Raytheon Company awarded $16.3M for AN/AAQ-26 Infrared Detection System logistics support

Contract Overview

Contract Amount: $16,335,194 ($16.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2008-12-31

End Date: 2014-01-31

Contract Duration: 1,857 days

Daily Burn Rate: $8.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Defense

Official Description: CONTRACTOR LOGISTICS SUPPORT FOR THE AN/AAQ-26 INFRARED DETECTION SYSTEM

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75070

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $16.3 million to RAYTHEON COMPANY for work described as: CONTRACTOR LOGISTICS SUPPORT FOR THE AN/AAQ-26 INFRARED DETECTION SYSTEM Key points: 1. Contract provides essential logistics support for a critical defense system. 2. Awarded through full and open competition, indicating a competitive bidding process. 3. The contract duration of over 1800 days suggests a long-term need for these services. 4. The 'Other Scientific and Technical Consulting Services' NAICS code points to specialized technical expertise required. 5. Contractor, Raytheon Company, is a major defense contractor with extensive experience. 6. The 'Cost No Fee' contract type shifts cost risk to the government. 7. The contract was awarded by the Defense Contract Management Agency, a key oversight body.

Value Assessment

Rating: fair

The contract value of $16.3 million over approximately five years for logistics support of a specialized defense system appears within a reasonable range for such services. However, without specific benchmarks for the AN/AAQ-26 system's maintenance and support, a precise value-for-money assessment is challenging. The 'Cost No Fee' (CNF) contract type, while potentially incentivizing the contractor to control costs, places the ultimate financial risk on the government. This type of contract requires robust government oversight to ensure costs remain reasonable and that the contractor is not incentivized to inflate expenses.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which implies that while the competition was generally open, specific sources may have been excluded for particular reasons. The fact that it was competed suggests that multiple vendors were likely considered. The level of competition, even with exclusions, generally aids in price discovery and can lead to more favorable pricing for the government compared to sole-source awards. However, the specific nature of the exclusion could impact the breadth of competition.

Taxpayer Impact: A competitive award process, even with exclusions, is generally beneficial for taxpayers as it aims to secure the best possible price and service through market forces. This approach helps prevent inflated costs that might arise from a lack of competitive pressure.

Public Impact

The primary beneficiaries are the U.S. Department of Defense, ensuring the operational readiness of the AN/AAQ-26 Infrared Detection System. Services delivered include crucial logistics support, maintenance, and potentially technical consultation for the specified system. The geographic impact is likely concentrated where the AN/AAQ-26 systems are deployed, potentially globally, supporting military operations. Workforce implications may involve specialized technical personnel employed by Raytheon Company to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Cost No Fee' contract type places cost risk on the government, necessitating vigilant oversight to prevent cost overruns.
The exclusion of sources in the 'full and open competition' could potentially limit the range of competitive bids received.
Lack of detailed performance metrics in the provided data makes it difficult to assess the contractor's efficiency and effectiveness.
The contract's long duration could lead to potential cost increases due to inflation or unforeseen technical challenges over time.

Positive Signals

Awarded through a competitive process, suggesting a degree of market validation for the proposed solution and price.
Raytheon Company is a well-established defense contractor with a proven track record in complex systems support.
The contract supports a critical defense system, indicating its importance to national security and military operations.
The 'Other Scientific and Technical Consulting Services' classification points to specialized expertise being leveraged.

Sector Analysis

The defense logistics and support sector is a significant segment of the broader aerospace and defense industry. This contract falls under the category of specialized technical services supporting advanced military hardware. The market for such services is often dominated by large, established defense contractors like Raytheon due to the high technical barriers to entry and the need for security clearances and specialized knowledge. Spending in this area is driven by the need to maintain the operational readiness of complex weapon systems throughout their lifecycle.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). As a large prime contract awarded to Raytheon Company, there may be subcontracting opportunities for small businesses, but this is not explicitly detailed. The impact on the small business ecosystem would depend on whether Raytheon actively seeks small business subcontractors for specialized components or services related to the logistics support.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractors meet their contractual obligations. The 'Cost No Fee' nature of the contract requires diligent government oversight of incurred costs to ensure reasonableness and allocability. Transparency is typically managed through contract reporting mechanisms and audits, though the extent of public transparency for specific defense logistics contracts can vary.

