Air Force's $22.7M Command and Control System Support Contract Awarded to Raytheon Company

Contract Overview

Contract Amount: $22,684,741 ($22.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2019-12-17

End Date: 2020-12-31

Contract Duration: 380 days

Daily Burn Rate: $59.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: COMMAND AND CONTROL SWITCH SYSTEM CONTRACT TASK ORDER FOR DEPOT LEVEL SUPPORT FOR CY20.

Place of Performance

Location: SEMINOLE, PINELLAS County, FLORIDA, 33777

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $22.7 million to RAYTHEON COMPANY for work described as: COMMAND AND CONTROL SWITCH SYSTEM CONTRACT TASK ORDER FOR DEPOT LEVEL SUPPORT FOR CY20. Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price efficiencies. 2. The contract supports depot-level maintenance for communication equipment, a critical but potentially high-cost service. 3. A single award without competition limits opportunities for market-driven cost reductions. 4. The fixed-price contract type shifts some performance risk to the contractor. 5. The contract duration of 380 days suggests a focused scope of work. 6. The award is a delivery order under a larger contract vehicle, details of which are not provided.

Value Assessment

Rating: fair

The contract value of $22.7 million for depot-level support of communication equipment appears within a reasonable range for specialized military systems. However, without a competitive bidding process, it is difficult to definitively benchmark the value for money. The fixed-price nature of the contract provides some cost certainty, but the absence of competition means potential savings from market forces were not realized. Further analysis would require comparison to similar sole-source contracts for comparable systems or a breakdown of the specific services rendered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Raytheon Company, was solicited. This approach bypasses the competitive process, which typically involves multiple companies bidding on the requirement. While sole-source awards can be justified for unique capabilities or urgent needs, they generally lead to less price discovery and potentially higher costs for the government compared to full and open competition.

Taxpayer Impact: The lack of competition means taxpayers may not be receiving the most cost-effective solution, as there was no pressure from competing firms to offer lower prices or more efficient service delivery.

Public Impact

The primary beneficiaries are the U.S. Air Force units relying on the Command and Control Switch System. The contract delivers essential depot-level maintenance and repair services for critical communication equipment. The geographic impact is primarily within Florida, where the contractor's facility is located. The contract supports specialized technical roles within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential taxpayer savings.
Lack of transparency in the justification for sole-source procurement.
Potential for cost overruns if not closely managed due to lack of competitive pressure.

Positive Signals

Fixed-price contract type provides some cost predictability.
Contractor (Raytheon) is a known entity with established capabilities in defense systems.
Supports critical command and control infrastructure for the Air Force.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on the maintenance and repair of complex communication and electronic systems. The market for such specialized depot-level support is often concentrated among a few large defense contractors. Benchmarking spending in this area is challenging without detailed service breakdowns, but it represents a necessary investment in maintaining operational readiness for critical military assets.

Small Business Impact

This contract does not appear to involve small business set-asides. As a sole-source award to a large prime contractor, there is no direct indication of subcontracting opportunities for small businesses within this specific delivery order. The overall impact on the small business ecosystem is likely minimal unless Raytheon Company actively pursues small business subcontractors for this effort.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Accountability measures are inherent in the fixed-price contract terms, requiring delivery of specified services. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Air Force Communication Systems Maintenance
Defense Depot Level Maintenance and Repair
Command and Control Systems Support
Raytheon Company Defense Contracts

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for unbenchmarked pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.7 million to RAYTHEON COMPANY. COMMAND AND CONTROL SWITCH SYSTEM CONTRACT TASK ORDER FOR DEPOT LEVEL SUPPORT FOR CY20.

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $22.7 million.

What is the period of performance?

Start: 2019-12-17. End: 2020-12-31.

What is Raytheon Company's track record with similar sole-source contracts for depot-level support?

Raytheon Company has a long history of performing complex defense contracts, including those involving depot-level maintenance and support for various military systems. As a major defense contractor, they frequently engage in sole-source procurements, often justified by proprietary technology, unique capabilities, or existing system sustainment responsibilities. Analyzing their past performance on similar sole-source awards would involve reviewing contract histories for cost overruns, schedule adherence, and quality of service. Without specific data on this contract's predecessors or comparable sole-source efforts, a definitive assessment of their track record in this specific context remains challenging. However, their established presence suggests a capacity to perform, though the absence of competition inherently limits external validation of efficiency and pricing.

How does the $22.7 million cost compare to market rates for similar communication equipment depot support?

Benchmarking the $22.7 million cost against market rates for similar communication equipment depot support is difficult without a competitive bidding process. Sole-source contracts inherently lack the price discovery mechanisms that competition provides. To assess value, one would ideally compare this contract to other government or commercial contracts for the depot-level maintenance of comparable command and control systems. Factors such as the complexity of the equipment, the scope of services (e.g., repair, overhaul, calibration, testing), required turnaround times, and the specific technologies involved would need to be considered. Given the specialized nature of military communication systems and the sole-source award, it is plausible that the price reflects unique requirements and contractor expertise, but without competitive data, it's hard to determine if it represents optimal value for taxpayers.

What are the primary risks associated with this sole-source contract award?

The primary risks associated with this sole-source contract award revolve around cost and performance. Without competition, there is a reduced incentive for the contractor, Raytheon Company, to minimize costs or maximize efficiency, potentially leading to higher prices than might be achieved through a competitive process. There's also a risk of complacency, where the contractor may not feel the same pressure to innovate or improve service delivery as they would in a competitive environment. Furthermore, the government's leverage in negotiating terms and pricing is diminished. Ensuring adequate oversight and performance metrics becomes crucial to mitigate these risks and ensure the government receives the required services at a reasonable cost, despite the lack of competitive pressure.

What is the historical spending pattern for Command and Control Switch System depot support by the Air Force?

Historical spending patterns for Command and Control Switch System depot support by the Air Force are not detailed in the provided data. This specific award is a delivery order for CY20, valued at $22.7 million. To understand historical spending, one would need to examine previous contracts for the same or similar systems, including their values, durations, and whether they were competitively awarded or sole-sourced. Analyzing trends over multiple fiscal years would reveal whether spending has increased, decreased, or remained stable, and whether the shift towards sole-source awards is a recent development or a long-standing practice for this particular system. Such analysis is crucial for identifying potential cost efficiencies or areas of concern in long-term sustainment strategies.

How does the fixed-price contract type mitigate or exacerbate risks for this specific contract?

The fixed-price contract type (FIRM FIXED PRICE) for this $22.7 million Command and Control Switch System depot support contract primarily aims to mitigate cost uncertainty for the government. Under this structure, the contractor, Raytheon Company, is obligated to complete the work for a predetermined price, regardless of their actual costs. This shifts the risk of cost overruns from the government to the contractor. However, this can also exacerbate risks if the initial price was not adequately negotiated due to the sole-source nature of the award. If the fixed price is too high, the government pays more than necessary. Conversely, if the price is too low and the contractor underestimates costs, they might be tempted to cut corners on quality or scope to maintain profitability, potentially impacting performance. Effective oversight is key to ensuring the contractor delivers the agreed-upon quality within the fixed price.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Communication Equipment Repair and Maintenance

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: Rockwell Collins Australia PTY Limited

Address: 7887 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: $23,333,027

Exercised Options: $23,333,027

Current Obligation: $22,684,741

Actual Outlays: $2,918,986

Subaward Activity

Number of Subawards: 13

Total Subaward Amount: $1,643,385

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA821820D0001

IDV Type: IDC

Timeline