FAA Awards $110.6M Task Order to Raytheon for Aviation System Enhancements Under Full and Open Competition

Contract Overview

Contract Amount: $110,560,167 ($110.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Transportation

Start Date: 2022-08-10

End Date: 2028-08-08

Contract Duration: 2,190 days

Daily Burn Rate: $50.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: THE PURPOSE OF THIS ACTION IS TO ISSUE TASK ORDER 2 UNDER THE DFO2 IDIQ FOR TECHNICAL REFRESH AND ENHANCEMENT TASKS.

Place of Performance

Location: FULLERTON, ORANGE County, CALIFORNIA, 92833

State: California Government Spending

Plain-Language Summary

Department of Transportation obligated $110.6 million to RAYTHEON COMPANY for work described as: THE PURPOSE OF THIS ACTION IS TO ISSUE TASK ORDER 2 UNDER THE DFO2 IDIQ FOR TECHNICAL REFRESH AND ENHANCEMENT TASKS. Key points: 1. Significant investment in critical aviation infrastructure modernization. 2. Raytheon Company, a major defense contractor, secured the award. 3. Potential for cost overruns given the Cost Plus Fixed Fee contract type. 4. Focus on Search, Detection, Navigation, and Guidance systems.

Value Assessment

Rating: fair

The Cost Plus Fixed Fee (CPFF) contract type carries inherent risk for cost overruns, as the final price is not fixed. Benchmarking against similar technical refresh contracts is difficult without more detailed cost breakdowns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the CPFF structure may limit price discovery compared to fixed-price contracts.

Taxpayer Impact: Taxpayers bear the risk of potential cost overruns inherent in the CPFF contract type, though competition should have driven a reasonable initial price.

Public Impact

Enhances safety and efficiency of air traffic control and navigation. Supports modernization of critical national airspace infrastructure. Potential for technological advancements in aviation systems. Long-term contract duration (5 years) ensures sustained development.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type increases risk of cost overruns.
Lack of detailed cost breakdown makes precise benchmarking difficult.
No small business participation noted.

Positive Signals

Awarded under full and open competition.
Addresses critical national infrastructure needs.
Long contract duration allows for sustained improvements.

Sector Analysis

This contract falls within the IT and Defense sectors, specifically focusing on advanced navigation and guidance systems for aviation. Spending benchmarks for similar technical refresh programs can vary widely based on complexity and technology.

Small Business Impact

The data indicates no small business participation in this specific task order. Efforts to ensure small business subcontracting opportunities should be considered for future related procurements.

Oversight & Accountability

The Federal Aviation Administration (FAA) is responsible for overseeing this task order. Standard oversight procedures for IDIQ task orders, including performance monitoring and financial reviews, should be in place.

Related Government Programs

Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Department of Transportation Contracting
Federal Aviation Administration Programs

Risk Flags

Cost Plus Fixed Fee contract type.
Potential for scope creep.
Reliance on a single large contractor.
Lack of small business involvement.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $110.6 million to RAYTHEON COMPANY. THE PURPOSE OF THIS ACTION IS TO ISSUE TASK ORDER 2 UNDER THE DFO2 IDIQ FOR TECHNICAL REFRESH AND ENHANCEMENT TASKS.

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 $110.6 million.

What is the period of performance?

Start: 2022-08-10. End: 2028-08-08.

What specific technical advancements are expected from this task order, and how do they align with the FAA's long-term modernization goals?

This task order focuses on technical refresh and enhancement of existing systems, likely involving upgrades to software, hardware, and potentially sensor technology. The goal is to improve the reliability, performance, and security of search, detection, navigation, and guidance systems, ensuring they meet evolving aviation demands and maintain safety standards. These enhancements are crucial for the FAA's ongoing efforts to modernize the National Airspace System (NAS).

Given the CPFF contract type, what mechanisms are in place to control costs and mitigate the risk of budget overruns?

While CPFF contracts inherently carry cost risk, the FAA likely employs several oversight mechanisms. These include detailed cost tracking, regular performance reviews, and potentially incentive clauses tied to performance or cost savings. The contracting officer's representative (COR) plays a vital role in monitoring expenditures and ensuring work aligns with the contract's objectives and budget constraints.

How will the effectiveness of these technical enhancements be measured, and what are the key performance indicators (KPIs)?

Effectiveness will likely be measured through a combination of system performance metrics, reliability data, and user feedback. Key Performance Indicators (KPIs) could include system uptime, reduction in reported anomalies or failures, improved accuracy in navigation or detection, and successful integration with other air traffic management systems. The FAA will monitor these KPIs throughout the contract period to ensure the enhancements deliver the intended operational benefits.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › Transportation R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 1801 HUGHES DR, FULLERTON, CA, 92833

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: $118,246,967

Exercised Options: $110,560,167

Current Obligation: $110,560,167

Actual Outlays: $84,940,448

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $4,053,117

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 693KA822D00035

IDV Type: IDC

Timeline