Raytheon Company awarded $12.1M for Advanced Synthetic Aperture Radar Sensor engineering services

Contract Overview

Contract Amount: $12,106,046 ($12.1M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2018-02-26

End Date: 2021-06-14

Contract Duration: 1,204 days

Daily Burn Rate: $10.1K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ENGINEERING SERVICES FOR SUPPORT AND SUSTAINMENT OF THE ADVANCED SYNTHETIC APERTURE RADAR SENSOR (ASARS-2A) SYSTEM.

Place of Performance

Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $12.1 million to RAYTHEON COMPANY for work described as: ENGINEERING SERVICES FOR SUPPORT AND SUSTAINMENT OF THE ADVANCED SYNTHETIC APERTURE RADAR SENSOR (ASARS-2A) SYSTEM. Key points: 1. Contract focuses on critical engineering support for a key defense sensor system. 2. Sole-source award raises questions about potential price efficiencies and market alternatives. 3. Long contract duration (1204 days) suggests a need for sustained technical expertise. 4. The ASARS-2A system is vital for intelligence, surveillance, and reconnaissance (ISR) capabilities. 5. Contract performance will be monitored by the Defense Contract Management Agency. 6. The nature of specialized engineering services may limit broad competition.

Value Assessment

Rating: fair

Benchmarking the value for this specific engineering support is challenging due to the sole-source nature and specialized technology. Without competitive bids, it's difficult to definitively assess if the $12.1 million represents optimal value for money. However, the cost-plus-fixed-fee structure implies that while the contractor's fee is fixed, the total cost can fluctuate based on actual labor and material expenses, which warrants careful oversight to manage potential cost overruns.

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 justified when a specific capability or technology is unique to a single provider, or in cases of urgent need where competition is not feasible. The lack of competition limits the government's ability to leverage market forces to drive down prices and explore alternative solutions.

Taxpayer Impact: Taxpayers may not benefit from the cost savings that typically arise from a competitive bidding process. The absence of multiple bids means there was no direct pressure on Raytheon to offer its lowest possible price.

Public Impact

The primary beneficiaries are the Department of Defense, which receives essential engineering support for a critical ISR asset. Services delivered include sustainment and support for the ASARS-2A system, ensuring its operational readiness. The geographic impact is primarily within the operational theaters where the ASARS-2A system is deployed. Workforce implications include the need for highly specialized engineers and technical personnel within Raytheon.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings for taxpayers.
Cost-plus-fixed-fee contract type can lead to cost increases if not closely managed.
Long contract duration may indicate a lack of readily available alternative solutions or a complex sustainment requirement.

Positive Signals

Award to Raytheon, a known defense contractor with established expertise in sensor systems.
Focus on sustaining a critical ISR asset ensures continued national security capabilities.
The contract specifies engineering services, indicating a focus on technical problem-solving and system improvement.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on advanced sensor technology and related engineering services. The market for such specialized systems is often characterized by high barriers to entry due to technological complexity and significant R&D investment. Spending in this area is driven by national security requirements for intelligence, surveillance, and reconnaissance capabilities. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of the ASARS-2A system, but overall defense spending on ISR platforms represents a substantial portion of the defense budget.

Small Business Impact

This contract does not appear to include specific small business set-aside provisions, nor is there an indication of significant subcontracting opportunities for small businesses based on the provided data. The sole-source nature of the award to a large prime contractor like Raytheon often limits the direct participation of small businesses in the prime contract itself. Further analysis would be needed to determine if Raytheon has a subcontracting plan that includes small businesses for specific components or services.

Oversight & Accountability

Oversight for this contract is managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The cost-plus-fixed-fee (CPFF) contract type necessitates rigorous financial oversight to monitor expenditures and ensure that costs remain within reasonable bounds relative to the fixed fee. Transparency is generally maintained through contract reporting mechanisms, though specific details of performance metrics and cost breakdowns may be considered sensitive.

Related Government Programs

Advanced Synthetic Aperture Radar Sensor (ASARS)
Intelligence, Surveillance, and Reconnaissance (ISR) Systems
Defense Engineering Services
Raytheon Company Contracts
Department of Defense Sensor Procurement

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.1 million to RAYTHEON COMPANY. ENGINEERING SERVICES FOR SUPPORT AND SUSTAINMENT OF THE ADVANCED SYNTHETIC APERTURE RADAR SENSOR (ASARS-2A) 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 $12.1 million.

What is the period of performance?

Start: 2018-02-26. End: 2021-06-14.

What is the specific technical capability of the ASARS-2A system that necessitates sole-source engineering support?

The Advanced Synthetic Aperture Radar Sensor (ASARS-2A) system is a sophisticated airborne radar designed for intelligence, surveillance, and reconnaissance (ISR) missions. Its primary function is to generate high-resolution imagery of the Earth's surface, even through cloud cover and at night, by using radar pulses. This capability is crucial for various military operations, including target detection, battle damage assessment, and reconnaissance of denied areas. The system's advanced nature, proprietary technology, and the specialized knowledge required for its sustainment and enhancement likely contribute to the sole-source justification, as Raytheon, as the original developer or integrator, possesses unique insights and intellectual property related to its complex architecture and operational parameters.

How does the cost-plus-fixed-fee (CPFF) contract structure impact the government's cost control for this $12.1 million award?

The Cost-Plus-Fixed-Fee (CPFF) structure means that Raytheon will be reimbursed for all allowable costs incurred in performing the contract, plus a predetermined fixed fee representing profit. While the fee is fixed, the total contract cost can vary depending on the actual expenses. This structure incentivizes the contractor to complete the work efficiently to avoid cost overruns that could erode their profit margin, but it also places a significant burden on the government's oversight to meticulously audit and approve all claimed costs. Effective cost control relies heavily on robust government auditing, clear definition of allowable costs, and vigilant monitoring of project progress against the estimated cost base.

What are the potential risks associated with a sole-source award for critical defense engineering services?

Sole-source awards for critical defense engineering services carry several inherent risks. Firstly, the absence of competition can lead to higher prices than might be achieved in a competitive environment, as the government lacks the leverage of multiple bids to negotiate favorable terms. Secondly, it can stifle innovation by limiting the exploration of alternative technologies or approaches that other potential vendors might offer. Thirdly, it creates a dependency on a single contractor, potentially reducing flexibility and increasing vulnerability if that contractor faces performance issues, financial instability, or strategic shifts. Finally, it can raise concerns about fairness and the efficient use of taxpayer funds, necessitating strong justification and rigorous oversight to ensure the award is truly in the government's best interest.

What is the historical spending trend for engineering services related to the ASARS-2A system or similar radar technologies?

Historical spending data for engineering services specifically tied to the ASARS-2A system is not detailed in the provided information. However, spending on sustainment, upgrades, and engineering support for advanced radar systems within the Department of Defense is typically substantial and ongoing throughout the lifecycle of such platforms. These systems require continuous technical attention due to technological evolution, operational wear and tear, and evolving mission requirements. Annual budgets for defense engineering services can run into billions of dollars across various platforms, reflecting the complexity and critical nature of these assets. Without specific contract history for ASARS-2A, it's difficult to establish a precise trend, but the nature of advanced defense technology suggests consistent, significant investment in its support.

How does the Defense Contract Management Agency (DCMA) ensure accountability and performance for this sole-source contract?

The Defense Contract Management Agency (DCMA) ensures accountability and performance through a multi-faceted approach tailored to the contract type and scope. For a sole-source CPFF contract like this, DCMA's responsibilities would include: validating the allowability, allocability, and reasonableness of incurred costs; monitoring contractor progress against the schedule and technical requirements; ensuring compliance with contract terms and conditions; and assessing contractor performance. They conduct audits, reviews, and surveillance activities to provide assurance to the contracting officer and the government that the contractor is meeting its obligations and that funds are being used appropriately. DCMA's role is critical in mitigating the risks associated with sole-source procurement and CPFF structures.

Industry Classification

NAICS: Manufacturing › Commercial and Service Industry Machinery Manufacturing › Optical Instrument and Lens Manufacturing

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 2000 E EL SEGUNDO BLVD, EL SEGUNDO, CA, 90245

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: $12,128,250

Exercised Options: $12,128,250

Current Obligation: $12,106,046

Actual Outlays: $984,166

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $490,509

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA852814D0023

IDV Type: IDC

Timeline