Raytheon Company awarded $30.4M contract for Osprey navigation integration by GSA

Contract Overview

Contract Amount: $30,432,270 ($30.4M)

Contractor: Raytheon Company

Awarding Agency: General Services Administration

Start Date: 2020-01-16

End Date: 2026-06-30

Contract Duration: 2,357 days

Daily Burn Rate: $12.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: NAVAIR OSPREY NAVIGATION INTEGRATION

Place of Performance

Location: PATUXENT RIVER, SAINT MARYS County, MARYLAND, 20670

State: Maryland Government Spending

Plain-Language Summary

General Services Administration obligated $30.4 million to RAYTHEON COMPANY for work described as: NAVAIR OSPREY NAVIGATION INTEGRATION Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Long contract duration of over 6 years may indicate complex integration needs. 3. Cost-plus-fixed-fee structure allows for cost reimbursement plus a fixed fee, potentially incentivizing cost control. 4. The 'Other Computer Related Services' NAICS code suggests a focus on software and IT integration. 5. Contract awarded by GSA's Federal Acquisition Service, a common channel for IT and professional services. 6. No small business set-aside indicates potential for large prime contractor involvement.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific deliverables or comparable sole-source IT integration contracts. The cost-plus-fixed-fee structure, while common for complex projects, can sometimes lead to higher costs if not managed tightly. The fixed fee component provides some cost certainty for the government, but the overall cost is subject to the contractor's actual expenses.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, meaning there was no open bidding process. Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. This lack of competition means the government did not benefit from potential price reductions or innovative solutions that might have emerged from a competitive environment.

Taxpayer Impact: Taxpayers may have paid a higher price than in a competitive scenario, as there was no market pressure to drive down costs.

Public Impact

The primary beneficiaries are likely the U.S. military, specifically those operating or maintaining the Osprey aircraft, through enhanced navigation capabilities. The service delivered is critical IT integration for advanced military platforms. The geographic impact is primarily within Maryland, where the contract is managed. Workforce implications may include specialized IT and engineering roles at Raytheon Company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits transparency and potential for cost savings through competition.
Cost-plus-fixed-fee contracts can carry risks of cost overruns if not rigorously overseen.
Long contract duration may increase exposure to scope creep or evolving technological requirements.

Positive Signals

Award to a large, established defense contractor like Raytheon suggests access to specialized expertise.
Fixed fee component provides a degree of cost predictability for the government.
Contract duration allows for sustained focus on a complex integration task.

Sector Analysis

This contract falls within the broader Information Technology and Professional Services sector, specifically focusing on specialized integration services for defense platforms. The market for defense IT integration is characterized by high barriers to entry due to security requirements and the need for specialized technical knowledge. Comparable spending benchmarks are difficult to establish without more detail on the specific navigation systems and integration complexity.

Small Business Impact

The absence of a small business set-aside and the sole-source nature of this award suggest that small businesses are unlikely to be direct prime contractors. While Raytheon may engage small businesses as subcontractors, their direct participation in this specific contract is not indicated. This contract does not appear to directly support the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration (GSA) and potentially the Department of Defense, depending on the ultimate end-user. Accountability measures are inherent in the contract terms, particularly the fixed fee and performance requirements. Transparency is limited due to the sole-source nature of the award, with public details restricted to contract award notices.

Related Government Programs

Defense IT Modernization Programs
Avionics Systems Integration
Military Navigation Systems
Naval Air Systems Command (NAVAIR) Contracts

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $30.4 million to RAYTHEON COMPANY. NAVAIR OSPREY NAVIGATION INTEGRATION

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $30.4 million.

What is the period of performance?

Start: 2020-01-16. End: 2026-06-30.

What is Raytheon Company's track record with similar sole-source IT integration contracts for defense platforms?

Raytheon Company, now part of RTX, has a long history of performing complex IT integration and systems engineering for various defense platforms, including aircraft. They are a major defense contractor with extensive experience in sole-source and competitively awarded contracts. Their track record typically involves large-scale projects requiring specialized technical expertise and adherence to stringent security and performance requirements. Specific details on past sole-source IT integration contracts for navigation systems would require a deeper dive into historical contract databases and performance reviews, but their overall profile suggests a capability to handle such complex, specialized work.

How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for this type of service, and what are the implications for value?

The Cost-Plus-Fixed-Fee (CPFF) structure is often used for research and development or complex integration projects where the scope is not fully defined at the outset, or where innovation is a key component. It reimburses the contractor for allowable costs and pays a fixed fee, which is intended to represent profit. Compared to fixed-price contracts, CPFF offers less cost certainty for the government but can be more flexible. Compared to cost-plus-incentive-fee (CPIF) or cost-plus-award-fee (CPAF), the fixed fee provides a stable profit margin for the contractor, potentially reducing the incentive for extreme cost efficiency compared to performance-based fee structures. The value is realized if the integration is successfully completed, but rigorous oversight is crucial to manage costs effectively.

What are the primary risks associated with a sole-source award for a long-duration IT integration contract?

The primary risks associated with a sole-source award for a long-duration IT integration contract include a lack of competitive pressure, which can lead to higher prices and potentially less innovation. The government may not achieve the best possible value for its money. For long-duration contracts, there's also the risk of scope creep, where requirements evolve over time, potentially increasing costs beyond initial estimates if not managed carefully. Furthermore, reliance on a single contractor can create vendor lock-in and reduce flexibility if the contractor's performance declines or if alternative solutions become available. The government's bargaining power is also diminished in a sole-source scenario.

What is the typical market size and competitive landscape for specialized navigation integration services for military aircraft?

The market for specialized navigation integration services for military aircraft is a niche but critical segment within the broader aerospace and defense industry. It is dominated by a few large, established defense contractors with deep technical expertise, security clearances, and existing relationships with government agencies. The competitive landscape is often limited due to the high barriers to entry, including specialized engineering talent, proprietary technologies, and stringent qualification processes. While some smaller, specialized firms may exist, major sole-source or limited-competition awards are common for complex platform integration, making the overall market size difficult to quantify precisely but significant in terms of contract values.

How does the 'Other Computer Related Services' NAICS code (541519) inform our understanding of the contract's scope?

The NAICS code 541519, 'Other Computer Related Services,' indicates that the contract's primary focus is on computer-related services that are not elsewhere classified. This typically includes services such as IT consulting, systems integration, custom software development, and IT support. For this contract, it suggests that the Osprey navigation integration likely involves significant software development, system configuration, data integration, and potentially IT infrastructure support to ensure the new navigation systems function seamlessly with existing aircraft systems. It points towards a heavy IT component rather than purely hardware manufacturing or installation.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: ID07190041

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 6125 E 21ST ST, INDIANAPOLIS, IN, 46219

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $30,432,270

Exercised Options: $30,432,270

Current Obligation: $30,432,270

Actual Outlays: $18,880,659

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $877,819

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline