Air Force awards $27M Raytheon contract for Command and Control Switch System depot support

Contract Overview

Contract Amount: $26,968,621 ($27.0M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2024-01-01

End Date: 2024-12-31

Contract Duration: 365 days

Daily Burn Rate: $73.9K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER TO PROVIDE FOR CCSS DEPOT LEVEL SUPPORT FOR CY24 UNDER THE BASIC COMMAND AND CONTROL SWITCH SYSTEM CONTRACT.

Place of Performance

Location: SEMINOLE, PINELLAS County, FLORIDA, 33777

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $27.0 million to RAYTHEON COMPANY for work described as: DELIVERY ORDER TO PROVIDE FOR CCSS DEPOT LEVEL SUPPORT FOR CY24 UNDER THE BASIC COMMAND AND CONTROL SWITCH SYSTEM CONTRACT. Key points: 1. Contract focuses on essential depot-level maintenance for critical communication systems. 2. Sole-source award raises questions about potential cost efficiencies and market alternatives. 3. Performance period aligns with the fiscal year, ensuring continuous operational support. 4. The contract is a delivery order under an existing basic contract, suggesting a pre-established relationship. 5. Geographic focus on Florida for depot support may indicate specific logistical or operational needs.

Value Assessment

Rating: fair

The contract value of $26.97 million for one year of depot-level support for the Command and Control Switch System (CCSS) appears to be within a reasonable range for specialized military equipment maintenance. However, without direct benchmarks for CCSS depot support or comparable contracts for similar complex communication systems, a definitive value-for-money assessment is challenging. The firm-fixed-price structure provides cost certainty, but the lack of competition limits the opportunity for price discovery and potential savings.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Raytheon Company, was solicited. This approach is typically used when a unique capability or proprietary technology is involved, or in situations where only one source is available or capable of meeting the requirement. The absence of competition means that the government did not benefit from a bidding process that could have driven down prices or spurred innovation from multiple vendors.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage market competition to secure the best possible pricing, potentially leading to higher costs for taxpayers compared to a competitively bid contract.

Public Impact

The primary beneficiaries are the Department of the Air Force units relying on the Command and Control Switch System for operational communications. Services delivered include depot-level maintenance and support, ensuring the functionality and readiness of critical communication equipment. The geographic impact is centered in Florida, where the depot support activities will be performed. Workforce implications include the potential for skilled technicians and support staff employed by Raytheon or its subcontractors in Florida.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs than a competitive procurement.
Sole-source awards can limit opportunities for new or innovative solutions from other vendors.
Dependence on a single contractor for critical support could pose a risk if performance issues arise.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Delivery order under an existing basic contract suggests a streamlined process and potentially pre-vetted capabilities.
Focus on depot-level support indicates a commitment to maintaining existing critical infrastructure.

Sector Analysis

The Command and Control Switch System (CCSS) falls within the broader defense electronics and communication systems sector. This sector is characterized by high technological complexity, significant R&D investment, and long product lifecycles. Government spending in this area is substantial, driven by the need for secure and reliable communication networks for national security. Comparable spending benchmarks would involve other depot-level support contracts for complex military communication or electronic warfare systems, which often involve multi-million dollar values for specialized maintenance and sustainment.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Given the sole-source nature and the specialized technical requirements for depot-level support of complex communication equipment, it is unlikely that small businesses would be primary awardees. However, Raytheon Company may engage small businesses as subcontractors for specific components or services, though this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. As a delivery order under a basic contract, existing oversight mechanisms for that contract would likely apply. Transparency is facilitated by contract databases, but detailed performance metrics and specific oversight activities are not publicly disclosed. The Inspector General of the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse.

Related Government Programs

Command and Control Systems
Military Communication Equipment Maintenance
Defense Depot Support Contracts
Air Force Sustainment Programs
Raytheon Defense Contracts

Risk Flags

Sole-source award limits competition.
Potential for higher costs without competitive bidding.
Dependence on a single contractor for critical support.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.0 million to RAYTHEON COMPANY. DELIVERY ORDER TO PROVIDE FOR CCSS DEPOT LEVEL SUPPORT FOR CY24 UNDER THE BASIC COMMAND AND CONTROL SWITCH SYSTEM CONTRACT.

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 $27.0 million.

What is the period of performance?

Start: 2024-01-01. End: 2024-12-31.

What is Raytheon Company's track record with the Department of Defense for similar communication system support contracts?

Raytheon Company, now RTX, has a long and extensive history of providing complex systems and services to the Department of Defense, including communication systems, radar, and other defense electronics. They are a major defense contractor with numerous existing contracts across various branches of the military. For communication systems specifically, Raytheon has been involved in developing, manufacturing, and sustaining a wide array of equipment, from tactical radios to strategic command and control networks. Their track record generally includes successful delivery on large-scale programs, though like any major contractor, they have also faced scrutiny and challenges on specific contracts related to performance, cost, or schedule. The existence of a basic contract under which this delivery order was issued suggests a prior assessment of their capabilities and performance by the Air Force.

How does the $26.97 million cost compare to similar depot support contracts for military communication equipment?

Benchmarking the $26.97 million cost for one year of depot-level support for the Command and Control Switch System (CCSS) against similar contracts is challenging without access to a comprehensive database of defense contracts with detailed cost breakdowns and service scopes. However, annual sustainment and depot support for complex, mission-critical military systems, especially those involving specialized electronics and communication equipment, frequently run into the tens of millions of dollars. Factors influencing cost include the complexity of the system, the required level of technical expertise, the number of units supported, and the scope of maintenance (e.g., repair, overhaul, calibration). Given the sole-source nature, direct price comparison is difficult, but the value appears consistent with the specialized nature of supporting advanced military communication infrastructure.

What are the primary risks associated with a sole-source award for critical communication system support?

The primary risks associated with a sole-source award for critical communication system support include potential overpricing due to the lack of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and a lack of alternative options if performance issues arise or if the contractor's capabilities diminish. Taxpayers may bear a higher cost than if the contract were competed. Furthermore, reliance on a single vendor can create a strategic vulnerability if that vendor experiences financial difficulties, undergoes significant restructuring, or faces geopolitical challenges. The government's negotiating leverage is also diminished in a sole-source scenario, potentially impacting the terms and conditions of the contract.

What is the expected effectiveness of this contract in ensuring the readiness of Air Force communication capabilities?

This contract is expected to be highly effective in ensuring the readiness of the Air Force's Command and Control Switch System (CCSS) capabilities, provided Raytheon Company performs as contracted. Depot-level support is crucial for maintaining complex electronic systems, addressing component failures, performing scheduled overhauls, and ensuring that the equipment meets stringent military specifications. By securing dedicated support for a full fiscal year, the Air Force aims to minimize downtime, extend the operational life of the CCSS, and guarantee its availability for critical command and control functions. The firm-fixed-price nature incentivizes the contractor to manage costs while delivering the required maintenance services effectively.

How has spending on Command and Control Switch System support evolved over recent years?

Historical spending data specifically for the Command and Control Switch System (CCSS) depot support is not provided in the current data extract. However, general trends in defense spending indicate a consistent need for sustainment and maintenance of critical communication and command systems. The Air Force, like other branches, allocates significant portions of its budget to ensuring the operational readiness of its platforms. Spending on such support contracts can fluctuate based on the lifecycle stage of the equipment, modernization efforts, and overall defense budget priorities. The existence of a basic contract suggests a long-term requirement, implying recurring annual spending for support services, likely in the multi-million dollar range.

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: $26,968,621

Exercised Options: $26,968,621

Current Obligation: $26,968,621

Actual Outlays: $2,387,671

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $1,557,829

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