DOT Awards Raytheon $226.6M for FAA Navigation System Leases Under Full and Open Competition

Contract Overview

Contract Amount: $226,664,301 ($226.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Transportation

Start Date: 2012-09-24

End Date: 2029-07-14

Contract Duration: 6,137 days

Daily Burn Rate: $36.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: GEO 5/6 SERVICE LEASES IGF::OT::IGF

Place of Performance

Location: FULLERTON, ORANGE County, CALIFORNIA, 92833

State: California Government Spending

Plain-Language Summary

Department of Transportation obligated $226.7 million to RAYTHEON COMPANY for work described as: GEO 5/6 SERVICE LEASES IGF::OT::IGF Key points: 1. Significant contract value of $226.6 million over its period of performance. 2. Raytheon Company is the sole awardee, indicating a competitive award process. 3. The contract spans over 15 years, suggesting long-term system needs. 4. The sector is IT/Defense, focusing on critical navigation and guidance systems.

Value Assessment

Rating: good

The contract's fixed price structure provides cost certainty. Benchmarking against similar long-term, complex system leases is difficult without more granular data, but the value appears reasonable for the duration and scope.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a robust price discovery process. The definitive contract award to Raytheon indicates a competitive selection.

Taxpayer Impact: Taxpayer funds are being used for essential aviation infrastructure, ensuring operational efficiency and safety, which is a justifiable use of public funds.

Public Impact

Ensures continued operation and modernization of critical FAA navigation and guidance systems. Supports air traffic control and safety for commercial and private aviation. Provides long-term stability for a key technology provider in the aerospace sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 15 years) may limit future technology adoption.
Sole awardee could potentially reduce future competitive pressure if not managed.
Reliance on a single vendor for critical infrastructure.

Positive Signals

Awarded under full and open competition.
Firm fixed price contract provides cost predictability.
Long-term commitment ensures system stability and availability.

Sector Analysis

This contract falls within the IT and Defense sectors, specifically focusing on aerospace systems manufacturing. Spending in this area is critical for national infrastructure and security, with benchmarks often tied to technological advancement and system longevity.

Small Business Impact

The data does not indicate any specific set-asides for small businesses. The prime contractor, Raytheon Company, is a large aerospace and defense firm, suggesting limited direct opportunities for small businesses through this specific contract vehicle.

Oversight & Accountability

The contract is a definitive contract awarded by the FAA, a component of the Department of Transportation. Oversight would typically involve program management reviews and performance monitoring to ensure compliance with contract terms and delivery of services.

Related Government Programs

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

Risk Flags

Long-term dependency on a single vendor.
Potential for technology obsolescence over the contract's lifespan.
Limited visibility into specific technological components and their market competitiveness.
Lack of explicit small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $226.7 million to RAYTHEON COMPANY. GEO 5/6 SERVICE LEASES IGF::OT::IGF

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 $226.7 million.

What is the period of performance?

Start: 2012-09-24. End: 2029-07-14.

What is the specific technology being leased, and how does it compare to current market offerings?

The contract covers 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing.' Without specific technical details, it's hard to compare to current market offerings. However, given the long duration, it likely involves established, reliable systems rather than bleeding-edge technology, prioritizing stability and proven performance for critical aviation functions.

What are the potential risks associated with a sole awardee for such a critical, long-term contract?

A sole awardee for critical infrastructure presents risks of vendor lock-in, potential price increases upon renewal, and reduced incentive for innovation if competition is not reintroduced. It also concentrates risk, as the government becomes highly dependent on the performance and stability of a single company for essential services.

How does the $226.6 million value over 15 years translate to annual spending, and is it aligned with sector benchmarks?

The annual spending averages approximately $15.1 million ($226.6M / 15 years). This figure needs to be benchmarked against similar long-term, complex system lease contracts within the FAA or DoD. Without specific comparable data, it's difficult to definitively state alignment, but it appears to be a substantial, consistent investment in aviation technology.

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: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

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: $253,063,546

Exercised Options: $226,664,301

Current Obligation: $226,664,301

Actual Outlays: $78,143,723

Subaward Activity

Number of Subawards: 11

Total Subaward Amount: $20,095,839

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline