DoD Awards Raytheon $38M for ASARS-2 Sensor Support, Raising Oversight Concerns

Contract Overview

Contract Amount: $38,034,743 ($38.0M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2022-11-01

End Date: 2024-10-25

Contract Duration: 724 days

Daily Burn Rate: $52.5K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 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 $38.0 million to RAYTHEON COMPANY for work described as: SERVICES AND SUPPORT FOR THE ADVANCED SYNTHETIC APERTURE RADAR SYSTEM (ASARS-2) SENSOR (AIR SUPPORT). Key points: 1. Significant contract value for specialized sensor support. 2. Sole-source award to Raytheon Company limits competitive pricing. 3. Potential for cost overruns due to Cost Plus Fixed Fee structure. 4. Focus on advanced radar systems highlights critical defense technology.

Value Assessment

Rating: questionable

The $38 million contract for ASARS-2 sensor support is a substantial investment. Without competitive bidding, it's difficult to assess if the pricing is optimal compared to potential market alternatives. The Cost Plus Fixed Fee structure warrants close monitoring for efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Raytheon Company. This lack of competition limits price discovery and may result in higher costs for the government compared to a fully competed scenario.

Taxpayer Impact: Taxpayer funds are being utilized for specialized defense support services without the benefit of competitive pricing, potentially leading to a less efficient allocation of resources.

Public Impact

Advanced military sensor technology maintenance ensures operational readiness. Sole-source nature of the contract raises questions about cost-effectiveness for taxpayers. Long-term support contract highlights reliance on specific vendor capabilities. Potential impact on future competition for similar advanced system support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of competition

Positive Signals

Supports critical defense technology (ASARS-2)
Long-term contract duration

Sector Analysis

This contract falls within Engineering Services for the defense sector, specifically supporting advanced radar systems. Spending benchmarks for specialized defense engineering services can vary widely based on technology complexity and vendor capabilities.

Small Business Impact

The contract data does not indicate any specific provisions or set-asides for small businesses. The award to Raytheon Company, a large defense contractor, suggests limited direct opportunities for small businesses on this particular contract.

Oversight & Accountability

The sole-source nature of this award necessitates robust oversight to ensure cost control and performance. The Department of Defense should actively monitor expenditures and contractor performance to mitigate risks associated with non-competitive contracts.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Sole-source award limits price competition.
Cost Plus Fixed Fee structure can lead to cost overruns.
Lack of transparency in pricing due to non-competitive nature.
Potential for vendor lock-in with specialized technology.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.0 million to RAYTHEON COMPANY. 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 $38.0 million.

What is the period of performance?

Start: 2022-11-01. End: 2024-10-25.

What is the justification for the sole-source award, and has a market research report been conducted to confirm the necessity of this approach?

The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent requirements where only one vendor can meet the need. A thorough market research report is crucial to validate these claims and explore any potential for competition, even if limited. Without this, the government risks overpaying and missing opportunities for innovation.

How will the Cost Plus Fixed Fee structure be managed to prevent cost overruns and ensure value for money?

Managing a Cost Plus Fixed Fee (CPFF) contract requires stringent oversight. The government must establish clear performance metrics, conduct regular audits of incurred costs, and negotiate the fixed fee carefully based on realistic projections. Continuous communication and proactive risk management are essential to control costs and ensure the contractor remains incentivized to perform efficiently.

What is the long-term strategy for ASARS-2 sensor support to foster competition and reduce reliance on a single provider?

A long-term strategy should involve phased acquisition planning, encouraging technology maturation, and potentially breaking down future requirements into smaller, more competitive packages. Investing in organic government capabilities or fostering partnerships with other vendors could also reduce sole-source dependency. Regular market analysis and engagement are key to identifying future competitive opportunities.

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: $39,428,231

Exercised Options: $39,428,231

Current Obligation: $38,034,743

Subaward Activity

Number of Subawards: 21

Total Subaward Amount: $1,928,936

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