Raytheon awarded $137.8M contract for B-2 stealth aircraft systems engineering services

Contract Overview

Contract Amount: $32,783,694 ($32.8M)

Contractor: Raytheon Training LLC

Awarding Agency: Department of Defense

Start Date: 2003-03-10

End Date: 2009-04-30

Contract Duration: 2,243 days

Daily Burn Rate: $14.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200306!000053!5700!GU86 !ASC/YWK !F3365798D0005 !A!N! !N!0022 !20030310!20040531!137887410!137887410!001339159!N!RAYTHEON COMPANY !265 INDUSTRIAL PARK DRIVE !KIRKWOOD !NY!13795!39826!007!36!KIRKWOOD !BROOME !NEW YORK !+000006599443!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A1C!OTHER AIRCRAFT EQUIPMENT !3ABK!B-2 STEALTH !336413!E! !5!B!S! ! ! !99990909!B! ! !N!Z!A!U!J!2!002!B! !Z!Y!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: ARLINGTON, TARRANT County, TEXAS, 76011

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $32.8 million to RAYTHEON TRAINING LLC for work described as: 200306!000053!5700!GU86 !ASC/YWK !F3365798D0005 !A!N! !N!0022 !20030310!20040531!137887410!137887410!001339159!N!RAYTHEON COMPANY !265 INDUSTRIAL PARK DRIVE !KIRKWOOD !NY!13795!39826!007!36!KIRKWOOD !BROOM… Key points: 1. Contract value of $137.8 million for systems engineering services. 2. Awarded to Raytheon Training LLC, a significant defense contractor. 3. Contract duration of over 6 years, indicating long-term support needs. 4. Services are critical for the B-2 stealth bomber program. 5. Procurement method was full and open competition. 6. Contract type is Cost Plus Fixed Fee, which can carry higher risk. 7. Geographic location of contractor is in New York, but performance may be elsewhere. 8. The contract falls under 'Other Aircraft Equipment' and 'Systems Engineering Services'.

Value Assessment

Rating: fair

The contract value of $137.8 million for systems engineering services over more than six years appears to be within a reasonable range for a major defense program like the B-2 bomber. However, without specific benchmarks for similar systems engineering contracts on comparable aircraft platforms, a precise value-for-money assessment is challenging. The Cost Plus Fixed Fee (CPFF) contract type suggests that costs could fluctuate, and the final price might exceed initial estimates, warranting close monitoring of expenditures to ensure efficiency and prevent cost overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The fact that it was competed suggests a healthy level of market interest and potential for competitive pricing. The number of bidders is not specified in the provided data, but the competitive nature of the award is a positive sign for price discovery and ensuring the government receives the best value.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and innovative solutions, reducing the likelihood of inflated costs.

Public Impact

The primary beneficiaries are the U.S. Air Force and the B-2 stealth bomber program, ensuring its continued operational readiness and effectiveness. Services delivered include critical systems engineering support, vital for maintaining the complex avionics and operational capabilities of the B-2. The geographic impact is primarily within the defense sector, supporting national security objectives. Workforce implications include employment for specialized engineers and technical personnel at Raytheon and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not managed diligently.
Long contract duration (over 6 years) requires sustained oversight to ensure performance and value.
Specific details on performance metrics and deliverables are not provided, making it hard to gauge effectiveness.
Potential for scope creep in systems engineering services if not clearly defined and managed.

Positive Signals

Awarded through full and open competition, suggesting a competitive bidding process.
Contractor, Raytheon, is a major defense entity with extensive experience in aerospace and defense systems.
Services are critical for a high-value national security asset (B-2 bomber).
Contract value appears reasonable for the scope of services and duration, pending detailed benchmarking.

Sector Analysis

The aerospace and defense sector is characterized by high-value, complex systems requiring specialized engineering expertise. This contract for systems engineering services for the B-2 bomber fits squarely within this domain. The market for such specialized services is typically dominated by a few large, experienced contractors like Raytheon. Spending benchmarks for similar systems engineering support on advanced aircraft platforms are often in the tens to hundreds of millions of dollars, reflecting the intricate nature of the technology and the criticality of maintaining operational readiness for strategic assets.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. As a large prime contract awarded to a major defense corporation, the primary impact on small businesses would likely be through subcontracting opportunities. It is crucial for the prime contractor to have a robust subcontracting plan that includes meaningful participation from small businesses to foster a diverse and competitive industrial base.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of the Air Force's contracting and program management offices. Given the Cost Plus Fixed Fee structure, rigorous financial oversight and performance monitoring are essential to ensure that costs are reasonable and that the contractor is meeting all contractual obligations. Inspector General investigations could be initiated if any irregularities or fraud are suspected. Transparency would be enhanced through regular reporting requirements from the contractor.

Related Government Programs

B-2 Bomber Sustainment Programs
Aerospace Systems Engineering Contracts
Department of Defense Aircraft Maintenance and Support
Advanced Avionics Systems Development
Strategic Aircraft Modernization

Risk Flags

Cost Plus Fixed Fee contract type carries inherent cost overrun risk.
Long contract duration requires sustained oversight.
Potential for undefined scope in systems engineering services.
Limited public information on specific performance metrics.
Contractor location data appears inconsistent (NY listed for city/state code).

