Raytheon's $57.5M contract for engineering services saw significant cost growth over its extended period

Contract Overview

Contract Amount: $57,555,385 ($57.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2004-11-18

End Date: 2011-09-07

Contract Duration: 2,484 days

Daily Burn Rate: $23.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200502!026520!1700!N61339!NAVAL AIR WARFARE CENTER !N6133900D0001 !A!N! !Y!0035 ! !20041118!20051031!134733377!112820840!001339159!N!RAYTHEON TECHNICAL SERVICES CO!980 KELLY JOHNSON DRIVE !LAS VEGAS !NV!89119!58072!037!06!POMONA !LOS ANGELES !CALIFORNIA!+000002414194!N!N!000000000000!J069!MAINT & REPAIR OF EQ/TRAINING AIDS & DEVICES !A1C!OTHER AIRCRAFT EQUIPMENT !000 !* !541330!E! !5!B!S! ! !D!20051031!B! ! !A! !A!U!J!2!004!B! !Z!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! ! !2100!W32G11!0001! !

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32826

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $57.6 million to RAYTHEON COMPANY for work described as: 200502!026520!1700!N61339!NAVAL AIR WARFARE CENTER !N6133900D0001 !A!N! !Y!0035 ! !20041118!20051031!134733377!112820840!001339159!N!RAYTHEON TECHNICAL SERVICES CO!980 KELLY JOHNSON DRIVE !LAS VEGAS !NV!89119!58072!037!06!POMONA !LOS … Key points: 1. The contract experienced substantial cost increases from its initial award value. 2. Performance period was extended significantly beyond the original end date. 3. The contractor, Raytheon Technical Services Co., has a large presence in defense contracting. 4. The contract was awarded under full and open competition. 5. The primary service category is engineering services, indicating complex technical requirements. 6. The contract's duration and cost growth warrant scrutiny for value for money.

Value Assessment

Rating: questionable

The initial award value was approximately $13.47 million, but the final cost reached over $57.55 million, representing a significant increase of over 300%. This growth occurred over an extended performance period, suggesting potential scope creep, underestimation of initial costs, or unforeseen complexities. Benchmarking this against similar engineering services contracts is difficult without more granular data on the specific services rendered and the original scope.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to compete. The data shows 4 bids were received. This level of competition is generally positive for price discovery and ensuring the government receives competitive pricing.

Taxpayer Impact: The full and open competition suggests taxpayers benefited from a competitive bidding process, likely leading to a more favorable price than a sole-source award.

Public Impact

The primary beneficiary is the Department of Defense, specifically naval air warfare, receiving engineering services. Services likely include design, development, testing, and maintenance of training aids and devices. The geographic impact is centered around the contractor's location in Las Vegas, NV, and potentially the Naval Air Warfare Center's operational areas. The contract supports a workforce of engineers and technical specialists employed by Raytheon.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Significant cost growth from initial award to final cost.
Extended performance period beyond original end date.
Lack of detailed breakdown for cost increases over time.

Positive Signals

Awarded under full and open competition.
Multiple bids received, indicating a competitive process.
Contractor is a major defense industry player with established capabilities.

Sector Analysis

This contract falls within the Engineering Services sector, a broad category encompassing a wide range of technical and scientific support. The defense industry heavily relies on such services for research, development, and sustainment of complex systems. Comparable spending benchmarks would depend on the specific sub-discipline of engineering and the scale of the project, but large-scale engineering support contracts for defense can run into tens or hundreds of millions of dollars.

Small Business Impact

The data does not indicate any specific small business set-aside provisions for this contract. Given the prime contractor is Raytheon, a large corporation, it is possible that subcontracting opportunities for small businesses may exist, but this is not explicitly detailed in the provided information.

Oversight & Accountability

Oversight would typically be managed by the Defense Contract Management Agency (DCMA), which is listed as the supporting agency. Accountability measures would involve contract performance reviews, milestone tracking, and financial reporting by the contractor. Transparency is facilitated through contract databases like FPDS, though detailed justifications for cost growth may not always be publicly available.

Related Government Programs

Naval Air Warfare Center Contracts
Defense Engineering Services
Training Aids and Devices Procurement
Raytheon Defense Contracts

Risk Flags

Significant cost growth
Extended performance period

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $57.6 million to RAYTHEON COMPANY. 200502!026520!1700!N61339!NAVAL AIR WARFARE CENTER !N6133900D0001 !A!N! !Y!0035 ! !20041118!20051031!134733377!112820840!001339159!N!RAYTHEON TECHNICAL SERVICES CO!980 KELLY JOHNSON DRIVE !LAS VEGAS !NV!89119!58072!037!06!POMONA !LOS ANGELES !CALIFORNIA!+000002414194!N!N!000000000000!J069!MAINT & REPAIR OF EQ/TRAINING AIDS & DEVICES !A1C!OTHER AIRCRAFT EQUIPMENT !000 !* !541330!E! !5!B!S! ! !D!200

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $57.6 million.

What is the period of performance?

Start: 2004-11-18. End: 2011-09-07.

What specific factors contributed to the significant cost growth from the initial award value to the final cost?

The provided data indicates a substantial increase from an initial award value of approximately $13.47 million to a final cost exceeding $57.55 million. Without access to detailed contract modifications, delivery reports, or audit findings, the precise factors driving this growth are not publicly discernible. Potential reasons could include unforeseen technical challenges, changes in scope or requirements initiated by the government, extended contract performance periods leading to cumulative cost increases, inflation adjustments, or contractor-initiated change requests. A thorough review of contract modification history and justifications would be necessary to pinpoint the exact causes.

How does the final cost of this contract compare to similar engineering services contracts for training aids and devices within the Department of Defense?

Directly comparing the final cost of $57.55 million for this specific contract to similar ones is challenging without a standardized benchmark for 'engineering services for training aids and devices.' The complexity, duration, and specific technologies involved can vary widely. However, given the significant cost growth observed, it suggests that either the initial estimate was conservative, or the project scope and duration expanded considerably. To make a meaningful comparison, one would need to analyze contracts with similar North American Industry Classification System (NAICS) codes (like 541330 for Engineering Services), similar contract types (FIRM FIXED PRICE in this case, though modifications might have altered this), and comparable performance periods and technical requirements within the defense sector.

What were the key performance indicators (KPIs) for this contract, and how did Raytheon Technical Services Co. perform against them?

The provided data does not include specific Key Performance Indicators (KPIs) or performance ratings for this contract. Typically, government contracts outline specific metrics related to technical performance, schedule adherence, cost control, and quality. Performance assessments are usually documented in Contractor Performance Assessment Reporting System (CPARS) reports. Without access to CPARS data or contract-specific performance clauses, it is impossible to definitively state how Raytheon Technical Services Co. performed against its contractual obligations beyond the fact that the contract was completed and paid out.

What is the historical spending pattern for this specific type of service (MAINT & REPAIR OF EQ/TRAINING AIDS & DEVICES) by the Naval Air Warfare Center?

The provided data snippet focuses on a single contract awarded in 2004. To understand the historical spending pattern for 'MAINT & REPAIR OF EQ/TRAINING AIDS & DEVICES' by the Naval Air Warfare Center (NAWC), a broader analysis of historical contract awards within this category would be required. This would involve querying federal procurement databases (like FPDS or USASpending.gov) for contracts awarded by NAWC or related Naval entities under relevant Product Service Codes (PSCs) or NAICS codes over several fiscal years. Such an analysis would reveal trends in spending volume, average contract values, common contractors, and contract types used for these services.

Were there any identified risks or issues during the contract's performance, and how were they mitigated?

The provided data does not explicitly list any specific risks or issues encountered during the performance of this contract, nor does it detail mitigation strategies. However, the significant cost growth and extended performance period inherently suggest that risks were present, whether they were related to technical complexity, schedule delays, resource availability, or unforeseen external factors. Government contracts typically include clauses for risk management and require contractors to report and address issues. A comprehensive review of contract modifications, correspondence, and performance reports would be needed to identify specific risks and their mitigation.

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

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 12792 RESEARCH PKWY, ORLANDO, FL, 90

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6133900D0001

IDV Type: IDC

Timeline