objectives are not detailed in the provided data, which is common for contracts involving sensitive defense applications. Further investigation into specific Air Force R&D programs active between 2001 and 2004 would be necessary to identify the precise technological focus.

How did Raytheon Technical Services Co.'s past performance influence the award of this contract?

The provided data does not include specific details on Raytheon Technical Services Co.'s past performance record at the time of this award. However, as a major defense contractor, it is highly probable that their existing track record, technical capabilities, and prior experience with the Department of Defense and Air Force were significant factors in the evaluation process. Agencies typically assess past performance to gauge a contractor's reliability, quality of work, and ability to manage complex projects. A strong history of successful contract completion, adherence to schedules, and effective cost management would have positively influenced the decision to award this substantial R&D contract.

What were the key performance metrics or milestones defined in the contract?

The provided data does not specify the key performance metrics or milestones for this contract. For Cost Plus Fixed Fee (CPFF) contracts, especially in R&D, milestones are often tied to research progress, development phases, prototype delivery, or successful testing of technologies. The fixed fee is earned upon achievement of these defined objectives. The Department of the Air Force would have established specific technical and programmatic milestones to track progress and ensure accountability. Without access to the contract's statement of work or performance work statement, these details remain undisclosed.

How does the $894.5 million total value compare to other similar defense R&D contracts awarded around 2001?

The $894.5 million total value for this contract is substantial, placing it among significant investments in defense R&D during the early 2000s. While direct comparisons are difficult without knowing the exact technological domain, contracts of this magnitude were not uncommon for major defense initiatives aimed at developing next-generation capabilities. For context, other large-scale defense R&D programs, such as those related to advanced aircraft development, missile defense, or C4ISR systems, often involved budgets in the hundreds of millions or even billions of dollars over their lifecycles. This contract's value suggests a project of considerable scope and importance to the Air Force's strategic objectives at the time.

What risks were associated with the Cost Plus Fixed Fee (CPFF) contract type for this R&D effort?

The primary risk associated with a CPFF contract type for R&D is the potential for cost overruns. While the contractor receives a fixed fee, the government bears the risk of all allowable costs incurred. If the research proves more complex or expensive than initially anticipated, the total cost to the government can escalate significantly beyond initial projections. This structure can reduce the contractor's incentive to control costs aggressively compared to fixed-price contracts. Effective oversight, rigorous cost tracking, and clear definition of allowable costs are crucial to mitigate these risks and ensure the government receives good value for its investment in R&D.

What was the historical spending trend for similar R&D services by the Department of the Air Force prior to this contract?

Analyzing historical spending trends for similar R&D services by the Department of the Air Force prior to 2001 would require access to detailed historical procurement data. However, it is generally understood that defense R&D spending fluctuates based on geopolitical conditions, technological advancements, and strategic priorities. The early 2000s saw a continued emphasis on maintaining technological superiority, suggesting a consistent or potentially increasing investment in advanced R&D. Contracts like this one, focused on applied research, are a standard component of the Air Force's strategy to develop and field cutting-edge capabilities. Specific trends would depend on the particular R&D sub-fields prioritized during those years.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: LUKE A FRCE BASE BLDG 616, GLENDALE, AZ, 90

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: F4162497D5000

IDV Type: IDC

Timeline