Raytheon Company awarded $20.6M for R&D in combat identification sensors by the Air Force

Contract Overview

Contract Amount: $20,636,977 ($20.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2018-12-19

End Date: 2026-05-20

Contract Duration: 2,709 days

Daily Burn Rate: $7.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: PRECISION REAL-TIME ENGAGEMENT COMBAT IDENTIFICATION SENSOR EXPLOITATION (PRECISE)

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $20.6 million to RAYTHEON COMPANY for work described as: PRECISION REAL-TIME ENGAGEMENT COMBAT IDENTIFICATION SENSOR EXPLOITATION (PRECISE) Key points: 1. Contract focuses on advanced research and development for physical and engineering sciences. 2. Competition was full and open, suggesting a potentially competitive bidding process. 3. Contract duration is substantial, spanning over 2700 days. 4. The contract type is Cost Plus Fixed Fee, which can present cost control challenges. 5. This award falls under the Research and Development category for physical sciences. 6. The primary agency is the Department of Defense, specifically the Air Force. 7. The contractor, Raytheon Company, is a major defense industry player.

Value Assessment

Rating: fair

The contract value of $20.6 million for a research and development effort over approximately 7.4 years appears moderate for a large defense contractor like Raytheon. Benchmarking this specific R&D effort is challenging without more granular details on the scope and deliverables. However, given the Cost Plus Fixed Fee structure, there is inherent risk of cost overruns if not managed tightly. The fixed fee component provides some predictability for the contractor's profit, but the overall cost to the government is variable.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With three bidders, the competition level suggests a degree of market interest, but it's not exceptionally high. This level of competition is generally favorable for price discovery, but the ultimate value depends on the specific technical requirements and the capabilities of the competing firms.

Taxpayer Impact: Full and open competition with multiple bidders is beneficial for taxpayers as it encourages competitive pricing and potentially leads to more innovative solutions at a better value. However, the effectiveness of this competition in driving down costs depends on the specific nature of the R&D and the uniqueness of the technologies involved.

Public Impact

The primary beneficiaries are the Department of the Air Force and potentially other branches of the Department of Defense, receiving advancements in combat identification sensor technology. The services delivered involve research and development in physical, engineering, and life sciences, specifically focused on sensor exploitation for combat identification. The geographic impact is primarily within California, where the contract is being performed. Workforce implications include employment opportunities for scientists, engineers, and technical staff at Raytheon and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not meticulously managed, as the government bears the majority of the cost risk.
The long duration of the contract (over 7 years) increases the potential for scope creep or evolving requirements that may not be optimally priced from the outset.
Limited public information on the specific R&D objectives makes it difficult to assess the true value and necessity of the investment.
Reliance on a single large contractor like Raytheon for critical R&D may limit opportunities for smaller, innovative firms in this specialized field.

Positive Signals

Awarded through full and open competition, indicating a potentially robust selection process.
The contract aims to advance critical defense technology, potentially enhancing national security.
Raytheon is a well-established defense contractor with a proven track record in complex R&D projects.
The contract duration allows for in-depth research and development, potentially leading to significant technological breakthroughs.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences, excluding nanotechnology and biotechnology. The North American Industry Classification System (NAICS) code 541715 categorizes this as 'Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)'. This is a significant area of government spending, particularly within the defense sector, aimed at maintaining technological superiority. Comparable spending benchmarks are difficult to establish without knowing the specific technological advancements sought, but R&D contracts of this nature can range from millions to billions of dollars depending on the complexity and strategic importance.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a primary set-aside criterion for this contract. This suggests that the primary focus was on securing the best technical solution from a qualified large business. There is no explicit information on subcontracting plans for small businesses, which could be a missed opportunity to leverage the innovative capacity of the small business ecosystem in specialized R&D areas.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of Defense's contracting and program management offices. Specific oversight mechanisms would include regular progress reviews, financial audits, and technical evaluations to ensure the contractor is meeting milestones and managing costs effectively. Transparency is often limited for R&D contracts due to the sensitive nature of the technology being developed. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Advanced Sensor Technology Development
Combat Identification Systems Research
Department of Defense Research and Development Programs
Air Force Science and Technology Investments
Raytheon Company Defense Contracts

Risk Flags

Cost Plus Fixed Fee contract type carries inherent cost overrun risk.
Long contract duration may lead to evolving requirements and potential inefficiencies.
Limited public detail on specific R&D objectives hinders full value assessment.
Potential for contractor to prioritize cost reimbursement over strict efficiency.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.6 million to RAYTHEON COMPANY. PRECISION REAL-TIME ENGAGEMENT COMBAT IDENTIFICATION SENSOR EXPLOITATION (PRECISE)

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 $20.6 million.

What is the period of performance?

Start: 2018-12-19. End: 2026-05-20.

What is Raytheon Company's track record with similar Cost Plus Fixed Fee R&D contracts with the Department of Defense?

Raytheon Company, as a major defense contractor, has extensive experience with Cost Plus Fixed Fee (CPFF) contracts across various R&D programs for the Department of Defense. Historically, CPFF contracts are utilized when the scope of work is not precisely defined or is expected to evolve, common in early-stage research. While CPFF offers flexibility, it also carries a higher risk of cost overruns for the government compared to fixed-price contracts. Raytheon's performance on such contracts would be assessed based on their ability to manage costs within projected budgets, meet technical milestones, and deliver the intended research outcomes. Past performance reviews and contract close-outs would provide specific data on their efficiency and adherence to contract terms. Without access to specific contract performance data for Raytheon on similar CPFF R&D efforts, a definitive assessment is challenging, but their long-standing presence suggests a capacity to navigate these complex contract types.

How does the $20.6 million award compare to other R&D contracts for combat identification sensors?

The $20.6 million award for the PRECISE program is a moderate-sized contract for R&D in the defense sector. Combat identification sensor technology is a critical area, and R&D investments can vary significantly based on the stage of development, technological complexity, and strategic importance. Smaller, more focused research efforts might be in the low millions, while large-scale system development or integration projects could easily reach tens or hundreds of millions of dollars. This specific award, spanning over seven years, suggests a sustained research effort rather than a rapid prototyping initiative. To benchmark effectively, one would need to compare it against other contracts for similar research phases, technological maturity levels, and specific sensor capabilities within the DoD. Given the duration and the contractor's profile, the value appears aligned with substantial, long-term R&D objectives in a specialized field.

What are the primary risks associated with this Cost Plus Fixed Fee contract for the government?

The primary risk for the government with this Cost Plus Fixed Fee (CPFF) contract is cost overrun. In a CPFF structure, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. If the actual costs exceed initial estimates, the government bears the burden of these increased expenses. This is particularly risky in R&D where unforeseen technical challenges or scope changes are common. Effective oversight, stringent cost controls, and clear definition of allowable costs are crucial to mitigate this risk. Another risk is the potential for the contractor to prioritize cost reimbursement over efficiency, although the fixed fee provides some incentive for profit maximization. The long duration also increases the risk of requirements evolving in ways that were not anticipated, potentially leading to inefficiencies or the need for contract modifications.

What is the expected program effectiveness or outcome of the PRECISE contract?

The PRECISE (PRECISION REAL-TIME ENGAGEMENT COMBAT IDENTIFICATION SENSOR EXPLOITATION) contract aims to advance the capabilities of combat identification (CID) systems through research and development in sensor exploitation. The expected outcome is the development of more precise, real-time methods for identifying friendly, neutral, and hostile forces in complex combat environments. Enhanced sensor exploitation could lead to improved situational awareness, reduced fratricide, and more effective targeting. The success of the program will be measured by the successful development and demonstration of new algorithms, sensor fusion techniques, or hardware components that significantly improve the accuracy, speed, and reliability of combat identification. Ultimately, the program's effectiveness will be judged by its contribution to enhancing the warfighter's ability to make critical decisions in dynamic operational scenarios.

How has the Department of the Air Force historically funded R&D in sensor technology?

The Department of the Air Force (DAF) has a long history of investing heavily in research and development, particularly in advanced sensor technologies, to maintain its technological edge. Funding typically flows through various channels, including direct R&D appropriations, specific program executive offices, and collaborative efforts with research institutions and industry partners. Historically, the DAF has supported foundational research in areas like radar, infrared, electro-optical, and acoustic sensors, as well as more advanced fields such as artificial intelligence for sensor data processing and multi-sensor fusion. Contracts like PRECISE represent a continuation of this strategic investment. Historical spending patterns show a consistent allocation towards R&D, with significant portions dedicated to developing next-generation capabilities that enhance intelligence, surveillance, reconnaissance (ISR), and combat effectiveness. The specific amounts and focus areas evolve with technological advancements and evolving threat landscapes.

Industry Classification

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

Solicitation ID: FA865018S1672

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: $20,636,977

Exercised Options: $20,636,977

Current Obligation: $20,636,977

Actual Outlays: $1,034,736

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline