Raytheon Company awarded $31.3M for Tactical Engagement Systems Exercise Lot 2 by the Department of the Army

Contract Overview

Contract Amount: $31,296,411 ($31.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2010-05-01

End Date: 2012-04-20

Contract Duration: 720 days

Daily Burn Rate: $43.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: TACTICAL ENGAGEMENT SYSTEMS (TES) EXERCISE LOT 2

Place of Performance

Location: FAIRDALE, JEFFERSON County, KENTUCKY, 40118

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $31.3 million to RAYTHEON COMPANY for work described as: TACTICAL ENGAGEMENT SYSTEMS (TES) EXERCISE LOT 2 Key points: 1. Contract awarded on a firm-fixed-price basis, indicating clear cost expectations. 2. The contract was competed under full and open competition, suggesting a competitive bidding process. 3. Duration of 720 days (2 years) provides a moderate timeframe for project execution. 4. The contract was awarded as a delivery order, implying it's part of a larger framework agreement. 5. The North American Industry Classification System (NAICS) code 541330 points to engineering services. 6. The contract was awarded to a single vendor, Raytheon Company. 7. The contract was not set aside for small businesses.

Value Assessment

Rating: fair

The contract's value of $31.3 million over two years for tactical engagement systems exercise support appears within a reasonable range for specialized engineering services. Benchmarking against similar large-scale defense contracts for system development and testing is difficult without more specific details on the scope of work. However, the firm-fixed-price contract type suggests that the government has a defined cost expectation, which can be a positive indicator of value if the scope is well-managed. The number of bids received (2) is a factor in assessing competitive pricing, but further analysis would be needed to determine if this led to optimal value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The data shows two bids were received. While two bidders suggest some level of competition, it is on the lower end for a contract of this magnitude. A higher number of bidders typically leads to more robust price discovery and potentially lower costs for the government. The limited number of bids could suggest a specialized market or high barriers to entry for potential competitors.

Taxpayer Impact: The full and open competition, despite receiving only two bids, aims to ensure taxpayer funds are used efficiently by encouraging competitive pricing. However, the limited number of bidders may have constrained the full benefit of competition, potentially leading to a higher price than if more firms had participated.

Public Impact

The Department of the Army benefits from specialized engineering services for tactical engagement systems exercises. This contract supports the development, testing, or maintenance of critical defense capabilities. The services are likely to be performed in Kentucky, the stated place of performance. The contract supports the defense industrial base, potentially involving skilled engineers and technicians.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) may not have secured the best possible price for taxpayers.
The specific nature of 'Tactical Engagement Systems Exercise Lot 2' is not detailed, making it hard to assess the full scope and potential risks.
Long-term reliance on a single contractor for specific system support could pose future risks if not managed carefully.

Positive Signals

Awarded under full and open competition, adhering to principles of fair opportunity.
Firm-fixed-price contract type provides cost certainty for the government.
The contract is for a defined period, allowing for reassessment of needs upon completion.

Sector Analysis

The defense sector, particularly within engineering services, is characterized by high specialization and significant government investment. Contracts like this, supporting tactical engagement systems, are crucial for maintaining military readiness and technological superiority. The market often involves a few large, established prime contractors like Raytheon, who possess the necessary expertise and security clearances. Spending in this sub-sector can fluctuate based on geopolitical events and modernization priorities. Comparable spending benchmarks are difficult to establish without knowing the precise technical requirements, but multi-million dollar contracts for specialized engineering support are common within the Department of Defense.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. As a large prime contract awarded to Raytheon Company, it is possible that small businesses could be involved as subcontractors, depending on Raytheon's procurement practices and the specific needs of the project. However, without explicit set-aside provisions or reporting on subcontracting plans, the direct impact on the small business ecosystem is not quantifiable from this data alone.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. As a delivery order under a potential larger contract vehicle, oversight might be integrated into existing program reviews. Transparency is generally facilitated through contract award databases like FPDS. Specific accountability measures would be defined in the contract's terms and conditions, including performance standards and payment clauses. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Tactical Training and Simulation Systems
Defense Engineering Services
Military Exercise Support Contracts
Raytheon Company Defense Contracts

Risk Flags

Limited competition
Specialized service area

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.3 million to RAYTHEON COMPANY. TACTICAL ENGAGEMENT SYSTEMS (TES) EXERCISE LOT 2

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 $31.3 million.

What is the period of performance?

Start: 2010-05-01. End: 2012-04-20.

What is the specific nature of the 'Tactical Engagement Systems (TES) Exercise Lot 2' services provided under this contract?

The provided data does not specify the exact nature of the services for 'Tactical Engagement Systems (TES) Exercise Lot 2'. However, the NAICS code 541330 (Engineering Services) and the contract title suggest that the work likely involves engineering expertise related to the development, integration, testing, or support of systems used in military exercises. This could encompass a range of activities such as simulation development, hardware/software engineering, technical support during exercises, or analysis of exercise outcomes. Without further details from the contract's statement of work, the precise deliverables remain undefined.

How does the awarded amount of $31.3 million compare to similar contracts for tactical engagement systems or defense engineering services?

Direct comparison of the $31.3 million award for 'Tactical Engagement Systems Exercise Lot 2' to similar contracts is challenging without more granular data on the scope of work, duration, and specific services rendered. However, for specialized engineering and support services within the defense sector, this amount over a two-year period (720 days) appears to be within a moderate range. Larger, more complex system development or sustainment contracts can easily reach hundreds of millions or billions of dollars. Conversely, smaller, more focused support tasks might be in the single-digit millions. The firm-fixed-price nature suggests a well-defined scope, which aids in value assessment once the scope's complexity is understood.

What are the key performance indicators (KPIs) or metrics used to evaluate Raytheon Company's performance on this contract?

The provided data does not explicitly list the Key Performance Indicators (KPIs) or metrics for this specific contract. Typically, for engineering services contracts, performance is evaluated based on factors such as adherence to schedule, quality of deliverables, technical performance, cost control (especially relevant in fixed-price contracts), and responsiveness to government requests. The contract's terms and conditions would detail the specific requirements and standards Raytheon must meet. Performance evaluations are usually documented through contract performance reports and feedback mechanisms within the awarding agency.

What is the historical spending trend for Tactical Engagement Systems (TES) or similar services by the Department of the Army?

The provided data is for a single contract award and does not offer historical spending trends. To analyze historical spending for Tactical Engagement Systems (TES) or similar services by the Department of the Army, one would need to query comprehensive federal procurement databases (like FPDS or USASpending.gov) for contracts awarded over multiple fiscal years under relevant product/service codes and keywords. This would reveal patterns in spending levels, major contractors, and the evolution of requirements within this domain, indicating whether spending is increasing, decreasing, or remaining stable.

What are the potential risks associated with awarding this contract to Raytheon Company, considering their track record?

Raytheon Company is a major defense contractor with extensive experience, which generally reduces performance risk. However, potential risks associated with any large contractor include over-reliance, potential for cost overruns if scope changes, and the possibility of performance issues on highly complex projects. Specific risks for this contract would depend on the detailed statement of work and Raytheon's past performance on similar TES contracts. Without access to past performance evaluations or specific contract disputes involving Raytheon on TES, a definitive risk assessment based on track record is limited. The firm-fixed-price nature mitigates cost overrun risk for the government, shifting it to the contractor.

How does the competition level (2 bidders) impact the overall value for money and taxpayer cost for this contract?

A competition level of only two bidders for a contract valued at $31.3 million suggests a potentially limited competitive environment. While full and open competition was utilized, allowing any qualified vendor to bid, the low number of actual bids received may indicate a specialized market, high barriers to entry, or perhaps a lack of market research to encourage broader participation. With fewer bidders, the government may not achieve the full benefits of price discovery and innovation that a more robust competition (e.g., 4+ bidders) could provide. This could translate to a higher price for taxpayers than might have been achieved in a more crowded field, although the firm-fixed-price structure does provide cost certainty once the price is set.

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: FIRM FIXED PRICE (J)

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: $31,296,411

Exercised Options: $31,296,411

Current Obligation: $31,296,411

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W900KK07D0001

IDV Type: IDC

Timeline