DoD's $48.3M PCAS Contract with Raytheon: R&D Spending in Arizona

Contract Overview

Contract Amount: $48,300,950 ($48.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2012-12-28

End Date: 2016-09-29

Contract Duration: 1,371 days

Daily Burn Rate: $35.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 37

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: PERSISTENT CLOSE AIR SUPPORT (PCAS)

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $48.3 million to RAYTHEON COMPANY for work described as: PERSISTENT CLOSE AIR SUPPORT (PCAS) Key points: 1. The contract awarded to Raytheon Company for Persistent Close Air Support (PCAS) totaled $48.3 million. 2. This contract falls under Research and Development in Physical, Engineering, and Life Sciences, excluding Biotechnology. 3. The contract was awarded under full and open competition, suggesting a competitive bidding process. 4. The contract duration was 1371 days, ending in September 2016. 5. The contract was a Cost Plus Fixed Fee type, indicating risk sharing between the government and contractor.

Value Assessment

Rating: fair

The contract type (Cost Plus Fixed Fee) allows for cost overruns, which can impact overall value. Without specific performance metrics or comparison data, assessing the value for money is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically leads to better price discovery and potentially lower costs for the government. The competitive nature should have driven a reasonable price.

Taxpayer Impact: The competitive award process likely ensured taxpayer funds were used efficiently, though the cost-plus nature warrants scrutiny for potential overruns.

Public Impact

This contract supported research and development in advanced defense technologies. The spending contributed to the defense industrial base within Arizona. The project aimed to enhance close air support capabilities for military operations. The duration of the contract suggests a significant R&D effort.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can lead to cost overruns.
Lack of specific performance metrics makes value assessment difficult.
Contract ended in 2016, making current relevance and cost benchmarks less applicable.

Positive Signals

Awarded under full and open competition.
Supported critical defense R&D.
Contracted with a major defense contractor.

Sector Analysis

This contract falls within the Research and Development sector, specifically for physical, engineering, and life sciences. Defense R&D spending can vary significantly year-to-year, but contracts of this size are common for developing new technologies.

Small Business Impact

The data indicates the contract was awarded to Raytheon Company, a large business. There is no explicit information on small business participation or subcontracting in the provided data.

Oversight & Accountability

The contract was managed by the Defense Contract Management Agency (DCMA), which is responsible for overseeing contract performance and ensuring compliance. Further oversight details are not provided.

Related Government Programs

Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Cost Plus Fixed Fee contract type.
Contract ended in 2016.
Lack of detailed performance metrics.
No explicit mention of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $48.3 million to RAYTHEON COMPANY. PERSISTENT CLOSE AIR SUPPORT (PCAS)

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $48.3 million.

What is the period of performance?

Start: 2012-12-28. End: 2016-09-29.

What were the specific R&D objectives of the PCAS program and how effectively were they met within the $48.3 million budget?

The Persistent Close Air Support (PCAS) program aimed to develop technologies for improved close air support, likely focusing on enhanced targeting, communication, and integration between ground forces and air assets. Without detailed performance reports or final project outcomes, it's difficult to definitively assess how effectively these objectives were met within the allocated budget. The Cost Plus Fixed Fee structure suggests that the government bore the risk of cost overruns, making budget adherence a key area for oversight.

Given the contract ended in 2016, what is the current relevance of its cost structure and outcomes for ongoing defense R&D investments?

Contracts ending in 2016 provide historical data that can inform current R&D investments by highlighting successful approaches or potential pitfalls. However, technology and market conditions evolve rapidly. The cost structure, particularly the Cost Plus Fixed Fee, might be less favored now for certain types of R&D compared to fixed-price incentives if clear performance metrics can be established. Lessons learned regarding contractor performance and oversight remain relevant, but direct cost comparisons require significant adjustment for inflation and technological advancements.

How did the full and open competition for this PCAS contract influence the final price and the quality of the R&D outcome?

Full and open competition generally fosters a more competitive bidding environment, which should theoretically drive down prices and encourage higher quality proposals. For this $48.3 million PCAS contract, the competitive process likely ensured that Raytheon's bid was among the most advantageous to the government. However, the Cost Plus Fixed Fee structure means that the ultimate cost is not fixed, so while the initial bid might have been competitive, the final expenditure could exceed initial estimates if R&D proved more complex or costly than anticipated.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Offers Received: 37

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

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: $48,300,950

Exercised Options: $48,300,950

Current Obligation: $48,300,950

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline