DoD Awards Raytheon $60.2M for ANDVT Cryptologic Modernization, Lacking Competition

Contract Overview

Contract Amount: $60,276,130 ($60.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2020-12-03

End Date: 2023-07-31

Contract Duration: 970 days

Daily Burn Rate: $62.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: VINSON/ADVANCED NARROWBAND DIGITAL VOICE TERMINAL (ANDVT) CRYPTOLOGIC MODERNIZATION (VACM) FULL RATE PRODUCTION (FRP)-DO#9

Place of Performance

Location: FORT WAYNE, ALLEN County, INDIANA, 46808

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $60.3 million to RAYTHEON COMPANY for work described as: VINSON/ADVANCED NARROWBAND DIGITAL VOICE TERMINAL (ANDVT) CRYPTOLOGIC MODERNIZATION (VACM) FULL RATE PRODUCTION (FRP)-DO#9 Key points: 1. Significant contract value of $60.2 million for critical communication modernization. 2. Sole-source award to Raytheon Company raises concerns about competitive pricing. 3. Potential for higher costs due to lack of competitive bidding. 4. The contract falls under the Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing sector.

Value Assessment

Rating: questionable

The contract's pricing is difficult to assess without competitive benchmarks. Given the sole-source nature, there's a risk that the price may not reflect the most cost-effective solution available in the market.

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 significantly limits price discovery and may lead to higher costs for the government compared to a fully competed procurement.

Taxpayer Impact: The lack of competition could result in taxpayers paying a premium for this cryptologic modernization.

Public Impact

Modernization of essential defense communication systems ensures operational effectiveness. The sole-source award may limit the adoption of newer, potentially more cost-effective technologies from other vendors. Ensuring the security and reliability of these communication terminals is paramount for national security.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for inflated pricing

Positive Signals

Essential defense modernization
Firms fixed price contract

Sector Analysis

This contract is within 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, but competitive bidding is crucial for managing costs.

Small Business Impact

The data indicates this contract was not awarded to small businesses. Further analysis would be needed to determine if small businesses had an opportunity to participate in subcontracting roles.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny from oversight bodies to ensure the government received fair value and that justifications for not competing were robust.

Related Government Programs

Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Sole-source award limits competition.
Potential for overpayment due to lack of price discovery.
Risk of missing out on more innovative or cost-effective solutions.
Lack of transparency in the procurement process.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $60.3 million to RAYTHEON COMPANY. VINSON/ADVANCED NARROWBAND DIGITAL VOICE TERMINAL (ANDVT) CRYPTOLOGIC MODERNIZATION (VACM) FULL RATE PRODUCTION (FRP)-DO#9

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 $60.3 million.

What is the period of performance?

Start: 2020-12-03. End: 2023-07-31.

What was the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?

The justification for a sole-source award typically involves factors such as unique capabilities, urgent need, or lack of adequate competition. Without specific documentation, it's difficult to ascertain the precise reasons. However, the absence of competition inherently raises questions about whether alternative solutions or vendors were thoroughly explored and considered.

How does the unit cost of this modernization compare to similar cryptographic equipment procured competitively?

Direct comparison of unit costs is challenging due to the sole-source nature of this award and the specific technical requirements of the ANDVT system. A competitive procurement would likely have yielded a clearer benchmark. Without competitive data, it's difficult to definitively state if the price is optimal, but the lack of competition suggests a potential for higher costs than might be achieved through market forces.

What is the long-term impact on technological advancement and cost-efficiency by awarding this contract without competition?

Awarding without competition can stifle innovation by not exposing the government to alternative technologies and solutions from a wider market. This can lead to higher long-term costs if more efficient or advanced systems become available but are not considered due to the existing sole-source relationship. It also reduces the incentive for vendors to offer their best pricing.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

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: 1010 PRODUCTION RD, FORT WAYNE, IN, 46808

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $60,276,130

Exercised Options: $60,276,130

Current Obligation: $60,276,130

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA830717D0017

IDV Type: IDC

Timeline