Raytheon Company awarded $38.4M for Advanced Synthetic Aperture Radar System (ASARS-2) sensor engineering support

Contract Overview

Contract Amount: $38,362,505 ($38.4M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2021-11-01

End Date: 2024-02-29

Contract Duration: 850 days

Daily Burn Rate: $45.1K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

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

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $38.4 million to RAYTHEON COMPANY for work described as: ENGINEERING SERVICES AND SUPPORT FOR THE ADVANCED SYNTHETIC APERTURE RADAR SYSTEM (ASARS-2) SENSOR (AIR SUPPORT). Key points: 1. Contract focuses on critical engineering and support for an advanced radar system, indicating a need for specialized technical expertise. 2. The sole-source nature of this award warrants scrutiny regarding the justification for limited competition. 3. Performance risk appears moderate, given the specialized nature of the technology and the contractor's established role. 4. This contract supports a key intelligence, surveillance, and reconnaissance (ISR) capability for the Air Force. 5. The cost-plus-fixed-fee contract type suggests that costs are reimbursed, with a fixed fee for profit, which can incentivize cost control but requires careful oversight.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without detailed cost breakdowns and comparisons to similar sole-source engineering support contracts. The cost-plus-fixed-fee structure necessitates robust oversight to ensure costs remain reasonable and the fixed fee is appropriate for the level of effort and risk involved. Given the specialized nature of ASARS-2, it's plausible that Raytheon possesses unique knowledge, but the absence of competition limits the ability to verify optimal pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Raytheon Company, was solicited. The justification for sole-source procurement typically involves unique capabilities, proprietary technology, or urgent needs where only one source can reasonably fulfill the requirement. This limits price discovery and potentially leads to higher costs compared to a fully competed contract.

Taxpayer Impact: Taxpayers may face higher costs due to the lack of competitive bidding. Without multiple offers, there is less pressure on the contractor to offer the most competitive price.

Public Impact

The primary beneficiaries are the Department of the Air Force and its intelligence, surveillance, and reconnaissance (ISR) missions. Services delivered include essential engineering support and maintenance for the ASARS-2 sensor system. The geographic impact is primarily within the operational theaters where the ASARS-2 system is deployed, with support likely originating from contractor facilities in California. Workforce implications include the need for highly skilled engineers and technical specialists in radar systems and aerospace engineering.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost-plus-fixed-fee contracts require diligent oversight to manage costs effectively.
Lack of transparency in sole-source justifications can obscure potential alternatives.

Positive Signals

Contract supports a critical national security capability (ASARS-2).
Contractor (Raytheon) likely possesses specialized knowledge of the ASARS-2 system.
Contract duration provides stability for essential system support.

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 characterized by high barriers to entry due to intellectual property, security clearances, and technical expertise requirements. Companies like Raytheon are major players in this sector, often holding sole-source positions for legacy or highly specialized systems where they are the original equipment manufacturer or possess unique sustainment knowledge.

Small Business Impact

This contract does not appear to involve a small business set-aside. As a sole-source award to a large prime contractor, there are no direct subcontracting opportunities mandated for small businesses within the contract's structure itself. However, the prime contractor may engage small businesses for specific components or services, but this is not guaranteed by the contract terms.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within the Department of the Air Force. They are responsible for monitoring performance, approving invoices, and ensuring compliance with contract terms. The cost-plus-fixed-fee nature requires rigorous financial oversight to validate incurred costs and the reasonableness of the fixed fee. Transparency is limited due to the sole-source nature, but contract modifications and performance reports would be subject to internal review.

Related Government Programs

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

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 $38.4 million to RAYTHEON COMPANY. ENGINEERING SERVICES AND SUPPORT FOR THE ADVANCED SYNTHETIC APERTURE RADAR SYSTEM (ASARS-2) SENSOR (AIR 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 $38.4 million.

What is the period of performance?

Start: 2021-11-01. End: 2024-02-29.

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

The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the need for specialized expertise that only one contractor can provide. For the ASARS-2 system, Raytheon, as the likely developer or a key integrator, may possess unique knowledge, tooling, or intellectual property essential for its continued engineering support and sustainment. Without this specific justification document, it's presumed that the Air Force determined that competition was not feasible or not in the government's best interest at the time of award, possibly due to the system's complexity, proprietary nature, or the need for continuity of support from the original manufacturer.

How does the cost-plus-fixed-fee (CPFF) contract type influence cost control and contractor incentives for this ASARS-2 engineering support?

A Cost-Plus-Fixed-Fee (CPFF) contract reimburses the contractor for allowable costs incurred plus a predetermined fixed fee representing profit. This structure incentivizes the contractor to complete the work efficiently to maximize their profit margin, as the fee is fixed regardless of the final cost. However, it also requires robust government oversight to scrutinize incurred costs, ensuring they are reasonable, allocable, and allowable. The government bears the risk of cost overruns beyond the estimated costs, while the contractor is motivated to control costs to protect their fixed fee. For specialized engineering services like ASARS-2 support, CPFF can be appropriate when the scope of work is not precisely defined or subject to change.

What is the historical spending trend for engineering services related to the ASARS-2 system?

Analyzing historical spending for ASARS-2 engineering services requires access to contract databases and specific procurement history. However, given that ASARS-2 is a mature system, spending on engineering support would likely fluctuate based on system upgrades, maintenance cycles, and operational tempo. If this $38.4 million contract covers a significant period (e.g., 2-3 years), it suggests a consistent need for sustainment and potential modernization. Without prior contract data, it's difficult to establish a precise trend, but sustained investment in such critical ISR assets is common for maintaining operational readiness and technological relevance.

What are the potential risks associated with relying on a single contractor for critical radar system engineering support?

The primary risks of sole-source reliance include potential price inflation due to lack of competition, reduced innovation if the contractor faces no pressure to improve services, and a loss of institutional knowledge within the government if the contractor's expertise is not effectively transferred. There's also a dependency risk; if the contractor experiences financial difficulties or strategic shifts, the government's ability to maintain the ASARS-2 system could be jeopardized. Furthermore, without competitive benchmarking, it's harder to ensure the government is receiving the best possible value and technological advancements.

How does this contract align with the Air Force's broader strategy for intelligence, surveillance, and reconnaissance (ISR) capabilities?

This contract directly supports the Air Force's ISR strategy by ensuring the continued operational readiness and effectiveness of the ASARS-2 sensor system. ASARS-2 provides crucial synthetic aperture radar imagery, which is vital for various ISR missions, including target detection, reconnaissance, and battle damage assessment. Maintaining and enhancing such capabilities is fundamental to the Air Force's ability to project power, gather intelligence, and support joint military operations. Investment in the engineering support for these systems underscores their ongoing importance in a complex threat environment.

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: 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: $38,362,505

Exercised Options: $38,362,505

Current Obligation: $38,362,505

Subaward Activity

Number of Subawards: 31

Total Subaward Amount: $8,223,351

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