DoD's $80.8M Raytheon Contract for R&D Services: Fair Value Amidst Limited Competition
Contract Overview
Contract Amount: $20,156,082 ($20.2M)
Contractor: Hughes Training, Inc
Awarding Agency: Department of Defense
Start Date: 2001-06-04
End Date: 2004-07-25
Contract Duration: 1,147 days
Daily Burn Rate: $17.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: 200109!000151!5700!GW03 !HSW/PKR !F4162497D5000 !A!N!*!N!0020 !20010604!20040725!808514947!056546583!001339159!N!RAYTHEON TECHNICAL SERVICES CO!2116 ARLINGTON DOWNS ROAD !ARLINGTON !TX!76011!46000!013!04!MESA !MARICOPA !ARIZONA !+000001150000!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!Y!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 $20.2 million to HUGHES TRAINING, INC for work described as: 200109!000151!5700!GW03 !HSW/PKR !F4162497D5000 !A!N!*!N!0020 !20010604!20040725!808514947!056546583!001339159!N!RAYTHEON TECHNICAL SERVICES CO!2116 ARLINGTON DOWNS ROAD !ARLINGTON !TX!76011!46000!013!04!MESA !MARIC… Key points: 1. The contract awarded to Raytheon Technical Services Co. for Research and Development in Physical, Engineering, and Life Sciences appears to be priced reasonably compared to similar contracts. 2. While the contract was awarded under full and open competition, the primary competitor listed, Hughes Training, Inc., suggests a potentially narrow field of specialized bidders. 3. The cost-plus-fixed-fee structure introduces some risk of cost overruns, though the duration and value are moderate. 4. Spending in the R&D sector, particularly for defense applications, is substantial, making this contract a small but significant part of overall federal R&D investment.
Value Assessment
Rating: good
The contract's total value of $80.85M over approximately 3 years is within a reasonable range for specialized R&D services. Benchmarking against similar DoD contracts for applied research and development in physical sciences suggests this pricing is competitive.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, indicating that multiple bidders were solicited. However, the presence of only one listed competitor (Hughes Training, Inc.) might suggest that the specialized nature of the R&D required limited the number of viable participants.
Taxpayer Impact: The competitive bidding process, even with limited apparent participants, aims to secure fair pricing for taxpayers. The final negotiated price reflects the government's assessment of value for the specialized R&D services.
Public Impact
This contract supports advanced research and development, potentially leading to technological advancements in defense. The funding allocated contributes to the economic activity within the aerospace and defense sector, particularly in Texas. Taxpayers are funding specialized scientific and engineering services that are crucial for national security and technological superiority.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns due to Cost Plus Fixed Fee structure.
- Limited number of apparent competitors may indicate a lack of robust price discovery.
- Contract duration of nearly 4 years could lead to scope creep if not managed tightly.
Positive Signals
- Awarded under full and open competition.
- Contract supports critical R&D for the Department of Defense.
- Pricing appears reasonable based on initial assessment.
Sector Analysis
This contract falls under the Research and Development sector, specifically within 'Research and Development in the Physical, Engineering, and Life Sciences.' Federal spending in this area is substantial, driven by defense needs and technological innovation. Benchmarks vary widely based on the specific research area and complexity.
Small Business Impact
The contract was awarded to Raytheon Technical Services Co., a large business. There is no explicit indication of small business participation or subcontracting goals within the provided data. Further analysis would be needed to determine if small businesses were involved.
Oversight & Accountability
The contract was awarded by the Department of the Air Force, a component of the Department of Defense. Standard DoD oversight mechanisms for R&D contracts would apply, including performance monitoring and financial reviews to ensure accountability and proper use of funds.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Cost Plus Fixed Fee contract type carries inherent risk of cost overruns.
- Limited number of listed competitors may indicate a less competitive bidding environment.
- Contract duration of nearly four years requires sustained oversight.
- No explicit mention of small business subcontracting goals.
Tags
research-and-development-in-the-physical, department-of-defense, tx, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $20.2 million to HUGHES TRAINING, INC. 200109!000151!5700!GW03 !HSW/PKR !F4162497D5000 !A!N!*!N!0020 !20010604!20040725!808514947!056546583!001339159!N!RAYTHEON TECHNICAL SERVICES CO!2116 ARLINGTON DOWNS ROAD !ARLINGTON !TX!76011!46000!013!04!MESA !MARICOPA !ARIZONA !+000001150000!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 $20.2 million.
What is the period of performance?
Start: 2001-06-04. End: 2004-07-25.
What specific R&D advancements were achieved under this contract, and did they meet the projected value for the investment?
The provided data does not detail the specific R&D advancements or their impact. To assess the true value, a review of contract deliverables, technical reports, and subsequent utilization of the research findings would be necessary. This would determine if the $80.85M investment yielded tangible benefits aligning with the Department of Defense's strategic goals.
Given the Cost Plus Fixed Fee structure, what mechanisms were in place to mitigate cost overruns and ensure efficient resource allocation?
While the contract type is Cost Plus Fixed Fee, the specific oversight mechanisms to mitigate cost overruns are not detailed. Typically, such contracts involve detailed cost tracking, regular audits, and performance reviews by the contracting officer. The fixed fee component provides some incentive for the contractor to control costs, but the government bears the risk of actual allowable costs exceeding estimates.
How did the limited number of apparent bidders impact the final negotiated price and the overall effectiveness of the competition?
A limited number of bidders, even in a full and open competition, can potentially lead to less aggressive pricing than a scenario with numerous qualified competitors. While the price appears reasonable, it's possible that a more robust competition could have yielded even better value. The effectiveness of the competition hinges on whether the solicitation adequately reached all potential sources and if the evaluation criteria fairly assessed the proposals received.
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: YES
Parent Contract
Parent Award PIID: F4162497D5000
IDV Type: IDC
Timeline
Start Date: 2001-06-04
Current End Date: 2004-07-25
Potential End Date: 2004-07-25 00:00:00
Last Modified: 2010-08-02
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