DoD Awards $9.8M for MQ-9 Contractor Logistics, Lacking Competition

Contract Overview

Contract Amount: $9,798,910 ($9.8M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2025-11-07

End Date: 2026-11-01

Contract Duration: 359 days

Daily Burn Rate: $27.3K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: FY26 MQ-9 MTS-B CONTRACTOR LOGISTICS SERVICES

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75071

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $9.8 million to RAYTHEON COMPANY for work described as: FY26 MQ-9 MTS-B CONTRACTOR LOGISTICS SERVICES Key points: 1. Significant contract value of $9.8 million for essential MQ-9 logistics. 2. Sole-source award to Raytheon Company raises concerns about price discovery. 3. Potential for higher costs due to lack of competitive bidding. 4. Focus on critical ISR capabilities highlights the importance of reliable support.

Value Assessment

Rating: questionable

The contract is a sole-source award, making a direct pricing comparison difficult. Without competition, it's hard to assess if the $9.8 million represents a fair market value for the services provided.

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 limits price discovery and potentially leads to higher costs for taxpayers as there is no competitive pressure to lower bids.

Taxpayer Impact: The lack of competition may result in the government paying a premium for these logistics services, impacting taxpayer funds.

Public Impact

Ensures continued operational readiness of vital MQ-9 Reaper aircraft. Supports intelligence, surveillance, and reconnaissance (ISR) missions critical to national security. Potential for increased costs impacts overall defense budget allocation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

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

Positive Signals

Supports critical ISR assets
Ensures operational readiness

Sector Analysis

This contract falls within the aerospace and defense sector, specifically supporting unmanned aerial vehicle (UAV) operations. Spending benchmarks for contractor logistics support for similar platforms can vary widely based on system complexity and service scope.

Small Business Impact

This award does not appear to involve small businesses, as it is a sole-source contract with a large prime contractor, Raytheon Company. Further analysis would be needed to determine if any subcontracting opportunities exist for small businesses.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny from oversight bodies to ensure the government is receiving the best possible value. Transparency in the justification for not competing the contract is crucial.

Related Government Programs

Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Sole-source award limits competition.
Cost-plus contract type shifts cost risk to government.
Potential for inflated pricing due to lack of competitive pressure.
Lack of transparency regarding justification for sole-source award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $9.8 million to RAYTHEON COMPANY. FY26 MQ-9 MTS-B CONTRACTOR LOGISTICS SERVICES

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 $9.8 million.

What is the period of performance?

Start: 2025-11-07. End: 2026-11-01.

What is the justification for awarding this contract on a sole-source basis instead of through full and open competition?

The justification for a sole-source award typically centers on unique capabilities, proprietary technology, or the need for specialized expertise that only one contractor can provide. For critical systems like the MQ-9, there might be arguments related to maintaining operational continuity and avoiding costly transitions. However, the specific rationale needs to be clearly documented and publicly accessible to ensure accountability.

How does the cost-plus fixed fee (CPFF) contract type impact the overall cost and risk for the government?

A Cost-Plus Fixed Fee (CPFF) contract allows the contractor to recover all allowable costs plus a predetermined fixed fee. While it incentivizes the contractor to complete the work, it shifts significant cost risk to the government. If costs escalate beyond initial estimates, the government bears the burden, especially without strong cost controls and oversight, potentially leading to higher-than-expected expenditures.

What are the long-term implications of relying on sole-source contracts for essential logistics support for major weapon systems?

Long-term reliance on sole-source contracts can stifle innovation and competition within the defense industrial base. It may lead to vendor lock-in, reduced bargaining power for the government, and potentially higher sustainment costs over the weapon system's lifecycle. This can also limit opportunities for emerging technologies and smaller, innovative companies to enter the market.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

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: 2501 W UNIVERSITY DR, MCKINNEY, TX, 75071

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: $21,653,151

Exercised Options: $21,653,151

Current Obligation: $9,798,910

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA857726D0001

IDV Type: IDC

Timeline