Related Government Programs

AN/AAQ-26 Infrared Detection System
Defense Logistics Support Services
Aerospace and Defense Contractor Services
Scientific and Technical Consulting Services
Department of Defense Procurement

Risk Flags

Cost No Fee contract type places cost risk on the government.
Potential for limited competition due to exclusion of sources.
Lack of detailed performance metrics in provided data.
Long contract duration may introduce unforeseen cost escalations.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.3 million to RAYTHEON COMPANY. CONTRACTOR LOGISTICS SUPPORT FOR THE AN/AAQ-26 INFRARED DETECTION SYSTEM

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 $16.3 million.

What is the period of performance?

Start: 2008-12-31. End: 2014-01-31.

What is the historical spending trend for logistics support of the AN/AAQ-26 Infrared Detection System?

Analyzing historical spending for the AN/AAQ-26 Infrared Detection System's logistics support requires access to historical contract data beyond this single award. This $16.3 million contract, spanning from late 2008 to early 2014, represents a significant investment over its duration. To understand trends, one would need to examine previous contracts for the same system, potentially from its initial fielding, and compare award values, contract types, and durations. Factors such as system upgrades, changes in operational tempo, and evolving maintenance strategies would influence these historical spending patterns. Without this broader dataset, it's difficult to ascertain if this contract represents an increase, decrease, or stable level of spending for this specific system's support.

How does the 'Cost No Fee' (CNF) contract type compare to other contract types for similar defense logistics services?

The 'Cost No Fee' (CNF) contract type is less common for logistics support compared to Cost Plus Incentive Fee (CPIF) or Firm-Fixed-Price (FFP) contracts. In a CNF contract, the contractor is reimbursed for allowable costs but receives no fee or profit. This places the entire cost risk on the government. While it can incentivize contractors to minimize costs to avoid losses, it can also lead to a lack of motivation for efficiency or innovation if the contractor is not financially rewarded for exceeding expectations. FFP contracts offer price certainty to the government but place cost risk on the contractor, incentivizing efficiency. CPIF contracts share cost risks and rewards between the government and contractor, often used when cost targets can be reasonably established. For logistics, FFP or CPIF might be preferred to ensure contractor motivation and performance.

What is Raytheon Company's track record with similar defense logistics contracts?

Raytheon Company, now RTX, has an extensive and long-standing track record in providing logistics, sustainment, and technical support for a wide array of defense systems, including radar, missile defense, and command and control platforms. Their experience spans decades and involves supporting complex, technologically advanced equipment for various branches of the U.S. military and international allies. This includes managing supply chains, providing maintenance and repair services, engineering support, and training. Given their position as a major defense prime contractor, Raytheon is generally considered capable of handling large-scale, critical support contracts like the one for the AN/AAQ-26 system. Performance reviews and past performance evaluations in federal procurement databases would offer more granular insights into their specific success rates and any past issues.

What are the potential risks associated with the 'full and open competition after exclusion of sources' award type?

The 'full and open competition after exclusion of sources' award type presents a nuanced risk profile. While it aims for broad competition, the exclusion of specific sources, even if justified (e.g., proprietary technology, national security concerns), inherently limits the pool of potential bidders. This reduction in competition could potentially lead to less aggressive pricing than a truly unrestricted full and open competition. There's also a risk that the excluded sources might have offered unique capabilities or more cost-effective solutions. The justification for exclusion needs to be robust to ensure it doesn't inadvertently stifle competition or lead to a suboptimal outcome for the government. Transparency regarding the reasons for exclusion is crucial for assessing this risk.

How does the NAICS code '541690 - Other Scientific and Technical Consulting Services' align with the contract description?

The NAICS code '541690 - Other Scientific and Technical Consulting Services' aligns well with the contract description for 'CONTRACTOR LOGISTICS SUPPORT FOR THE AN/AAQ-26 INFRARED DETECTION SYSTEM.' Logistics support often involves a significant component of technical consulting, including advising on maintenance schedules, troubleshooting complex technical issues, recommending upgrades or modifications, and providing expert analysis related to the system's performance and operational effectiveness. While 'logistics' itself might suggest warehousing or transportation, the 'support' aspect, especially for advanced defense systems, heavily relies on specialized scientific and technical knowledge. This code captures the expertise required to maintain and optimize the functionality of sophisticated equipment like an infrared detection system.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Other Scientific and Technical Consulting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Address: 2501 W UNIVERSITY DR, MCKINNEY, TX, 75071

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $16,574,007

Exercised Options: $16,574,007

Current Obligation: $16,335,194

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline