FAA Awards Raytheon $197M for Dual Frequency Operations Systems

Contract Overview

Contract Amount: $197,322,096 ($197.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Transportation

Start Date: 2014-09-26

End Date: 2022-09-30

Contract Duration: 2,926 days

Daily Burn Rate: $67.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Transportation

Official Description: BASE AWARD - DUAL FREQUENCY OPERATIONS (DFO).THIS SF26 IS BEING GENERATED EXCLUSIVELY TO COMPLETE THE AWARD IN PRISM/DELPHI. PRISM IS UNABLE TO PRODUCE A SF26 THAT REFLECTS THE CORRECT AWARD VALUE. IGF::CT::IGF

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20591

State: District of Columbia Government Spending

Plain-Language Summary

Department of Transportation obligated $197.3 million to RAYTHEON COMPANY for work described as: BASE AWARD - DUAL FREQUENCY OPERATIONS (DFO).THIS SF26 IS BEING GENERATED EXCLUSIVELY TO COMPLETE THE AWARD IN PRISM/DELPHI. PRISM IS UNABLE TO PRODUCE A SF26 THAT REFLECTS THE CORRECT AWARD VALUE. IGF::CT::IGF Key points: 1. Significant award to Raytheon for critical aviation navigation systems. 2. Full and open competition suggests potential for competitive pricing. 3. Cost Plus Fixed Fee contract type may incentivize cost overruns. 4. Long contract duration (2014-2022) spans multiple fiscal years. 5. NAICS code 334511 indicates a focus on navigation instrument manufacturing.

Value Assessment

Rating: fair

The contract value of $197.3 million over approximately 8 years results in an average annual value of $24.7 million. Benchmarking this against similar complex navigation system contracts is difficult without more specific cost breakdowns, but the Cost Plus Fixed Fee structure warrants scrutiny.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This method generally promotes competitive pricing and allows the government to select the best value offer.

Taxpayer Impact: The competitive nature of the award is positive for taxpayers, as it aims to secure the best possible price for the required systems.

Public Impact

Enhances the safety and efficiency of air traffic control through advanced navigation technology. Supports the Federal Aviation Administration's mission to modernize the national airspace system. Impacts commercial and private aviation operations reliant on accurate navigation. Potential for technological advancements in aviation safety and communication.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type
Long contract duration
Lack of specific performance metrics in provided data

Positive Signals

Full and open competition
Award to established contractor
Critical infrastructure support

Sector Analysis

The Federal Aviation Administration (FAA) operates within the Transportation sector, with significant spending on IT and complex systems. This award for navigation systems aligns with the agency's need for advanced technology to manage air traffic and ensure safety, reflecting typical spending patterns for aviation infrastructure.

Small Business Impact

The data indicates this contract was awarded to Raytheon Company, a large defense contractor. There is no explicit mention of small business participation in this award, suggesting that small businesses may not have been primary contractors for this specific procurement.

Oversight & Accountability

The award was processed through PRISM/DELPHI, standard government financial systems. The note about PRISM being unable to produce a correct SF26 suggests a potential administrative or system issue that requires oversight to ensure accurate financial reporting and contract management.

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 structure can lead to higher costs than fixed-price contracts.
Long contract duration increases risk of cost escalation and obsolescence.
Potential for administrative errors in financial reporting (PRISM issue).
Lack of detailed performance metrics in the provided data hinders effectiveness assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $197.3 million to RAYTHEON COMPANY. BASE AWARD - DUAL FREQUENCY OPERATIONS (DFO).THIS SF26 IS BEING GENERATED EXCLUSIVELY TO COMPLETE THE AWARD IN PRISM/DELPHI. PRISM IS UNABLE TO PRODUCE A SF26 THAT REFLECTS THE CORRECT AWARD VALUE. IGF::CT::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 $197.3 million.

What is the period of performance?

Start: 2014-09-26. End: 2022-09-30.

What is the breakdown of costs within the Cost Plus Fixed Fee structure, and how does the fixed fee compare to industry standards for similar contracts?

The provided data does not detail the cost breakdown or the fixed fee percentage. A Cost Plus Fixed Fee (CPFF) contract reimburses the contractor for allowable costs plus a fixed fee representing profit. To assess value, one would need to compare the fixed fee to the total contract value and benchmark it against typical profit margins for complex system development and integration in the aerospace industry.

What are the key performance indicators (KPIs) for this contract, and how will their achievement be measured to ensure effectiveness and value for taxpayer money?

The provided data lacks specific Key Performance Indicators (KPIs) for this contract. Effective oversight would require clearly defined performance metrics related to system reliability, accuracy, uptime, and integration with existing air traffic control infrastructure. Regular performance reviews against these KPIs are crucial for ensuring the contractor meets obligations and delivers the expected value.

Given the long duration and CPFF structure, what mechanisms are in place to manage potential scope creep and ensure the final system meets evolving technological requirements?

With a long duration and CPFF structure, robust change control processes and regular technical reviews are essential. The FAA should implement strict procedures for managing any proposed changes to the system's scope, ensuring they are justified, cost-effective, and aligned with evolving aviation technology standards. Periodic re-evaluation of the contract's alignment with current and future needs is also critical.

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: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

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: $205,310,582

Exercised Options: $197,322,096

Current Obligation: $197,322,096

Actual Outlays: $53,311,175

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline