DoD's $24.5M IGF AIRS Phase 2 Program awarded to Raytheon Company for R&D services

Contract Overview

Contract Amount: $24,528,332 ($24.5M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2015-09-29

End Date: 2020-11-30

Contract Duration: 1,889 days

Daily Burn Rate: $13.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: IGF::OT::IGF AIRS PHASE 2 PROGRAM

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $24.5 million to RAYTHEON COMPANY for work described as: IGF::OT::IGF AIRS PHASE 2 PROGRAM Key points: 1. Contract awarded for research and development in physical, engineering, and life sciences. 2. Raytheon Company, a major defense contractor, secured this definitive contract. 3. The contract was awarded under full and open competition. 4. Services were delivered over approximately 63 months. 5. The contract type is Cost Plus Fixed Fee, indicating potential for cost overruns. 6. This award falls under the Research and Development sector, specifically NAICS 541712.

Value Assessment

Rating: fair

Benchmarking the value of this specific R&D contract is challenging due to its specialized nature and the inherent uncertainties in research outcomes. The Cost Plus Fixed Fee (CPFF) structure means the government pays the contractor's costs plus a fixed fee, which can sometimes lead to higher overall costs compared to fixed-price contracts if costs are not well-managed. Without detailed cost breakdowns and performance metrics, a precise value-for-money assessment is difficult. However, the presence of competition suggests a degree of market validation for the pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 3 bidders suggests a reasonable level of competition for this specialized R&D requirement. While not a large number, it provides some basis for price discovery and ensures that the government is not limited to a single provider.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and innovative solutions, preventing potential price gouging from a sole-source provider.

Public Impact

The primary beneficiary is the Department of Defense, which receives advanced research and development capabilities. The services delivered are likely to enhance military technology and operational effectiveness. The contract's geographic impact is centered in California, where the contractor is located. This contract supports highly skilled research and development professionals within the defense industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize higher spending if not closely monitored.
The specialized nature of R&D makes it difficult to benchmark performance and cost-effectiveness.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process.
Raytheon Company is a well-established defense contractor with a track record in R&D.
The contract duration of over 5 years indicates a significant, long-term research effort.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically under NAICS code 541712 (Research and Development in the Physical, Engineering, and Life Sciences except Biotechnology). This sector is critical for technological advancement and national security, often involving significant investment and long development cycles. Comparable spending in this area can vary widely depending on the specific research focus and agency.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large definitive contract awarded to a major prime contractor, Raytheon Company, the primary impact on small businesses would likely be through subcontracting opportunities. The extent of small business participation would depend on Raytheon's subcontracting plan and adherence to it.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Transparency is generally maintained through contract reporting mechanisms, though specific R&D details might be sensitive. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Research and Development Programs
Advanced Technology Development Contracts
Raytheon Company Defense Contracts

Risk Flags

Cost Plus Fixed Fee contract type carries inherent risk of cost overruns.
R&D contracts are subject to technical uncertainties and performance risks.
Limited number of bidders (3) may indicate a niche market or high barriers to entry.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.5 million to RAYTHEON COMPANY. IGF::OT::IGF AIRS PHASE 2 PROGRAM

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 $24.5 million.

What is the period of performance?

Start: 2015-09-29. End: 2020-11-30.

What is Raytheon Company's track record with similar R&D contracts for the Department of Defense?

Raytheon Company, now part of RTX, has a long and extensive history of performing research and development contracts for the Department of Defense across various domains, including aerospace, defense systems, and advanced technologies. They are a prime contractor on numerous large-scale programs. Their track record generally includes successful delivery of complex technological solutions, though like any large contractor, they have also faced scrutiny on specific projects regarding cost, schedule, and performance. For R&D specifically, their experience spans foundational research to applied engineering, often involving significant innovation and intellectual property generation. Detailed performance reviews for individual contracts would be necessary for a comprehensive assessment.

How does the $24.5 million award compare to other R&D contracts in the physical, engineering, and life sciences sector?

The $24.5 million award for IGF AIRS PHASE 2 PROGRAM is a moderate-sized contract within the broader R&D sector. Large defense R&D programs can range from tens of millions to billions of dollars. Contracts for basic research might be smaller, while those for developing complex weapon systems or advanced materials can be significantly larger. This specific award, falling under NAICS 541712, suggests a focus on applied research and development in engineering and physical sciences. Its value is substantial enough to indicate a significant project but not at the scale of major platform development programs. Benchmarking requires comparing it to contracts with similar objectives, durations, and technological complexities.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract, like the one awarded for IGF AIRS PHASE 2 PROGRAM, revolve around cost control and potential for cost overruns. In a CPFF structure, the government reimburses the contractor for allowable costs incurred and pays a predetermined fixed fee. While the fee is fixed, the total cost is not. If the contractor's costs exceed initial estimates, the government bears the burden of these increased costs, up to the contract's ceiling. This can lead to the final price being higher than anticipated. For R&D, where technical challenges and unknowns are inherent, cost estimation is particularly difficult, increasing the risk of cost escalation. Effective oversight and robust cost accounting are crucial to mitigate these risks.

What does the 'IGF AIRS PHASE 2 PROGRAM' likely entail in terms of research objectives?

While the specific details of 'IGF AIRS PHASE 2 PROGRAM' are not fully elaborated in the provided data, the designation suggests a follow-on effort ('Phase 2') related to an 'IGF AIRS' initiative. 'IGF' could potentially stand for 'Integrated Ground Forces' or a similar defense-related acronym, and 'AIRS' might relate to 'Airborne' or 'Automated' systems, or 'Intelligence, Surveillance, and Reconnaissance'. Given the NAICS code 541712 (Research and Development in the Physical, Engineering, and Life Sciences except Biotechnology) and the awarding agency (Department of Defense), the program likely focuses on developing or enhancing technologies related to defense capabilities, potentially involving advanced sensors, data processing, communication systems, or autonomous platforms. Phase 2 typically implies building upon initial research or prototypes developed in a prior phase.

How has spending on R&D contracts like this evolved within the Department of Defense over the past decade?

Spending on R&D contracts within the Department of Defense (DoD) has generally remained a significant portion of its overall budget, reflecting a continuous need for technological superiority. Over the past decade, there has been a notable shift towards prioritizing areas such as artificial intelligence, cyber security, space technology, hypersonics, and advanced manufacturing. While traditional R&D spending continues, there's an increasing emphasis on rapid prototyping, agile development, and transitioning technologies from lab to fielded systems. Contracts like the IGF AIRS PHASE 2 PROGRAM, focusing on physical and engineering sciences, are part of this ongoing investment. Budgetary pressures and evolving geopolitical landscapes influence the specific allocation of R&D funds year over year, but the strategic importance of R&D remains constant for the DoD.

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: 3

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: $24,528,332

Exercised Options: $24,528,332

Current Obligation: $24,528,332

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline