DoD Awards Raytheon $72.1M for F/A-18 E/F Aircraft Parts, Lacking Competition
Contract Overview
Contract Amount: $72,149,450 ($72.1M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2007-12-28
End Date: 2011-03-31
Contract Duration: 1,189 days
Daily Burn Rate: $60.7K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: FY 08 LAU-115D/A AND LAU-116B/A FOR RAAF F/A-18 E/F
Place of Performance
Location: INDIANAPOLIS, MARION County, INDIANA, 46201
State: Indiana Government Spending
Plain-Language Summary
Department of Defense obligated $72.1 million to RAYTHEON COMPANY for work described as: FY 08 LAU-115D/A AND LAU-116B/A FOR RAAF F/A-18 E/F Key points: 1. Significant award to Raytheon for critical aircraft components. 2. Sole-source award raises concerns about price discovery and competition. 3. Long contract duration (nearly 4 years) may impact cost-effectiveness. 4. Awarded under Other Aircraft Parts and Auxiliary Equipment Manufacturing sector.
Value Assessment
Rating: questionable
The award amount of $72.1M for 1189 days suggests a potential for overpayment due to the lack of competitive bidding. Without market comparison, it's difficult to ascertain if the firm fixed price is optimal.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Raytheon Company. This limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The absence of competition likely resulted in a higher price than could have been achieved through a competitive process, impacting taxpayer funds.
Public Impact
Taxpayers may have paid a premium for aircraft parts due to the sole-source nature of the contract. The long performance period could mean the government is locked into potentially suboptimal pricing. Lack of transparency in the procurement process hinders public understanding of defense spending efficiency.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Long contract duration
Positive Signals
- Firm fixed price contract type
- Awarded to established contractor
Sector Analysis
This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector. Spending in this area is crucial for maintaining military readiness, but competitive procurement is vital for cost efficiency.
Small Business Impact
The contract was awarded to Raytheon Company, a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award.
Oversight & Accountability
The sole-source nature of this award warrants further scrutiny by oversight bodies to ensure the price paid was fair and reasonable, and to understand why competition was not pursued.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits price competition.
- Potential for inflated costs due to lack of competitive bidding.
- Long contract duration may not reflect current market conditions.
- Lack of transparency regarding procurement justification.
- No indication of small business participation.
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, in, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $72.1 million to RAYTHEON COMPANY. FY 08 LAU-115D/A AND LAU-116B/A FOR RAAF F/A-18 E/F
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 Navy).
What is the total obligated amount?
The obligated amount is $72.1 million.
What is the period of performance?
Start: 2007-12-28. End: 2011-03-31.
What was the justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?
The provided data indicates the contract was 'NOT COMPETED'. A thorough review would be needed to understand the specific justification, such as a critical need, lack of qualified sources, or urgency. Without this information, it's impossible to assess if alternative competitive strategies were viable or if the sole-source decision was truly necessary and cost-effective.
How does the awarded price compare to market benchmarks for similar aircraft parts, considering the lack of competition?
Without competitive bids, establishing a precise market benchmark is challenging. However, the absence of competition inherently raises concerns about price reasonableness. An independent cost analysis or comparison with historical pricing for similar components, adjusted for inflation and contract terms, would be necessary to assess if the $72.1M award represents fair value.
What measures are in place to ensure the effectiveness and quality of the LAU-115D/A and LAU-116B/A parts delivered under this long-term contract?
While the contract type is 'FIRM FIXED PRICE', which shifts some cost risk to the contractor, the effectiveness and quality depend on the government's contract administration and inspection processes. Robust quality assurance surveillance plans and acceptance testing protocols are crucial to ensure the delivered parts meet stringent military specifications throughout the contract's duration.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: GUIDED MISSLES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 6125 E 21ST ST, INDIANAPOLIS, IN, 07
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $72,149,450
Exercised Options: $72,149,450
Current Obligation: $72,149,450
Contract Characteristics
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N0001905G0008
IDV Type: IDC
Timeline
Start Date: 2007-12-28
Current End Date: 2011-03-31
Potential End Date: 2011-03-31 00:00:00
Last Modified: 2012-02-24
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