DoD's $39.6M BIG SAFARI contract awarded to Raytheon Company for aircraft parts shows concerning value
Contract Overview
Contract Amount: $39,569,495 ($39.6M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2017-10-26
End Date: 2022-02-28
Contract Duration: 1,586 days
Daily Burn Rate: $24.9K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: ACAT III BIG SAFARI
Place of Performance
Location: MCKINNEY, COLLIN County, TEXAS, 75071
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $39.6 million to RAYTHEON COMPANY for work described as: ACAT III BIG SAFARI Key points: 1. The contract value of $39.6 million is significant for ACAT III. 2. Raytheon Company is a major defense contractor, indicating potential for established relationships. 3. The 'NOT COMPETED' award raises concerns about price discovery and potential overpayment. 4. The sector is 'Other Aircraft Parts and Auxiliary Equipment Manufacturing', a specialized area.
Value Assessment
Rating: concerning
The contract's value of $39.6 million for ACAT III without competition raises significant concerns about whether a fair price was achieved. Benchmarking is difficult without comparable contracts, but the lack of competition suggests potential for inflated costs.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source or limited competition award. This significantly hinders price discovery and may lead to higher costs for taxpayers as there was no market pressure to offer the best price.
Taxpayer Impact: The lack of competition likely resulted in higher costs for taxpayers compared to a fully competed contract.
Public Impact
Taxpayers may have overpaid due to the absence of competitive bidding. The reliance on a single source for these aircraft parts could create future dependency. The specific nature of 'BIG SAFARI' suggests specialized equipment, potentially limiting alternative suppliers.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for overpayment
- Sole-source award
Positive Signals
- Awarded to a known defense contractor
- Firm Fixed Price contract type can provide cost certainty if priced correctly
Sector Analysis
The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector is critical for defense readiness. Spending benchmarks in this niche can vary widely based on technological complexity and proprietary nature of the parts. Without competition, it's hard to assess if this $39.6M aligns with industry norms.
Small Business Impact
The awardee is Raytheon Company, a large business. There is no indication that small businesses were involved in this specific contract, either as prime contractors or subcontractors.
Oversight & Accountability
The 'NOT COMPETED' status warrants further oversight to ensure the justification for sole-source procurement was valid and that the price was fair and reasonable. Accountability for the lack of competition needs to be established.
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 inflated pricing
- Sole-source award
- Limited transparency on justification
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, tx, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $39.6 million to RAYTHEON COMPANY. ACAT III BIG SAFARI
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 $39.6 million.
What is the period of performance?
Start: 2017-10-26. End: 2022-02-28.
What was the specific justification for not competing this contract, and was it adequately documented?
The justification for not competing this contract is crucial for understanding the procurement strategy. Agencies typically require detailed documentation outlining why competition was not feasible, such as the existence of a unique capability, urgent need, or lack of qualified sources. Without this information, it's impossible to assess the validity of the sole-source decision and its impact on value for money.
How does the unit cost of the 'BIG SAFARI' components compare to similar, albeit potentially less specialized, aircraft parts?
Comparing the unit cost of 'BIG SAFARI' components to similar parts is challenging due to the specialized nature of the program. However, a thorough analysis would involve identifying comparable systems or components, adjusting for differences in complexity and performance, and then evaluating the price. If the unit cost remains significantly higher even after adjustments, it suggests potential overpricing due to the lack of competition.
What is the long-term strategic risk associated with a sole-source award for critical aircraft parts like those under the BIG SAFARI program?
The long-term strategic risk of a sole-source award for critical aircraft parts includes potential vendor lock-in, reduced innovation, and vulnerability to supply chain disruptions if the sole provider faces issues. It can also lead to escalating costs over time as competition is absent. Agencies should have plans to mitigate these risks, such as seeking alternative sources or developing in-house capabilities where feasible.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: RTX Corp
Address: 2501 W UNIVERSITY DR, MCKINNEY, TX, 75070
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: $39,569,495
Exercised Options: $39,569,495
Current Obligation: $39,569,495
Actual Outlays: $133,443
Subaward Activity
Number of Subawards: 17
Total Subaward Amount: $3,099,571
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA862016G3019
IDV Type: BOA
Timeline
Start Date: 2017-10-26
Current End Date: 2022-02-28
Potential End Date: 2022-02-28 00:00:00
Last Modified: 2022-10-28
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