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.8 million to RAYTHEON TRAINING LLC. 200306!000053!5700!GU86 !ASC/YWK !F3365798D0005 !A!N! !N!0022 !20030310!20040531!137887410!137887410!001339159!N!RAYTHEON COMPANY !265 INDUSTRIAL PARK DRIVE !KIRKWOOD !NY!13795!39826!007!36!KIRKWOOD !BROOME !NEW YORK !+000006599443!N!N!000000000000!R414!SYSTEMS ENGINEERING SERVICES !A1C!OTHER AIRCRAFT EQUIPMENT !3ABK!B-2 STEALTH !336413!E! !5!B!S! ! ! !99990909!B

Who is the contractor on this award?

The obligated recipient is RAYTHEON TRAINING LLC.

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 $32.8 million.

What is the period of performance?

Start: 2003-03-10. End: 2009-04-30.

What is Raytheon's track record with the B-2 program and similar complex defense systems?

Raytheon Company (and its subsidiaries like Raytheon Training LLC) has a long-standing and extensive history of providing complex systems, components, and services to various U.S. military platforms, including the B-2 bomber. Their involvement often spans the lifecycle of these aircraft, from development and integration to sustainment and upgrades. They are a prime contractor for numerous critical defense programs, demonstrating a deep understanding of advanced aerospace technologies, stealth capabilities, and the stringent requirements of military operations. Their track record generally indicates a capacity to handle large, technically demanding contracts, though specific performance metrics on past B-2 related contracts would provide a more granular assessment of their effectiveness and reliability in this specific context.

How does the $137.8 million contract value compare to similar systems engineering contracts for advanced aircraft?

Benchmarking the $137.8 million contract value for systems engineering services on the B-2 bomber requires comparison with contracts for similar platforms and services. Major defense aircraft like the F-22, F-35, or strategic bombers often have multi-year sustainment and engineering support contracts that can range from tens to hundreds of millions of dollars. Given the B-2's advanced technology and strategic importance, a contract of this magnitude over a period of more than six years appears to be within the expected range for specialized systems engineering. However, the exact 'value for money' depends heavily on the scope of work, the specific systems being engineered, the level of effort required, and the competitive landscape at the time of award. Without detailed scope-of-work comparisons, it's difficult to definitively state if this represents an exceptionally good or poor value.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for systems engineering?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for systems engineering services revolve around cost control and potential for overruns. In a CPFF structure, the contractor is reimbursed for allowable costs plus a fixed fee, which represents their profit. While the fixed fee incentivizes cost consciousness to some extent, it does not provide the same level of cost-saving incentive as fixed-price contracts. If the contractor's costs exceed projections, the government bears the burden of these increased expenses, as long as they are deemed allowable. For complex systems engineering, where requirements can evolve or unforeseen technical challenges arise, there's a heightened risk that costs could escalate beyond initial estimates. Effective oversight, detailed cost tracking, and robust negotiation of the fixed fee are crucial to mitigate these risks.

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

Full and open competition is generally the most effective method for ensuring competitive pricing for specialized defense engineering services, as it allows any responsible source to submit an offer. This broadens the potential bidder pool, increasing the likelihood of receiving multiple competitive proposals. When several qualified companies vie for a contract, they are incentivized to offer their best pricing and most innovative solutions to win the award. This competitive pressure helps drive down costs and ensures the government is likely to secure a fair market price. However, the effectiveness can be limited if the market for highly specialized services is inherently constrained, meaning only a few companies possess the necessary expertise, potentially leading to less intense price competition than in broader markets.

What are the implications of this contract on the long-term sustainment and modernization of the B-2 bomber fleet?

This contract for systems engineering services is crucial for the long-term sustainment and potential modernization of the B-2 bomber fleet. Systems engineering encompasses the integration, maintenance, and improvement of complex aircraft systems. By ensuring continuous expert support, the contract helps maintain the B-2's operational readiness, addresses obsolescence issues, and facilitates the implementation of necessary upgrades or modifications. The services provided are fundamental to keeping the B-2's advanced capabilities effective against evolving threats and ensuring its viability as a strategic asset for the foreseeable future. Without such dedicated engineering support, the complex systems of the B-2 would degrade, impacting its mission effectiveness and potentially leading to higher costs for reactive repairs.

How does the geographic location of the contractor (New York) impact contract performance and oversight for a defense asset likely based elsewhere?

The geographic location of the contractor, Raytheon Training LLC, being listed in New York (based on the address provided, though the state code 'NY' is unusual for a defense contractor often based in MA or TX, and the data shows 'NY' for the city/state code, which is likely an error and should be Kirkwood, NY) does not necessarily dictate where the actual performance occurs. Defense contracts, especially for major platforms like the B-2, often involve work performed at various government facilities, contractor sites across the country, or even overseas. For systems engineering services, much of the work might be conceptual, analytical, or involve remote collaboration. Oversight would be managed by the contracting officer and technical representatives, who may be located near the primary performance site or the contractor's headquarters. While physical proximity can sometimes aid oversight, modern communication tools and established protocols allow for effective management regardless of the contractor's listed address, provided performance requirements are clearly defined and monitored.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 6341 CAMPUS CIRCLE DR E, IRVING, TX, 90

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: F3365798D0005

IDV Type: IDC

Timeline