DOT Awards Raytheon $232.6M for FAA OPS Sustainment via Not Competed Delivery Order

Contract Overview

Contract Amount: $232,630,122 ($232.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Transportation

Start Date: 2021-05-26

End Date: 2026-05-31

Contract Duration: 1,831 days

Daily Burn Rate: $127.1K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: STARS - DELIVERY ORDER 0001 (OPS SUSTAINMENT)

Place of Performance

Location: MARLBOROUGH, MIDDLESEX County, MASSACHUSETTS, 01752

State: Massachusetts Government Spending

Plain-Language Summary

Department of Transportation obligated $232.6 million to RAYTHEON COMPANY for work described as: STARS - DELIVERY ORDER 0001 (OPS SUSTAINMENT) Key points: 1. Significant contract value for operational sustainment services. 2. Sole-source award to Raytheon raises questions about competition. 3. Long-term contract duration (5 years) warrants close monitoring. 4. Engineering services sector, with potential for high costs.

Value Assessment

Rating: questionable

The contract is a Cost Plus Fixed Fee type, which can lead to cost overruns if not managed tightly. Benchmarking against similar sustainment contracts is difficult without more detailed cost breakdowns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This delivery order was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive process.

Taxpayer Impact: The lack of competition for a large contract value may result in suboptimal pricing and reduced value for taxpayer funds.

Public Impact

Impacts the Federal Aviation Administration's operational capabilities. Ensures continuity of critical IT and engineering support systems. Potential for increased costs due to sole-source nature.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost Plus Fixed Fee contract type
Long contract duration

Positive Signals

Ensures critical operational sustainment

Sector Analysis

This contract falls within the Engineering Services sector, specifically related to operational sustainment for the FAA. Spending in this area is critical for maintaining complex government systems, but often lacks robust competition.

Small Business Impact

The data indicates no specific set-aside for small businesses on this contract. Large sole-source awards often bypass small business participation unless specifically mandated.

Oversight & Accountability

The sole-source nature of this award necessitates strong oversight from the FAA to ensure cost control and performance. Regular reviews of the fixed fee and cost reimbursements are crucial.

Related Government Programs

Engineering Services
Department of Transportation Contracting
Federal Aviation Administration Programs

Risk Flags

Lack of competition
Potential for cost overruns (CPFF)
Long contract duration
Limited transparency on specific services

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $232.6 million to RAYTHEON COMPANY. STARS - DELIVERY ORDER 0001 (OPS SUSTAINMENT)

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $232.6 million.

What is the period of performance?

Start: 2021-05-26. End: 2026-05-31.

What specific operational sustainment functions are covered under this contract, and how do they align with FAA's core mission needs?

This contract likely covers the maintenance, support, and potential upgrades for critical systems managed by the FAA's operations division. This could include air traffic control systems, communication networks, and data processing infrastructure. The alignment with the FAA's mission is direct, as operational sustainment is essential for safe and efficient air travel.

What justification was provided for the sole-source award, and what steps were taken to ensure fair and reasonable pricing?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one vendor can meet requirements. For this contract, the FAA would need to document why Raytheon was the only viable option. Ensuring fair and reasonable pricing would involve detailed cost analysis, comparison to historical data, and potentially negotiation of the fixed fee.

How will the FAA measure the effectiveness and value of Raytheon's performance over the contract's five-year duration?

Effectiveness will likely be measured through performance metrics and Service Level Agreements (SLAs) defined in the contract. Key Performance Indicators (KPIs) related to system uptime, response times, incident resolution rates, and user satisfaction will be tracked. Value will be assessed by comparing actual costs against the fixed fee and budget, and by evaluating the impact of the sustained operations on the FAA's overall mission success.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 1001 BOSTON POST RD E, MARLBOROUGH, MA, 01752

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: $250,000,000

Exercised Options: $242,630,122

Current Obligation: $232,630,122

Actual Outlays: $208,597,268

Subaward Activity

Number of Subawards: 28

Total Subaward Amount: $5,044,111

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: 693KA721D00001

IDV Type: IDC

Timeline