Raytheon Company awarded $12.9M for Miniature Air Launched Decoy contractor logistics support

Contract Overview

Contract Amount: $12,924,543 ($12.9M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2024-05-14

End Date: 2026-12-01

Contract Duration: 931 days

Daily Burn Rate: $13.9K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: MINIATURE AIR LAUNCHED DECOY (MALD) CONTRACTOR LOGISTICS SUPPORT

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $12.9 million to RAYTHEON COMPANY for work described as: MINIATURE AIR LAUNCHED DECOY (MALD) CONTRACTOR LOGISTICS SUPPORT Key points: 1. Contract awarded to Raytheon Company for essential logistics support of the Miniature Air Launched Decoy (MALD) system. 2. The contract type is Cost Plus Fixed Fee, which allows for reimbursement of costs plus a fixed fee for profit. 3. This award represents a significant investment in maintaining the operational readiness of a key defense asset. 4. The contract duration is 931 days, indicating a medium-term commitment to sustainment. 5. The contract was not competed, raising questions about potential price discovery and value for money. 6. The primary place of performance is Arizona, suggesting a concentration of logistics activities in that state.

Value Assessment

Rating: fair

The contract's Cost Plus Fixed Fee structure can lead to cost overruns if not closely monitored. Without a competitive bidding process, it is difficult to benchmark the pricing against market rates or alternative providers. The total award amount of $12.9 million over approximately 2.5 years needs further analysis to determine if it represents good value for the specialized logistics services provided for the MALD system. Comparisons to similar sustainment contracts for complex defense systems would be necessary for a more robust value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This typically occurs when a specific contractor possesses unique capabilities, intellectual property, or is the sole provider of a critical component or service. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices through market forces. It is crucial to understand the justification for this sole-source award to ensure it was indeed necessary and that fair pricing was negotiated.

Taxpayer Impact: The absence of competition means taxpayers may not have received the most cost-effective solution. Without multiple bids, there is a risk that the negotiated price is higher than it would have been in a competitive environment.

Public Impact

The primary beneficiaries are the U.S. Air Force units that rely on the MALD system for mission effectiveness. The services delivered include contractor logistics support, ensuring the operational readiness and maintenance of the MALD. The geographic impact is concentrated in Arizona, where the primary place of performance is located. This contract supports specialized technical roles within the defense logistics and aerospace sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Cost Plus Fixed Fee contracts require diligent oversight to control expenditures.
Sole-source awards necessitate strong justification and negotiation to ensure fair pricing.

Positive Signals

Ensures continued operational readiness of a critical defense asset (MALD).
Provides specialized logistics support, likely requiring unique expertise.
Contract duration suggests a commitment to long-term sustainment.

Sector Analysis

The defense sector, particularly within guided missile and space vehicle manufacturing and support, is characterized by high technological complexity and specialized supply chains. Contracts for logistics support are crucial for maintaining the readiness of advanced weapon systems like the MALD. The market for such specialized services is often limited, with a few key prime contractors holding significant positions. Benchmarking this contract's value would require comparison against other sustainment contracts for similar complex aerospace and defense equipment, considering factors like system criticality and technological sophistication.

Small Business Impact

There is no indication that this contract includes small business set-asides or subcontracting requirements. As a sole-source award to a large prime contractor, the direct impact on small businesses is likely minimal unless Raytheon actively engages them for subcontracting opportunities. Further investigation into Raytheon's subcontracting plans would be needed to assess any potential benefits or implications for the small business ecosystem.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract would primarily fall under the Department of the Air Force's contracting and program management offices. Robust oversight is critical to monitor costs, ensure performance standards are met, and prevent potential cost overruns inherent in this contract type. Transparency regarding the justification for the sole-source award and detailed cost reporting will be key accountability measures. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Miniature Air Launched Decoy (MALD) Program
Air Force Logistics Command Contracts
Defense Contractor Support Services
Guided Missile Manufacturing Support

Risk Flags

Sole-source award requires justification
Cost Plus Fixed Fee contract type necessitates close oversight
Potential for cost overruns in CPFF contracts

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.9 million to RAYTHEON COMPANY. MINIATURE AIR LAUNCHED DECOY (MALD) CONTRACTOR LOGISTICS SUPPORT

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 $12.9 million.

What is the period of performance?

Start: 2024-05-14. End: 2026-12-01.

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

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are awarded when only one responsible source can provide the required supplies or services. This could be due to proprietary technology, unique capabilities, urgent and compelling needs where competition is not feasible, or if the original source is the only one capable of meeting the requirements. A thorough review of the contract file and any associated justifications (e.g., Justification and Approval - J&A) would be necessary to understand the rationale behind not competing this requirement. Without this information, it is difficult to assess if the sole-source determination was appropriate and if fair and reasonable pricing was achieved.

How does the Cost Plus Fixed Fee (CPFF) contract structure compare to other contract types for logistics support in the defense sector, and what are the associated risks?

Cost Plus Fixed Fee (CPFF) contracts are often used when the scope of work is not precisely defined or when there is a high degree of uncertainty, such as in research and development or complex sustainment efforts. In this structure, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. Compared to fixed-price contracts, CPFF offers less cost certainty for the government, as the final price can fluctuate based on actual costs. However, it can incentivize contractors to perform work that might otherwise be too risky under a fixed-price arrangement. The primary risk for the government is cost overrun, as the contractor has less incentive to control costs once the fee is fixed. Robust government oversight, detailed cost tracking, and clear performance metrics are essential to mitigate these risks and ensure value for money.

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

Raytheon Company, now part of RTX, has an extensive track record in providing complex systems and support services to the Department of Defense, including logistics, sustainment, and maintenance for various platforms and weapon systems. They are a major defense contractor with significant experience in managing large-scale support contracts. Specific to the Miniature Air Launched Decoy (MALD) system, Raytheon is the original manufacturer, which typically positions them as the primary entity for sustainment and logistics due to inherent knowledge, proprietary data, and established supply chains. Assessing their performance on similar contracts would involve reviewing past performance evaluations, contract histories, and any reported issues or successes in delivering timely and effective logistics support for other advanced defense systems.

What are the potential implications of this contract on the operational readiness of the MALD system?

This contract is specifically for contractor logistics support (CLS) of the Miniature Air Launched Decoy (MALD) system. CLS is designed to ensure the operational readiness and availability of the system by providing maintenance, repair, spare parts, and technical support. Therefore, the successful execution of this contract is directly linked to maintaining the MALD's readiness for deployment. It implies that the Air Force relies on Raytheon's specialized expertise and resources to keep the MALDs functional and prepared for missions. The duration of the contract (over two years) suggests a commitment to sustained support, which is crucial for a system that requires ongoing maintenance and potential component replacements to remain effective.

How does the $12.9 million award compare to historical spending on MALD contractor logistics support?

To accurately compare this $12.9 million award to historical spending on MALD contractor logistics support, access to historical contract data for this specific service and system is required. This would involve searching federal procurement databases (like FPDS or SAM.gov) for previous awards related to MALD CLS, noting the contract types, durations, and total values. Without this historical context, it's challenging to determine if this award represents an increase, decrease, or is consistent with past investments. Factors such as inflation, changes in system requirements, or the number of systems being supported could influence year-over-year spending. A comparative analysis would reveal trends and help assess whether current spending aligns with historical patterns or indicates a shift in program support costs.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA852019R0003

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 1151 E HERMANS RD, TUCSON, AZ, 85756

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: $12,924,543

Exercised Options: $12,924,543

Current Obligation: $12,924,543

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA852020D0005

IDV Type: IDC

Timeline