DoD Awards Raytheon $31.6M for ASARS-2 Sensor Engineering, Lacking Competition
Contract Overview
Contract Amount: $31,580,752 ($31.6M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2020-11-01
End Date: 2022-08-30
Contract Duration: 667 days
Daily Burn Rate: $47.3K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
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
Plain-Language Summary
Department of Defense obligated $31.6 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. Significant contract value for specialized engineering services. 2. Sole reliance on Raytheon raises concerns about competitive pricing. 3. Potential for cost overruns due to cost-plus contract type. 4. Focus on critical defense technology (ASARS-2 sensor).
Value Assessment
Rating: questionable
The $31.6 million award for specialized engineering services appears high given the lack of competition. Without competitive bids, it's difficult to ascertain if the pricing reflects fair market value compared to similar specialized engineering contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, indicating a lack of competitive bidding. This significantly limits price discovery and may lead to higher costs for the government.
Taxpayer Impact: The absence of competition likely results in taxpayers paying a premium for these essential engineering services.
Public Impact
Ensures continued operation of a critical advanced radar system. Supports national defense capabilities through sensor maintenance. Potential for taxpayer funds to be used inefficiently due to sole-source award.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of transparency in pricing
Positive Signals
- Supports critical defense technology
- Ensures system sustainment
Sector Analysis
This contract falls within the Engineering Services sector, specifically supporting advanced defense systems. Benchmarks for similar specialized engineering services are hard to establish due to the unique nature of the ASARS-2 system and the sole-source award.
Small Business Impact
The contract was not awarded to a small business. There is no indication of subcontracting opportunities for small businesses in the provided data.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the contractor is performing efficiently and that costs are reasonable. Accountability for pricing should be a key focus.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award limits competition and price discovery.
- Cost-plus contract type carries inherent risk of cost overruns.
- Lack of transparency in the justification for sole-sourcing.
- Potential for inflated pricing due to absence of competitive pressure.
Tags
engineering-services, department-of-defense, ca, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $31.6 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 $31.6 million.
What is the period of performance?
Start: 2020-11-01. End: 2022-08-30.
What is the justification for the sole-source award, and were any attempts made to explore competitive options?
The justification for a sole-source award typically stems from unique capabilities or proprietary technology held by a single vendor. While the data doesn't specify the exact reason, further investigation into the necessity of this exclusivity is crucial. Exploring alternative solutions or phased competitions could potentially yield better value in the future, even for highly specialized systems.
How are costs being controlled under the Cost Plus Fixed Fee (CPFF) contract structure for this specialized service?
Under a CPFF contract, the government reimburses the contractor's allowable costs plus a predetermined fixed fee. Effective cost control relies on robust government oversight of incurred costs, clear definition of 'allowable costs,' and negotiation of a reasonable fixed fee. Regular audits and performance reviews are essential to prevent cost overruns and ensure value.
What is the long-term strategy for ensuring competitive sourcing for future sustainment of the ASARS-2 system?
The long-term strategy should involve market research to identify potential competitors or develop alternative solutions. If Raytheon's technology remains unique, the government could explore options like incentivizing Raytheon to share technical data or developing in-house capabilities. Planning for future competitions, even if phased, is vital to avoid perpetual sole-source reliance.
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: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: RTX Corp
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: $32,337,223
Exercised Options: $31,580,752
Current Obligation: $31,580,752
Subaward Activity
Number of Subawards: 10
Total Subaward Amount: $642,679
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
Start Date: 2020-11-01
Current End Date: 2022-08-30
Potential End Date: 2022-08-30 00:00:00
Last Modified: 2022-08-12
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