Raytheon Company awarded $27.5M for Advanced Synthetic Aperture Radar System (ASARS-2) engineering services

Contract Overview

Contract Amount: $27,505,488 ($27.5M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2019-11-01

End Date: 2022-12-30

Contract Duration: 1,155 days

Daily Burn Rate: $23.8K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

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

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $27.5 million to RAYTHEON COMPANY for work described as: ENGINEERING SERVICES FOR SUPPORT SUSTAINMENT OF THE ADVANCED SYNTHETIC APERTURE RADAR SYSTEM (ASARS-2) SENSOR Key points: 1. Contract awarded to a single, established provider, raising questions about competitive pricing. 2. Services focus on sustaining a critical intelligence, surveillance, and reconnaissance (ISR) sensor. 3. Long-term contract duration suggests a need for ongoing specialized engineering expertise. 4. Fixed-price contract type aims to control costs, but without competition, true value is uncertain. 5. Performance is tied to the operational readiness of a key national security asset. 6. Geographic focus on California for service delivery.

Value Assessment

Rating: fair

The contract value of $27.5 million for engineering services over approximately three years appears reasonable for specialized support of a complex radar system. However, without competitive bidding, it is difficult to benchmark the pricing against market rates or determine if it represents the best value for the government. The fixed-price nature provides some cost certainty, but the lack of competition limits the government's ability to negotiate favorable terms.

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 required, or when only one responsible source is available. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices and potentially introduced innovative solutions from multiple providers.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to ensure the lowest possible price. It also limits opportunities for other qualified companies to secure government contracts.

Public Impact

The primary beneficiaries are the Department of the Air Force and national security operations relying on the ASARS-2 sensor. Services delivered include engineering support and sustainment for the radar system, ensuring its operational readiness. Geographic impact is primarily in California, where the services are performed. Workforce implications include the need for highly specialized engineers with expertise in radar systems and related technologies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in inflated costs.
Sole-source award limits potential for innovation from a broader market.
Dependence on a single contractor for critical system sustainment poses a risk.

Positive Signals

Contract awarded to a known entity with existing knowledge of the ASARS-2 system.
Fixed-price contract provides a degree of cost predictability.
Focus on sustainment ensures continued operational capability of a vital asset.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting advanced defense technology. The market for specialized aerospace and defense engineering services is often dominated by a few large, established companies due to the high barriers to entry, including technical expertise, security clearances, and intellectual property. Spending in this area is critical for maintaining the technological edge of national defense assets.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there information indicating subcontracting opportunities for small businesses. The sole-source nature of the award to a large prime contractor like Raytheon Company suggests that direct small business participation may be limited unless Raytheon proactively engages them for specific support.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. Accountability measures are inherent in the fixed-price contract terms, requiring delivery of specified services. Transparency is limited due to the sole-source nature, but contract awards are generally reported in federal procurement databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Advanced Synthetic Aperture Radar System (ASARS-2) Program
Intelligence, Surveillance, and Reconnaissance (ISR) Systems
Aerospace Engineering Services
Department of Defense Sustainment Contracts

Risk Flags

Sole-source award
Lack of competitive pricing
Potential for cost overruns without competition
Dependency on a single contractor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.5 million to RAYTHEON COMPANY. ENGINEERING SERVICES FOR SUPPORT SUSTAINMENT OF THE ADVANCED SYNTHETIC APERTURE RADAR SYSTEM (ASARS-2) SENSOR

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 $27.5 million.

What is the period of performance?

Start: 2019-11-01. End: 2022-12-30.

What is Raytheon Company's track record with similar advanced radar system sustainment contracts?

Raytheon Company, now part of RTX, has a long and extensive history of developing, manufacturing, and sustaining complex defense systems, including radar technologies. They are a primary contractor for numerous advanced sensor systems used by the U.S. military and allied nations. Their track record typically involves large, multi-year contracts requiring deep technical expertise and robust program management. While specific details on past performance for ASARS-2 sustainment are not provided here, Raytheon's general profile suggests significant experience in this domain. However, the absence of competition for this specific contract means that performance benchmarks against other potential providers are not available, making a direct comparison of their success rate in this instance challenging.

How does the $27.5 million contract value compare to similar engineering services for advanced radar systems?

Benchmarking the $27.5 million contract value for engineering services for the ASARS-2 system is challenging without more specific data on the scope of work, duration, and the complexity of the services provided. However, for sustainment and engineering support of advanced ISR sensors, this value appears within a reasonable range for a multi-year effort. Contracts for similar systems can range from tens to hundreds of millions of dollars, depending on the system's criticality, age, technological sophistication, and the level of support required (e.g., depot-level maintenance, software updates, hardware upgrades, field support). The fact that this was a sole-source award to Raytheon, a major defense contractor, suggests a specialized need, but also implies that a competitive process might have yielded a lower price point.

What are the primary risks associated with this sole-source contract for ASARS-2 sustainment?

The primary risks associated with this sole-source contract are centered around cost and innovation. Without competition, there is a significant risk of paying a premium price, as Raytheon faces no market pressure to offer the most cost-effective solution. Another risk is the potential for complacency; the contractor may have less incentive to innovate or improve service delivery when they are the only option. Furthermore, reliance on a single provider for the sustainment of a critical national security asset like ASARS-2 creates a dependency risk. Any disruption in Raytheon's ability to perform, whether due to financial issues, internal restructuring, or other unforeseen circumstances, could directly impact the operational readiness of the sensor, posing a national security risk.

How effective is the fixed-price contract type in ensuring program effectiveness for ASARS-2 sustainment?

The fixed-price contract type is generally effective in ensuring program effectiveness by establishing a clear cost ceiling and incentivizing the contractor to manage performance efficiently to maintain profitability. For ASARS-2 sustainment, this means Raytheon is contractually obligated to provide the specified engineering services within the agreed-upon budget. This structure helps the government control costs and provides predictability. However, the effectiveness is somewhat diminished by the sole-source nature. While the price is fixed, the government lacks the leverage of competition to ensure that the fixed price itself represents the best possible value. Program effectiveness, in terms of delivering high-quality, reliable sustainment services, relies heavily on Raytheon's internal processes and commitment, as well as the government's oversight, rather than solely on the contract type.

What are the historical spending patterns for ASARS-2 sustainment or similar systems by the Department of the Air Force?

Historical spending patterns for ASARS-2 sustainment and similar advanced ISR sensor systems by the Department of the Air Force typically involve significant, recurring investments. These systems are complex, require continuous maintenance, software updates, and specialized engineering support to remain operational and effective. Annual spending can fluctuate based on system upgrades, component replacements, and the overall operational tempo. While the $27.5 million over roughly three years for this specific contract is a substantial amount, it needs to be viewed within the broader context of the Air Force's overall budget for ISR assets. Without access to specific historical data for ASARS-2 sustainment, it's difficult to provide precise figures, but such systems generally represent a consistent line item in defense budgets due to their critical role in intelligence gathering.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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

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: 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: $30,292,850

Exercised Options: $30,292,850

Current Obligation: $27,505,488

Actual Outlays: $4,701,478

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $453,470

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA852820D0023

IDV Type: IDC

Timeline