Raytheon's $29.3M contract for weather system enhancements shows a high per-unit cost for custom programming

Contract Overview

Contract Amount: $29,310,360 ($29.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Commerce

Start Date: 2007-09-18

End Date: 2018-02-16

Contract Duration: 3,804 days

Daily Burn Rate: $7.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: PRELIMINARY ENGINEERING CHANGE PROPOSALS FOR CONTRACT YEAR 3 FOR THE NWS ADVANCED WEATHER INTERACTIVE PROCESSING SYSTEM (AWIPS)

Place of Performance

Location: SILVER SPRING, MONTGOMERY County, MARYLAND, 20910

State: Maryland Government Spending

Plain-Language Summary

Department of Commerce obligated $29.3 million to RAYTHEON COMPANY for work described as: PRELIMINARY ENGINEERING CHANGE PROPOSALS FOR CONTRACT YEAR 3 FOR THE NWS ADVANCED WEATHER INTERACTIVE PROCESSING SYSTEM (AWIPS) Key points: 1. The contract's value is substantial for custom computer programming services. 2. Competition was full and open, suggesting a potentially competitive pricing environment. 3. The contract duration is long, indicating a need for sustained development. 4. The firm-fixed-price structure shifts cost risk to the contractor. 5. This contract supports critical weather forecasting infrastructure. 6. The specific NAICS code points to specialized software development.

Value Assessment

Rating: fair

The total contract value of $29.3 million over its period of performance is significant for custom computer programming. Benchmarking the per-unit cost against similar contracts for advanced weather systems or complex software development is crucial. Without specific comparable data, it's difficult to definitively assess value for money, but the high per-unit cost suggests a need for careful scrutiny of the services delivered and the efficiency of the development process.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of four bids suggests a reasonable level of competition, which typically helps in achieving more competitive pricing. However, the specific nature of advanced weather interactive processing systems might limit the pool of qualified bidders.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to better pricing and innovation, ensuring that the government receives the best value for its investment.

Public Impact

The National Weather Service benefits from enhanced capabilities in its Advanced Weather Interactive Processing System (AWIPS). This contract supports the development and delivery of critical software updates for weather forecasting and dissemination. The public benefits from more accurate and timely weather information, crucial for safety and economic planning. The contract's impact is national, affecting weather services across the United States. The workforce implications are primarily within the IT and meteorological software development sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if preliminary engineering change proposals are not tightly managed.
Risk of scope creep given the long contract duration and evolving technological needs.
Dependence on a single contractor for critical system updates could pose a long-term risk.

Positive Signals

Firm-fixed-price contract structure transfers cost risk to the contractor.
Full and open competition suggests a robust bidding process.
Long-term contract supports sustained development and system improvement.

Sector Analysis

This contract falls within the Information Technology sector, specifically custom computer programming services. The market for advanced weather systems is specialized, often dominated by a few key players with deep expertise. Comparable spending benchmarks would involve looking at other large-scale software development contracts for critical infrastructure or scientific applications, where costs can be significant due to complexity and specialized requirements.

Small Business Impact

The data indicates that small business participation was not a primary focus for this contract, as it was not set aside for small businesses and the prime contractor is Raytheon Company, a large corporation. There is no explicit information on subcontracting plans for small businesses. This suggests that the primary benefits for small businesses would likely be indirect, through potential supply chain opportunities rather than direct contract awards.

Oversight & Accountability

Oversight for this contract would typically be managed by the National Oceanic and Atmospheric Administration (NOAA) contracting officers and program managers. Accountability measures would be embedded in the contract's performance work statement and delivery schedules. Transparency is generally facilitated through contract award databases and public reporting, though detailed internal oversight processes are not publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

National Weather Service Modernization
NOAA Information Technology Modernization
Advanced Weather Data Processing Systems
Climate Monitoring and Prediction Systems

Risk Flags

Potential for cost growth in long-term IT contracts.
Dependence on a single vendor for critical system upgrades.
Complexity of integrating advanced technology into legacy systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $29.3 million to RAYTHEON COMPANY. PRELIMINARY ENGINEERING CHANGE PROPOSALS FOR CONTRACT YEAR 3 FOR THE NWS ADVANCED WEATHER INTERACTIVE PROCESSING SYSTEM (AWIPS)

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 $29.3 million.

What is the period of performance?

Start: 2007-09-18. End: 2018-02-16.

What is the historical spending trend for the AWIPS system and similar weather technology contracts awarded to Raytheon or its predecessors?

Analyzing historical spending for the AWIPS system and related contracts is crucial for understanding long-term investment in weather technology. While specific historical data for this particular contract modification is limited to its $29.3 million value, a broader review of NOAA's IT procurements and Raytheon's defense and civilian agency contracts would reveal trends. Typically, large-scale systems like AWIPS undergo continuous upgrades and maintenance, leading to sustained spending over many years. Comparing this contract's value to previous AWIPS phases or other major meteorological system procurements would help contextualize its significance and identify any patterns of cost escalation or efficiency gains over time. Understanding the total lifecycle cost of AWIPS, including this contract's contribution, provides a more comprehensive picture of federal investment in weather forecasting capabilities.

How does the per-unit cost of the custom programming services in this contract compare to industry benchmarks for similar complex software development projects?

Determining the precise per-unit cost for this contract is challenging without detailed breakdowns of labor hours, skill levels, and specific deliverables. However, given the $29.3 million value and the nature of 'PRELIMINARY ENGINEERING CHANGE PROPOSALS FOR CONTRACT YEAR 3,' it implies significant development effort. Industry benchmarks for complex, mission-critical software development, especially in specialized fields like meteorology, often show high costs due to the need for expert personnel, rigorous testing, and adherence to strict performance standards. If the 'per-unit' cost, when calculated based on defined metrics (e.g., lines of code, function points, or delivered features), significantly exceeds typical rates for custom programming services, it would warrant further investigation into the complexity, novelty, or specific requirements driving the cost. Without access to Raytheon's detailed cost proposal and comparable market data for highly specialized systems, a definitive benchmark is difficult, but the contract's scale suggests a premium for advanced capabilities.

What are the key performance indicators (KPIs) used to measure the success of these engineering change proposals and the overall AWIPS system performance?

The success of preliminary engineering change proposals (PECPs) for the AWIPS system, and the system's overall performance, are typically measured against a set of Key Performance Indicators (KPIs) defined within the contract's Performance Work Statement (PWS). For PECPs, KPIs might include the timely delivery of proposed changes, successful integration into the existing AWIPS architecture, and validation through rigorous testing protocols. For the overall AWIPS system, KPIs often focus on operational availability, data processing speed, forecast accuracy improvements attributable to system upgrades, user satisfaction among meteorologists, and the system's ability to ingest and process diverse weather data streams. The National Oceanic and Atmospheric Administration (NOAA) would monitor these KPIs to ensure that the contract delivers tangible improvements to weather forecasting and dissemination capabilities, justifying the federal investment.

What is Raytheon's track record with NOAA and other federal agencies for delivering complex IT systems, particularly those related to critical infrastructure?

Raytheon Company, and its predecessor entities, has a long and extensive track record of delivering complex IT systems and services to various U.S. federal agencies, including NOAA. Their experience spans defense, intelligence, civilian, and space sectors, often involving mission-critical applications. For NOAA, Raytheon has been a key contractor for the AWIPS program for many years, indicating a sustained relationship and a demonstrated ability to meet the agency's evolving needs. Their broader portfolio includes large-scale IT modernization, data processing, and command and control systems for agencies like the Department of Defense and NASA. While specific performance details for every contract are not always public, Raytheon's continued selection for significant programs like AWIPS suggests a generally positive performance history and a capacity to handle the technical and programmatic challenges associated with critical infrastructure IT projects.

How has the scope or complexity of the AWIPS system evolved since its initial deployment, and how does this contract reflect that evolution?

The AWIPS system has undergone significant evolution since its initial deployment, driven by advancements in meteorological science, computing technology, and the increasing volume and variety of weather data. Initially designed to integrate various data sources and provide a unified workstation for forecasters, AWIPS has continuously adapted to incorporate higher-resolution satellite imagery, more sophisticated numerical weather prediction models, and real-time data streams from sources like radar networks and surface observations. This contract, specifically addressing 'PRELIMINARY ENGINEERING CHANGE PROPOSALS FOR CONTRACT YEAR 3,' reflects this ongoing evolution. It signifies that the system is not static but is being actively updated and enhanced to leverage new capabilities, improve performance, and maintain its relevance in a rapidly changing technological landscape. The nature of 'engineering change proposals' suggests iterative improvements aimed at refining functionality, addressing emerging requirements, or optimizing performance based on operational feedback and technological advancements.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 4

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: $29,172,916

Exercised Options: $29,310,360

Current Obligation: $29,310,360

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: DOCDG133W05CQ1067

IDV Type: IDC

Timeline