DoD's $94.5M Raytheon Processor Upgrade Contract Raises Concerns Over Competition and Value
Contract Overview
Contract Amount: $94,551,775 ($94.6M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2024-12-16
End Date: 2027-09-27
Contract Duration: 1,015 days
Daily Burn Rate: $93.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Official Description: PROCESSOR UPGRADE FOR MISSION ALLIANCE (PUMA) RISK REDUCTION
Place of Performance
Location: TUCSON, PIMA County, ARIZONA, 85756
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $94.6 million to RAYTHEON COMPANY for work described as: PROCESSOR UPGRADE FOR MISSION ALLIANCE (PUMA) RISK REDUCTION Key points: 1. Contract awarded to Raytheon Company for processor upgrades. 2. Significant value of $94.5 million for mission alliance risk reduction. 3. Lack of competition raises questions about price discovery and potential overspending. 4. The sector is 'Other Aircraft Parts and Auxiliary Equipment Manufacturing'.
Value Assessment
Rating: questionable
The contract type is Cost Plus Fixed Fee, which can lead to higher costs if not managed carefully. Without competitive bidding, it's difficult to benchmark pricing against similar contracts to ensure value for money.
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 may result in higher costs for taxpayers as there is no market pressure to offer the best price.
Taxpayer Impact: The lack of competition for this $94.5 million contract means taxpayers may be paying a premium, as the government did not explore potentially lower-cost alternatives.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. The sole-source nature of the contract limits transparency in pricing. Potential for cost overruns given the Cost Plus Fixed Fee structure.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Lack of clear justification for sole-source
Positive Signals
- Addresses critical mission risk reduction
- Long-term contract duration allows for stability
Sector Analysis
This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector. Spending in this area is crucial for maintaining military readiness, but competitive procurement is vital to ensure cost-effectiveness.
Small Business Impact
The data does not indicate any specific provisions or considerations for small businesses in this sole-source contract award.
Oversight & Accountability
The sole-source nature of this contract warrants close oversight to ensure costs are reasonable and the work performed is essential and efficiently executed. Robust auditing of the Cost Plus Fixed Fee elements is critical.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competition
- Potential for cost overruns (CPFF)
- Limited transparency on pricing
- No clear small business participation
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, az, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $94.6 million to RAYTHEON COMPANY. PROCESSOR UPGRADE FOR MISSION ALLIANCE (PUMA) RISK REDUCTION
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 $94.6 million.
What is the period of performance?
Start: 2024-12-16. End: 2027-09-27.
What is the justification for awarding this processor upgrade contract on a sole-source basis, and were alternative solutions or vendors considered?
The provided data indicates the contract was 'NOT COMPETED' and is a 'SOLE-SOURCE' award. A thorough justification for this approach should be publicly available, detailing why competition was not feasible or advantageous. Without this, it's difficult to assess if the government explored all avenues to secure the best value and pricing for this significant investment.
How will the Cost Plus Fixed Fee structure be managed to mitigate the risk of cost overruns and ensure fair pricing for the government?
The Cost Plus Fixed Fee (CPFF) contract type requires diligent oversight to control costs. The Department of Defense must implement rigorous monitoring, auditing, and reporting mechanisms to ensure that all costs incurred are reasonable, allocable, and allowable. The fixed fee component should be carefully negotiated and reviewed to ensure it reflects the contractor's effort and risk.
What are the specific performance metrics and deliverables for this processor upgrade, and how will their successful completion be measured to ensure effectiveness?
While the contract aims for 'RISK REDUCTION' for the 'MISSION ALLIANCE (PUMA)', specific performance metrics and deliverables are not detailed in the provided data. Establishing clear, measurable, achievable, relevant, and time-bound (SMART) goals is crucial. The Air Force must have a robust system for tracking progress against these metrics to ensure the upgrade effectively enhances the mission capability and justifies the investment.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: FA855624R0100
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Rockwell Collins Australia PTY Limited
Address: 1151 E HERMANS RD, TUCSON, AZ, 85756
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: $94,551,775
Exercised Options: $94,551,775
Current Obligation: $94,551,775
Subaward Activity
Number of Subawards: 3
Total Subaward Amount: $1,567,136
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2024-12-16
Current End Date: 2027-09-27
Potential End Date: 2027-09-27 00:00:00
Last Modified: 2025-06-10
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