DoD's $1.99 Billion R&D Contract with Raytheon Company Awarded in 2000 for 4815 Days
Contract Overview
Contract Amount: $1,989,436,695 ($2.0B)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2000-10-25
End Date: 2013-12-31
Contract Duration: 4,815 days
Daily Burn Rate: $413.2K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 2
Pricing Type: COST PLUS INCENTIVE
Sector: R&D
Place of Performance
Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810
Plain-Language Summary
Department of Defense obligated $1.99 billion to RAYTHEON COMPANY for work described as: Key points: 1. Significant investment in R&D by the Department of Defense. 2. Raytheon Company is a major defense contractor, indicating potential for high-value work. 3. The contract type (Cost Plus Incentive) suggests shared risk and potential for cost overruns. 4. Research and Development in Physical, Engineering, and Life Sciences is a critical sector for national security.
Value Assessment
Rating: questionable
The contract value of $1.99 billion over approximately 13 years is substantial. Without specific benchmarks for similar R&D contracts of this duration and scope, it's difficult to definitively assess its value. The Cost Plus Incentive fee structure can lead to higher final costs than fixed-price contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which implies a limited competition. This method may not have explored all potential sources, potentially impacting price discovery and leading to a less competitive outcome.
Taxpayer Impact: The limited competition and Cost Plus Incentive fee structure raise concerns about the optimal use of taxpayer funds, as the final cost may not have been as aggressively negotiated as in a fully open competition.
Public Impact
Advancements in physical, engineering, and life sciences could have significant long-term benefits for national security and technological innovation. The substantial investment may lead to the development of new technologies and capabilities for the Department of Defense. The duration of the contract suggests a long-term commitment to research and development in these critical areas.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition raises concerns about cost-effectiveness.
- Cost Plus Incentive fee structure can lead to cost overruns.
- Long contract duration (4815 days) increases risk of scope creep and changing requirements.
- Lack of small business participation noted.
Positive Signals
- Significant investment in critical R&D areas.
- Potential for groundbreaking technological advancements.
- Award to a major defense contractor suggests capability.
Sector Analysis
This contract falls under Research and Development in the Physical, Engineering, and Life Sciences, a broad category crucial for technological advancement and national security. Spending in this sector is often characterized by high uncertainty and long development cycles, making cost benchmarking challenging.
Small Business Impact
The data indicates that small businesses were not involved in this contract (sb: false). This suggests a focus on large prime contractors for this specific R&D effort, potentially missing opportunities for innovation and economic participation from smaller, specialized firms.
Oversight & Accountability
The contract was awarded by the Department of the Army, a component of the Department of Defense. Oversight would typically involve program managers and contracting officers within the Army to monitor progress, costs, and adherence to contract terms, especially given the Cost Plus Incentive structure.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Potential for cost overruns due to contract type (CPIF).
- Limited competition may have resulted in suboptimal pricing.
- Long contract duration increases risk of obsolescence and changing requirements.
- Lack of small business participation.
Tags
research-and-development-in-the-physical, department-of-defense, ma, dca, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.99 billion to RAYTHEON COMPANY. See the official description on USAspending.
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 Army).
What is the total obligated amount?
The obligated amount is $1.99 billion.
What is the period of performance?
Start: 2000-10-25. End: 2013-12-31.
What specific technological advancements were achieved through this $1.99 billion R&D contract, and how do they compare to the initial objectives?
Assessing the specific technological advancements requires a deep dive into contract deliverables and performance reports. The $1.99 billion investment over nearly 13 years suggests a focus on complex, long-term research. Comparing achievements to initial objectives would involve reviewing the contract's statement of work and subsequent modifications, looking for evidence of successful prototypes, patents, or operational capabilities developed that align with the R&D goals set forth.
Given the 'Cost Plus Incentive' structure and limited competition, what was the final cost compared to the initial estimated cost, and were there significant cost overruns?
The Cost Plus Incentive fee structure inherently allows for costs to exceed initial estimates, with the government and contractor sharing in variances. Without access to the final contract cost and performance reports, it's impossible to determine the extent of cost overruns. Limited competition further complicates this, as it may have reduced the incentive for aggressive cost control from the outset.
How effective was this contract in fostering innovation within the specified R&D areas, and did it provide a competitive advantage to the Department of Defense?
The effectiveness of this contract in fostering innovation is difficult to gauge without specific performance metrics and outcome assessments. A $1.99 billion investment over a long period suggests a strategic intent to develop advanced capabilities. The true measure of effectiveness would lie in whether the developed technologies provided a tangible competitive advantage to the DoD, leading to improved operational capabilities or strategic positioning.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 2
Pricing Type: COST PLUS INCENTIVE (V)
Evaluated Preference: NONE
Contractor Details
Address: 350 LOWELL ST, ANDOVER, MA, 06
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2000-10-25
Current End Date: 2013-12-31
Potential End Date: 2013-12-31 00:00:00
Last Modified: 2014-03-07
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