Raytheon Company's AWIPS O&M contract awarded $190M over 13 years for custom computer programming

Contract Overview

Contract Amount: $190,382,845 ($190.4M)

Contractor: Raytheon Company

Awarding Agency: Department of Commerce

Start Date: 2005-08-16

End Date: 2018-02-16

Contract Duration: 4,567 days

Daily Burn Rate: $41.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: AWIPS OPERATIONS & MAINTENANCE (O&M)

Place of Performance

Location: SILVER SPRING, MONTGOMERY County, MARYLAND, 20910

State: Maryland Government Spending

Plain-Language Summary

Department of Commerce obligated $190.4 million to RAYTHEON COMPANY for work described as: AWIPS OPERATIONS & MAINTENANCE (O&M) Key points: 1. Contract value represents significant investment in critical weather data systems. 2. Long contract duration suggests a stable, ongoing need for these services. 3. Fixed-price contract type aims to control costs and provide predictability. 4. Sole-source competition dynamics may limit price discovery and potentially increase costs. 5. Performance period spans over a decade, indicating long-term reliance on contractor. 6. Geographic concentration in Maryland for contract performance.

Value Assessment

Rating: fair

The contract's total value of approximately $190 million over 13 years for AWIPS Operations & Maintenance is substantial. Benchmarking this against similar large-scale IT service contracts for critical infrastructure is challenging without more specific data on scope and complexity. The firm-fixed-price structure is a positive indicator for cost control, but the lack of robust competition raises concerns about whether the government achieved optimal value. The per-unit cost is difficult to ascertain due to the broad nature of 'operations and maintenance' services over such a long period.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely considered. However, the data provided does not specify the number of bids received or the nature of the competition beyond 'full and open'. A robust competitive process is generally expected to drive down prices and encourage innovation. The absence of details on bidder count or specific competitive strategies makes a definitive assessment of its effectiveness difficult.

Taxpayer Impact: A full and open competition, when effectively executed with multiple strong bidders, should lead to better pricing for taxpayers by fostering a competitive environment. This contract's long duration and significant value mean that even small percentage improvements in pricing due to competition can result in substantial savings.

Public Impact

The National Oceanic and Atmospheric Administration (NOAA) benefits through the continued operation and maintenance of the Advanced Weather Interactive Processing System (AWIPS). This system is crucial for processing and disseminating weather data, supporting forecasting and public safety. The services delivered ensure the reliability of weather prediction tools used by meteorologists nationwide. Geographic impact is nationwide, as AWIPS supports weather services across the United States. Workforce implications include the need for specialized IT personnel to maintain and operate the system, potentially supporting jobs within the contractor's organization and related IT sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (13 years) could lead to vendor lock-in and reduced flexibility.
Reliance on a single contractor for critical O&M functions may pose risks if performance degrades.
Lack of specific details on competition effectiveness beyond 'full and open' limits assessment of value.
Potential for cost creep over the long term if contract terms are not rigorously managed.

Positive Signals

Firm-fixed-price contract type provides cost certainty and incentivizes contractor efficiency.
Awarded under full and open competition, suggesting a broad market search.
Long-term contract indicates a stable and predictable need for these essential services.
Significant investment in AWIPS demonstrates commitment to critical weather infrastructure.

Sector Analysis

The contract falls within the Custom Computer Programming Services sector, a vital part of the IT industry. This sector supports the development, maintenance, and enhancement of software and IT systems for government agencies. The AWIPS system is a complex, mission-critical application for meteorological data processing. Comparable spending benchmarks would typically involve other large-scale government IT service contracts, particularly those focused on data processing, infrastructure management, and specialized software for scientific or operational purposes. The annual spending, averaging around $14.6 million ($190M / 13 years), is significant but may be within the expected range for maintaining such a sophisticated national system.

Small Business Impact

The provided data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). As a large-scale IT services contract, it is likely that the prime contractor, Raytheon Company, is a large business. There is no explicit information regarding subcontracting plans or performance related to small businesses. Without specific subcontracting goals or reporting, it is difficult to assess the direct impact on the small business ecosystem. However, large prime contractors often utilize small businesses for specialized services, so there may be indirect benefits.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Commerce and the National Oceanic and Atmospheric Administration (NOAA). As a firm-fixed-price contract, oversight would focus on ensuring the contractor meets the defined service levels and deliverables. Transparency is generally facilitated through contract award databases and reporting mechanisms. Inspector General jurisdiction would apply to investigate any potential fraud, waste, or abuse related to the contract's execution. The long duration necessitates ongoing monitoring to ensure continued value and performance.

Related Government Programs

NOAA Weather Radio
National Weather Service Modernization
Federal Civilian IT Modernization Programs
Government Cloud Computing Initiatives
Critical Infrastructure Protection Programs

Risk Flags

Long contract duration may lead to technological obsolescence.
Potential for vendor lock-in over the 13-year period.
Performance monitoring critical due to long-term nature.
Scope creep risk management essential for fixed-price contract.

