DoD Awards Raytheon $31.1M for ASARS Sustainment, Lacking Competition

Contract Overview

Contract Amount: $31,104,324 ($31.1M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2025-05-01

End Date: 2026-03-31

Contract Duration: 334 days

Daily Burn Rate: $93.1K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ASARS FY25 5-MONTH SUSTAINMENT ORDER (AIR AND GROUND)

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $31.1 million to RAYTHEON COMPANY for work described as: ASARS FY25 5-MONTH SUSTAINMENT ORDER (AIR AND GROUND) Key points: 1. Significant award for critical Air Force aviation sustainment. 2. Sole-source award raises concerns about price discovery and value. 3. Engineering services sector sees substantial contract value. 4. Potential for taxpayer savings through competitive bidding.

Value Assessment

Rating: questionable

The contract is a Cost Plus Fixed Fee (CPFF) type, which can lead to higher costs if not managed carefully. Without competitive benchmarking, it's difficult to assess if the $31.1M award represents fair value for the 5-month sustainment period.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for the government compared to a competitive environment.

Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for these essential engineering services.

Public Impact

Ensures continued operational readiness for Air Force aviation assets. Supports critical engineering services for advanced sensor systems. Potential for increased costs due to sole-source nature.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Lack of competition

Positive Signals

Essential sustainment for critical assets
Supports Air Force readiness

Sector Analysis

This contract falls within the Engineering Services sector, which is crucial for maintaining complex defense systems. The award value of $31.1M for a 5-month period is substantial, highlighting the cost of specialized technical support.

Small Business Impact

The data indicates this contract was not awarded to a small business. Further analysis would be needed to determine if small businesses were considered or had the capability to compete.

Oversight & Accountability

Oversight is crucial for CPFF contracts to ensure costs are reasonable and allocable. The sole-source nature necessitates robust government oversight to prevent cost overruns and ensure effective service delivery.

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 contract type may incentivize higher spending.
Lack of transparency on specific sustainment tasks.
Potential for vendor lock-in.
No indication of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.1 million to RAYTHEON COMPANY. ASARS FY25 5-MONTH SUSTAINMENT ORDER (AIR AND GROUND)

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 $31.1 million.

What is the period of performance?

Start: 2025-05-01. End: 2026-03-31.

What is the historical cost performance for ASARS sustainment, and how does this award compare?

Without historical cost data or details on the specific sustainment tasks, a direct comparison is challenging. However, the sole-source nature of this $31.1M award for a 5-month period suggests a potentially higher cost than if it had been competitively bid. Future analysis should seek historical data and benchmark against similar sustainment contracts to assess value.

What are the specific risks associated with a sole-source award for critical sustainment services?

The primary risk is the lack of price competition, which can lead to inflated costs for taxpayers. Additionally, a sole-source award might reduce the incentive for the contractor to innovate or improve efficiency. There's also a risk of vendor lock-in, making it difficult to switch providers in the future without significant disruption or cost.

How effective is the current sustainment strategy in ensuring long-term operational readiness for the ASARS system?

The effectiveness hinges on the quality and timeliness of Raytheon's services under this contract. While the award ensures immediate sustainment, the long-term effectiveness depends on the contractor's performance, the government's oversight, and whether this sole-source approach hinders the adoption of more cost-effective or technologically advanced sustainment solutions over time.

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: $33,718,970

Exercised Options: $33,718,970

Current Obligation: $31,104,324

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