DoD Awards $42.9M Raytheon Contract for ASARS 2B/2C Phase I Engineering Services

Contract Overview

Contract Amount: $42,869,337 ($42.9M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2013-09-30

End Date: 2017-02-28

Contract Duration: 1,247 days

Daily Burn Rate: $34.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF ASARS 2B/2C PHASE I

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $42.9 million to RAYTHEON COMPANY for work described as: IGF::OT::IGF ASARS 2B/2C PHASE I Key points: 1. Significant contract value for a specific phase of a defense program. 2. Sole-source award to Raytheon Company, a major defense contractor. 3. Potential for cost overruns given the Cost Plus Fixed Fee (CPFF) contract type. 4. Engineering services sector, crucial for defense system development.

Value Assessment

Rating: questionable

The contract value of $42.9 million for engineering services is substantial. Without specific benchmarks for ASARS development phases, it's difficult to definitively assess value. The CPFF structure can lead to higher costs if not managed tightly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Raytheon. This limits price discovery and potentially leads to higher costs compared to a competitive environment. The rationale for sole-sourcing should be clearly documented.

Taxpayer Impact: Taxpayer funds are committed without competitive bidding, potentially resulting in a less optimal price for the services rendered.

Public Impact

Impacts the development of advanced sensor systems for the Air Force. Supports a major defense contractor and its supply chain. Highlights the significant investment in intelligence, surveillance, and reconnaissance (ISR) capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
Cost Plus Fixed Fee contract type carries inherent cost escalation risks.
Long contract duration (1247 days) increases exposure to potential issues.

Positive Signals

Contract supports critical defense technology development.
Award to an established prime contractor with relevant expertise.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense systems. Spending in this area is critical for maintaining technological superiority but requires careful oversight to ensure cost-effectiveness.

Small Business Impact

The contract was awarded to Raytheon Company, a large business. There is no indication of small business participation in this specific award.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure fair pricing and effective execution. The Air Force must ensure robust contract management to mitigate risks associated with the CPFF structure.

Related Government Programs

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

Risk Flags

Lack of competition
Cost Plus Fixed Fee contract type
Potential for cost overruns
Long contract duration
Limited transparency on sole-source justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.9 million to RAYTHEON COMPANY. IGF::OT::IGF ASARS 2B/2C PHASE I

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 $42.9 million.

What is the period of performance?

Start: 2013-09-30. End: 2017-02-28.

What was the justification for the sole-source award, and were alternative solutions considered?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. For this ASARS contract, the Air Force likely cited Raytheon's specific expertise and existing knowledge of the system. However, a thorough review should confirm that alternatives were indeed explored and deemed unsuitable, ensuring the best value was sought despite the lack of competition.

How effectively was the Cost Plus Fixed Fee structure managed to control costs?

The CPFF structure allows the contractor to recover all allowable costs plus a fixed fee. Effective management requires stringent oversight of incurred costs, clear definition of scope, and performance metrics. Without detailed cost performance reports, it's difficult to assess if Raytheon operated efficiently within the fee structure or if costs escalated beyond reasonable expectations, potentially impacting overall value for the taxpayer.

What is the long-term strategic value of the ASARS 2B/2C system, and does this phase align with that vision?

The ASARS (Advanced Synthetic Aperture Radar System) is crucial for intelligence, surveillance, and reconnaissance (ISR). Phase I likely focused on foundational development or specific component testing. The strategic value lies in enhancing the Air Force's ability to gather critical battlefield information. Alignment with the overall vision depends on the successful completion of this phase and its integration into the broader ISR architecture, contributing to operational effectiveness.

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

Offers Received: 1

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: $42,880,318

Exercised Options: $42,880,318

Current Obligation: $42,869,337

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline