Raytheon Company awarded $5.5M for B-2 CDM Repair, a sole-source contract for aircraft parts

Contract Overview

Contract Amount: $5,536,898 ($5.5M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2024-02-28

End Date: 2028-07-31

Contract Duration: 1,615 days

Daily Burn Rate: $3.4K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: B-2 CDM REPAIR

Place of Performance

Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $5.5 million to RAYTHEON COMPANY for work described as: B-2 CDM REPAIR Key points: 1. Contract awarded to a single vendor, raising questions about price competitiveness. 2. Focus on repair services suggests a need for specialized expertise for the B-2 bomber. 3. Long performance period indicates potential for sustained demand and cost escalation. 4. Contract type is Firm Fixed Price, which can limit cost overruns but may inflate initial pricing. 5. Geographic location in California may influence labor costs and logistical considerations. 6. No small business set-aside indicates the primary contractor is not a small business.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and specific application to the B-2 bomber. Without competitive bids, it's difficult to ascertain if the $5.5 million price represents fair market value. The firm fixed-price structure aims to control costs, but the absence of competition means taxpayers may not be benefiting from the lowest possible price. Further analysis would require access to historical repair costs for similar components or data on alternative repair solutions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, meaning it was awarded directly to Raytheon Company without soliciting bids from other potential suppliers. This approach is typically used when only one source can provide the required goods or services, often due to proprietary technology, unique expertise, or urgent needs. The lack of competition limits the government's ability to leverage market forces to achieve the best possible pricing and terms.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This contract's value could potentially be higher than if it had been subject to a competitive bidding process.

Public Impact

The primary beneficiaries are the Department of Defense, ensuring the continued operational readiness of the B-2 bomber fleet. Services delivered include the repair of Critical Defense Materials (CDM) components for the B-2 bomber. Geographic impact is primarily within California, where the repair work will be conducted. Workforce implications include the employment of skilled technicians and engineers at Raytheon's facility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Long contract duration (over 4 years) could lead to cost creep if not closely managed.
Lack of transparency in the justification for sole-sourcing makes it difficult to assess necessity.
Reliance on a single contractor for critical repairs could pose a supply chain risk.

Positive Signals

Firm Fixed Price contract provides cost certainty for the government.
Award to Raytheon, a known defense contractor, suggests access to specialized B-2 expertise.
Contract addresses critical repair needs for a strategic asset (B-2 bomber).

Sector Analysis

The aerospace and defense sector is characterized by high barriers to entry, complex supply chains, and significant government investment. Contracts for specialized aircraft repair, particularly for advanced platforms like the B-2 bomber, often involve proprietary technology and require highly skilled labor. Spending in this sub-sector is driven by national security requirements and the need to maintain aging fleets. Comparable spending benchmarks are difficult to establish without detailed cost breakdowns and specific component information, but repair and maintenance for major defense platforms typically represent a substantial portion of defense budgets.

Small Business Impact

This contract does not include a small business set-aside, indicating that the primary award was made to a large business, Raytheon Company. There is no explicit information provided regarding subcontracting opportunities for small businesses. Without a set-aside or specific subcontracting goals, the direct impact on the small business ecosystem for this particular contract is likely minimal, though Raytheon may engage small businesses as part of its broader supply chain.

Oversight & Accountability

Oversight for this contract will likely be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractors meet performance and quality standards. Accountability measures are embedded within the Firm Fixed Price contract terms, which obligate Raytheon to deliver specified repairs within the agreed-upon price. Transparency is limited due to the sole-source nature of the award; however, contract details are generally available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

B-2 Spirit Bomber Sustainment
Aircraft Component Repair Services
Defense Logistics Agency (DLA) Maintenance, Repair, and Overhaul (MRO) contracts
Air Force Materiel Command (AFMC) Procurement

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for cost overruns without competition
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $5.5 million to RAYTHEON COMPANY. B-2 CDM REPAIR

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 $5.5 million.

What is the period of performance?

Start: 2024-02-28. End: 2028-07-31.

What is the specific justification for awarding this contract on a sole-source basis to Raytheon Company?

The provided data indicates the contract was 'NOT COMPETED' and is 'sole-source'. While the specific justification is not detailed in the provided data, common reasons for sole-source awards in defense contracting include the unique capabilities or proprietary technology held by a single contractor, the need for urgent repairs where only one source can respond quickly, or the requirement for compatibility with existing systems where only one vendor can provide the necessary parts or services. For a specialized platform like the B-2 bomber, Raytheon, as a major defense contractor involved in its development and production, likely possesses unique expertise and access to proprietary technical data essential for its repair. A formal Justification for Other Than Full and Open Competition (JOFOC) would typically be required and documented by the agency.

How does the $5.5 million contract value compare to historical spending on B-2 CDM repairs?

Direct comparison of the $5.5 million contract value to historical spending on B-2 CDM repairs is not possible with the provided data alone. This contract represents a specific delivery order with a defined start and end date (February 28, 2024, to July 31, 2028). To establish a historical benchmark, one would need access to previous contracts for similar B-2 CDM repair services, including their values, durations, and the specific components repaired. Analyzing trends in repair costs, inflation, and changes in the B-2 fleet's operational status would be necessary for a comprehensive comparison. The absence of competitive bidding further complicates direct value assessment against market rates.

What are the primary risks associated with a sole-source contract for critical aircraft repair?

The primary risks associated with a sole-source contract for critical aircraft repair include potential overpricing due to the lack of competition, reduced incentive for the contractor to innovate or improve efficiency, and increased vulnerability to supply chain disruptions if the sole provider faces operational issues. Taxpayers may bear a higher cost than necessary. Furthermore, the government's negotiating leverage is diminished. For critical systems like the B-2 bomber, reliance on a single source for repairs could also pose a national security risk if that source becomes unavailable or fails to meet performance requirements. Ensuring robust oversight and performance management becomes paramount.

What is the expected impact of this contract on the operational readiness of the B-2 bomber fleet?

This contract is expected to positively impact the operational readiness of the B-2 bomber fleet by ensuring the availability of necessary repairs for Critical Defense Materials (CDM) components. The B-2 is a strategic asset, and maintaining its components is crucial for its continued deployment and mission capability. By awarding this contract, the Department of Defense is addressing potential maintenance needs, thereby reducing the risk of component failures that could ground aircraft or limit their operational effectiveness. The duration of the contract suggests a commitment to ongoing support, contributing to the long-term sustainment of the B-2 fleet.

Are there any performance metrics or key performance indicators (KPIs) associated with this contract?

The provided data does not explicitly list performance metrics or Key Performance Indicators (KPIs) for this contract. However, as a Firm Fixed Price contract for repair services, performance is typically measured against the timely and successful completion of the specified repairs according to technical specifications and quality standards. The Defense Contract Management Agency (DCMA) would likely monitor Raytheon's performance to ensure adherence to the contract terms. Specific KPIs might include turnaround time for repairs, defect rates, and compliance with delivery schedules, though these would be detailed in the full contract documentation.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary 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

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 2000 E EL SEGUNDO BLVD, EL SEGUNDO, CA, 90245

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: $5,536,898

Exercised Options: $5,536,898

Current Obligation: $5,536,898

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA811923D0002

IDV Type: IDC

Timeline