Air Force awards $64.3M for F-15EX radar, Raytheon Company secures sole-source contract

Contract Overview

Contract Amount: $64,349,824 ($64.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2022-09-13

End Date: 2025-09-30

Contract Duration: 1,113 days

Daily Burn Rate: $57.8K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: F-15EX LOT 3 RADAR PROCUREMENT AND SPARES

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $64.3 million to RAYTHEON COMPANY for work described as: F-15EX LOT 3 RADAR PROCUREMENT AND SPARES Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. The contract is for a significant upgrade to F-15EX aircraft radar systems. 3. Performance period extends over three years, indicating a long-term need. 4. The fixed-price contract type shifts cost risk to the contractor. 5. This procurement is part of a larger modernization effort for the F-15 fleet. 6. No small business set-aside was applied to this procurement.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source contract is challenging due to the lack of competitive bids. The total award amount of $64.3 million for radar procurement and spares suggests a substantial investment in advanced avionics. Without comparable contract data or market research, it's difficult to definitively assess if the pricing is optimal. However, the firm-fixed-price structure aims to control costs for the government, provided the initial pricing was reasonable.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning only one vendor, Raytheon Company, was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple companies vying for the contract. While sole-source awards can be necessary for specialized or proprietary technologies, they reduce the potential for price discovery and may lead to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive pressure to drive down prices. The lack of competition also limits opportunities for other capable firms to enter the market and potentially offer more cost-effective solutions.

Public Impact

The primary beneficiaries are the U.S. Air Force and its F-15EX fighter jet program. The contract delivers advanced radar systems and necessary spare parts for operational readiness. This procurement supports the modernization of a key component of the U.S. air combat capability. The contract has implications for the aerospace and defense industry, particularly in radar technology development and manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases cost to taxpayers.
Lack of transparency in the sole-source justification process.
Potential for cost overruns if initial pricing is not thoroughly vetted.
Reliance on a single supplier for critical radar technology.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor.
Procurement supports modernization of a critical Air Force asset (F-15EX).
Awarded to a known contractor with existing expertise in radar systems.
Long-term performance period allows for sustained support and development.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on avionics and radar systems manufacturing. The market for advanced military radar is dominated by a few large, established defense contractors. The F-15EX program represents a significant investment in maintaining and modernizing the U.S. Air Force's tactical fighter fleet. Comparable spending benchmarks for advanced radar systems can vary widely based on technological sophistication and quantity, but multi-million dollar awards for such critical components are common.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses for specific components or services. Further investigation into subcontracting plans would be needed to fully assess the impact.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Air Force and the Department of Defense. Given the sole-source nature, scrutiny may focus on the justification for not competing the award and the reasonableness of the price. Transparency is limited by the lack of a competitive process. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

F-15EX Program
Air Force Avionics Modernization
Defense Radar Systems Procurement
Aerospace Manufacturing Contracts

Risk Flags

Sole-source award may limit cost savings.
Potential for cost growth if initial estimates are inaccurate.
Integration risks with existing F-15EX systems.
Long-term reliance on a single supplier for critical technology.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $64.3 million to RAYTHEON COMPANY. F-15EX LOT 3 RADAR PROCUREMENT AND SPARES

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 $64.3 million.

What is the period of performance?

Start: 2022-09-13. End: 2025-09-30.

What is the specific justification for awarding this contract on a sole-source basis to Raytheon Company?

The provided data indicates the contract was awarded as 'NOT COMPETED'. Typically, sole-source justifications are based on factors such as the unique capability of a single contractor, the proprietary nature of the technology, urgent and compelling needs where competition is not feasible, or if the contract is a follow-on to a previously competed effort where only one contractor can provide the necessary integration. For this specific F-15EX radar procurement, the justification likely stems from Raytheon's established role in developing and manufacturing advanced radar systems, potentially including proprietary technology or integration challenges with the F-15EX platform that make competition impractical or excessively costly. A detailed review of the official sole-source justification document would be required for definitive confirmation.

How does the $64.3 million award compare to previous F-15 radar procurements or similar defense avionics contracts?

Direct comparison of the $64.3 million award for the F-15EX LOT 3 RADAR PROCUREMENT AND SPARES to previous F-15 radar procurements is difficult without specific historical data on similar lots or configurations. However, the F-15EX is a modern variant, implying potentially more advanced and costly radar technology than older F-15 models. In the broader defense avionics market, awards in the tens of millions for complex systems like advanced radars, including initial procurement and spares, are not uncommon. For instance, similar radar system upgrades for other fighter platforms (e.g., F-16, F/A-18) have also resulted in contracts valued in the tens to hundreds of millions of dollars, depending on the scope, technology, and number of units. The firm-fixed-price nature suggests an effort to cap costs, but the baseline price itself requires benchmarking against market rates for comparable technology.

What are the key performance risks associated with this radar procurement and spares contract?

Key performance risks for this radar procurement and spares contract include potential technical challenges in integrating the new radar system with the F-15EX platform, especially if it involves significant software or hardware modifications. Schedule delays are a common risk in complex defense procurements, which could impact the operational readiness of the F-15EX fleet. Given the sole-source nature, there's a risk of cost overruns if the initial pricing is not adequately scrutinized or if unforeseen development issues arise. Furthermore, the availability and lead time for specialized spare parts could pose a logistical risk, potentially impacting aircraft availability if not managed effectively. Finally, ensuring the radar system meets all specified performance requirements under various operational conditions is a critical performance risk.

What is the expected impact of this contract on the F-15EX program's overall modernization timeline?

This contract for the F-15EX LOT 3 RADAR PROCUREMENT AND SPARES is crucial for the F-15EX program's modernization timeline. The radar system is a core component of a fighter aircraft's combat capability, enabling target detection, tracking, and engagement. By awarding this contract, the Air Force is ensuring that the F-15EX fleet will be equipped with advanced sensor technology, enhancing its effectiveness in contested environments. The performance period extending to September 2025 suggests that the delivery and integration of these radars are planned to align with the broader rollout and operationalization schedule of the F-15EX fleet. Timely delivery of these radars is essential to avoid delays in achieving full operational capability for the modernized F-15EX aircraft.

How does the firm-fixed-price (FFP) contract type influence cost management and contractor incentives?

The firm-fixed-price (FFP) contract type is generally favored by the government for cost control because it shifts the majority of the cost risk to the contractor. Under an FFP agreement, the contractor is obligated to complete the work for a predetermined price, regardless of their actual costs. This incentivizes the contractor to manage their expenses efficiently and to avoid cost overruns, as any excess costs would reduce their profit margin. For the government, it provides budget certainty. However, the success of FFP in managing costs heavily relies on the accuracy of the initial price negotiation. If the baseline price is set too high, the government may overpay. Conversely, if set too low, the contractor might be tempted to cut corners on quality or performance, although contract specifications and oversight aim to mitigate this.

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: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

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: $64,349,824

Exercised Options: $64,349,824

Current Obligation: $64,349,824

Subaward Activity

Number of Subawards: 35

Total Subaward Amount: $5,503,497

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA863421D2707

IDV Type: IDC

Timeline