DOT Awards $113M to Raytheon for Engineering Services via Delivery Order

Contract Overview

Contract Amount: $113,172,652 ($113.2M)

Contractor: Raytheon Company

Awarding Agency: Department of Transportation

Start Date: 2021-06-25

End Date: 2025-06-30

Contract Duration: 1,466 days

Daily Burn Rate: $77.2K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: STARS - DELIVERY ORDER 0003 (SS3)

Place of Performance

Location: MARLBOROUGH, MIDDLESEX County, MASSACHUSETTS, 01752

State: Massachusetts Government Spending

Plain-Language Summary

Department of Transportation obligated $113.2 million to RAYTHEON COMPANY for work described as: STARS - DELIVERY ORDER 0003 (SS3) Key points: 1. Significant contract value of $113M awarded to a major defense contractor. 2. Lack of competition raises questions about price discovery and potential overspending. 3. The contract is for engineering services, a critical but potentially high-cost area. 4. Long duration of 1466 days suggests a substantial, ongoing need for services.

Value Assessment

Rating: questionable

The contract type is Cost Plus Fixed Fee, which can incentivize cost overruns. Without a competitive benchmark, assessing the value for money is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and may lead to higher costs for taxpayers.

Taxpayer Impact: The lack of competition for a $113M contract means taxpayers may not be receiving the best possible price for these engineering services.

Public Impact

Taxpayers may be paying more than necessary due to the absence of competitive bidding. The Federal Aviation Administration's reliance on a single provider for critical engineering services could pose a risk if performance issues arise. The long contract duration suggests a sustained need for these services, impacting long-term budget planning.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost Plus Fixed Fee contract type
High contract value
Long contract duration

Positive Signals

Award to established contractor
Services critical to agency mission

Sector Analysis

Engineering services are crucial for infrastructure projects and technological development. The $113M award is substantial, but benchmarks for similar sole-source engineering contracts are needed for proper evaluation.

Small Business Impact

This award does not appear to include provisions for small business participation, as the prime contractor is Raytheon Company. Further analysis is needed to determine if subcontracting opportunities were explored.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure the FAA is receiving fair value and that the contractor is meeting performance requirements.

Related Government Programs

Engineering Services
Department of Transportation Contracting
Federal Aviation Administration Programs

Risk Flags

Lack of competition
Cost Plus Fixed Fee contract type
Potential for cost overruns
Limited transparency in pricing
No small business participation evident

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $113.2 million to RAYTHEON COMPANY. STARS - DELIVERY ORDER 0003 (SS3)

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 $113.2 million.

What is the period of performance?

Start: 2021-06-25. End: 2025-06-30.

What specific engineering services are being procured, and why was competition deemed impractical or impossible?

The contract is for engineering services under NAICS code 541330. The data indicates it was 'NOT COMPETED,' suggesting a sole-source justification was made. Without further details on the specific services and the justification for non-competition, it's difficult to assess the necessity of this approach or if alternative competitive strategies were considered.

What is the estimated cost savings or additional cost incurred due to the lack of competition for this $113M contract?

Quantifying the exact cost impact of non-competition is challenging without a competitive baseline. However, sole-source contracts, especially Cost Plus Fixed Fee, are generally associated with higher costs than competitively awarded ones. The absence of bidding likely means the government did not benefit from potential price reductions or innovative solutions that competition could have fostered.

How will the FAA ensure accountability and effective performance from Raytheon Company under this Cost Plus Fixed Fee contract?

The FAA must implement robust contract management and oversight. This includes detailed performance monitoring, regular reviews of cost expenditures against the fixed fee, and clear communication channels with Raytheon. Establishing specific, measurable performance metrics and holding the contractor accountable for meeting them will be crucial for ensuring effective service delivery and managing costs.

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: $140,000,000

Exercised Options: $113,772,652

Current Obligation: $113,172,652

Actual Outlays: $113,113,725

Subaward Activity

Number of Subawards: 38

Total Subaward Amount: $22,284,054

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