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $190.4 million to RAYTHEON COMPANY. AWIPS OPERATIONS & MAINTENANCE (O&M)

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Commerce (National Oceanic and Atmospheric Administration).

What is the total obligated amount?

The obligated amount is $190.4 million.

What is the period of performance?

Start: 2005-08-16. End: 2018-02-16.

What is the specific scope of 'Operations & Maintenance' for the AWIPS system under this contract?

The 'Operations & Maintenance' (O&M) scope for the AWIPS system under this contract likely encompasses a broad range of services essential for the continuous and effective functioning of the weather data processing and dissemination platform. This typically includes software maintenance (bug fixes, patches, updates), hardware maintenance (servers, workstations, network infrastructure), system administration, performance monitoring, troubleshooting, and ensuring system availability and reliability. It may also involve managing system upgrades, data backups, disaster recovery procedures, and providing technical support to end-users within NOAA and affiliated agencies. The exact deliverables and service level agreements (SLAs) would be detailed in the contract's statement of work, defining specific performance metrics and response times for various issues.

How does the $190 million total contract value compare to similar weather data processing systems or IT infrastructure contracts?

Comparing the $190 million total contract value for AWIPS O&M over 13 years requires context regarding the complexity and criticality of the system. AWIPS is a cornerstone of the National Weather Service's operations, integrating data from numerous sources to support forecasting. Large-scale IT infrastructure and data processing contracts for critical national systems can easily run into hundreds of millions or even billions of dollars over similar timeframes. For instance, major IT modernization efforts in other federal agencies or the development/maintenance of large scientific computing facilities often involve comparable or higher expenditures. The annual average of approximately $14.6 million suggests a significant but potentially reasonable investment for maintaining a nationwide, mission-critical weather information system, especially when considering the specialized nature of meteorological data and processing requirements.

What are the key risks associated with a 13-year contract for critical IT operations and maintenance?

A 13-year contract for critical IT operations and maintenance presents several key risks. Firstly, technological obsolescence is a significant concern; technology evolves rapidly, and a long-term contract might lock the government into outdated systems or processes, hindering adoption of newer, more efficient solutions. Secondly, vendor lock-in can occur, making it difficult and costly to switch providers or bring services in-house later. Thirdly, performance degradation over time is a risk; contractor motivation or capability might wane, or key personnel could leave, impacting service quality. Fourthly, the fixed-price nature, while good for initial cost control, might not adequately account for unforeseen cost increases in labor, software, or hardware over such an extended period, potentially leading to scope disputes or demands for modification. Finally, the long duration reduces flexibility to adapt to changing agency needs or budget realities.

What is the track record of Raytheon Company in delivering large-scale IT services to the federal government?

Raytheon Company, now part of RTX, has a substantial track record of delivering complex technology solutions and services to the federal government, including extensive work in defense, intelligence, and civilian sectors. They are known for managing large, mission-critical programs that often involve sophisticated IT infrastructure, software development, and systems integration. While specific performance details for the AWIPS contract are not provided here, Raytheon's general profile suggests they possess the scale and technical expertise required for such endeavors. Government contract databases and performance reviews (like CPARS) would offer more granular insights into their past performance on similar contracts, highlighting successes, challenges, and areas of excellence or concern.

How does the firm-fixed-price contract type influence cost management and potential for cost overruns?

The firm-fixed-price (FFP) contract type is designed to provide cost certainty for the government and incentivize the contractor to manage costs efficiently. Under an FFP agreement, the contractor is obligated to complete the work for a predetermined price, regardless of their actual costs. This shifts the risk of cost overruns to the contractor. For the government, this means the total expenditure is largely predictable, assuming the scope of work remains constant. However, if the scope of work needs to change significantly due to unforeseen circumstances or evolving requirements, contract modifications (and associated cost increases) may become necessary. While FFP is generally preferred for controlling costs, it can sometimes lead to contractors cutting corners on quality or service if not adequately monitored, or it may result in higher initial pricing to compensate for the risk the contractor assumes.

What are the implications of this contract being awarded under 'Full and Open Competition' for taxpayers?

Awarding a contract under 'Full and Open Competition' implies that the government solicited proposals from all responsible sources, allowing for the widest possible range of potential contractors to compete. For taxpayers, this process is generally beneficial as it is intended to foster a competitive environment. Competition typically drives down prices, encourages innovation, and ensures that the government receives the best value for its money. When multiple qualified bidders submit proposals, they are incentivized to offer competitive pricing and superior technical solutions to win the contract. This process helps prevent monopolies, reduces the risk of inflated pricing, and increases transparency. However, the ultimate benefit to taxpayers depends on the effectiveness of the competition itself – the number of bidders, the quality of proposals received, and the rigor of the evaluation process.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 22260 PACIFIC BLVD, DULLES, VA, 20166

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $190,382,845

Exercised Options: $190,382,845

Current Obligation: $190,382,845

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: DOCDG133W05CQ1067

IDV Type: IDC

Timeline