DoD awards Raytheon $22M for E-4B AIU Obsolescence Upgrade, a sole-source contract
Contract Overview
Contract Amount: $22,082,406 ($22.1M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2011-05-31
End Date: 2013-11-30
Contract Duration: 914 days
Daily Burn Rate: $24.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: THE PURPOSE OF THIS LETTER CONTRACT IS TO ESTABLISH AND FUND UCA FOR E-4B MB1 AIU OBSOLESCENCE UPGRADE.
Place of Performance
Location: SEMINOLE, PINELLAS County, FLORIDA, 33777
State: Florida Government Spending
Plain-Language Summary
Department of Defense obligated $22.1 million to RAYTHEON COMPANY for work described as: THE PURPOSE OF THIS LETTER CONTRACT IS TO ESTABLISH AND FUND UCA FOR E-4B MB1 AIU OBSOLESCENCE UPGRADE. Key points: 1. Contract awarded to Raytheon Company for critical E-4B aircraft component upgrade. 2. Obsolescence upgrade addresses aging technology in a key military platform. 3. Sole-source award raises questions about price discovery and competition. 4. Spending falls within the Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing sector.
Value Assessment
Rating: questionable
The contract value of $22.08 million for an obsolescence upgrade is difficult to assess without specific component pricing. The lack of competition makes benchmarking challenging.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for the government.
Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for this critical upgrade.
Public Impact
Ensures continued operational readiness of the E-4B aircraft. Addresses critical obsolescence issues in vital communication equipment. Supports national security by maintaining advanced military platforms.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- Potential for overpricing due to lack of competitive bidding.
- Contract duration is substantial for an upgrade.
Positive Signals
- Addresses critical obsolescence.
- Supports a vital national security asset (E-4B).
Sector Analysis
This contract falls under the Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing sector. Spending in this sector can vary widely based on technological advancements and defense needs.
Small Business Impact
The contract was awarded to Raytheon Company, a large business. There is no indication of small business participation in this specific award.
Oversight & Accountability
The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. Oversight is crucial to ensure performance and manage costs, especially in sole-source procurements.
Related Government Programs
- Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition may lead to inflated costs.
- Potential for vendor lock-in with sole-source awards.
- Contract duration is lengthy for an upgrade.
- Limited transparency in pricing due to sole-source nature.
Tags
radio-and-television-broadcasting-and-wi, department-of-defense, fl, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $22.1 million to RAYTHEON COMPANY. THE PURPOSE OF THIS LETTER CONTRACT IS TO ESTABLISH AND FUND UCA FOR E-4B MB1 AIU OBSOLESCENCE UPGRADE.
Who is the contractor on this award?
The obligated recipient is RAYTHEON COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $22.1 million.
What is the period of performance?
Start: 2011-05-31. End: 2013-11-30.
What is the specific technical justification for the sole-source award, and were alternative solutions considered?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. The Department of Defense would need to provide documentation detailing the specific technical reasons for selecting Raytheon and demonstrating that no other vendor could meet the E-4B MB1 AIU obsolescence upgrade requirements within the necessary timeframe or specifications.
How was the $22.08 million price determined without competitive bidding, and what cost controls are in place?
Without competition, the price is likely based on cost-plus-incentive-fee or firm-fixed-price negotiations with the sole provider. The government would typically conduct a thorough cost analysis, reviewing Raytheon's proposed costs for labor, materials, and overhead, and applying profit margins. Robust oversight and auditing by the Defense Contract Management Agency are essential to ensure the price is fair and reasonable and to identify any potential cost overruns.
What is the long-term strategy for managing obsolescence in the E-4B AIU system beyond this upgrade?
This contract addresses immediate obsolescence. A long-term strategy would involve proactive lifecycle management, including continuous technology monitoring, planned upgrades, and potentially redesign efforts to incorporate more modern, sustainable components. The DoD should have a roadmap for future upgrades or replacements to prevent recurring obsolescence issues and ensure the E-4B's continued effectiveness.
Industry Classification
NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 8333 BRYAN DAIRY RD, LARGO, FL, 33777
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: $22,082,406
Exercised Options: $22,082,406
Current Obligation: $22,082,406
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2011-05-31
Current End Date: 2013-11-30
Potential End Date: 2013-11-30 00:00:00
Last Modified: 2018-07-10
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