DoD's $30M Raytheon contract for space internet R&D shows strong competition and potential for innovation

Contract Overview

Contract Amount: $30,072,889 ($30.1M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2020-09-10

End Date: 2026-03-31

Contract Duration: 2,028 days

Daily Burn Rate: $14.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: DEFENSE EXPERIMENTATION USING COMMERCIAL SPACE INTERNET (DEUCSI)

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75071

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $30.1 million to RAYTHEON COMPANY for work described as: DEFENSE EXPERIMENTATION USING COMMERCIAL SPACE INTERNET (DEUCSI) Key points: 1. Contract awarded to Raytheon Company for research and development in physical, engineering, and life sciences. 2. Utilizes a cost-plus-fixed-fee payment structure, common in R&D where final costs are uncertain. 3. Awarded under full and open competition, suggesting a robust bidding process. 4. The contract duration extends to March 2026, indicating a long-term research objective. 5. Focuses on experimentation using commercial space internet, aligning with modern technological advancements. 6. The base award amount is substantial, reflecting the complexity and scope of the research.

Value Assessment

Rating: good

The base award of $30,072,889 for R&D services is significant. While direct comparisons are difficult without knowing the specific technological goals, the cost-plus-fixed-fee structure is typical for research where innovation and exploration are key. Benchmarking this against similar large-scale R&D efforts within the Department of Defense would provide further context on value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. This competitive process is expected to drive better pricing and encourage innovative solutions from the bidders. The number of bidders is not specified, but the 'full and open' designation is a positive sign for market engagement.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more cost-effective solutions and a wider array of technological approaches.

Public Impact

The Department of Defense benefits through advancements in space-based internet capabilities for experimentation. This contract supports research and development in advanced physical and engineering sciences. The primary geographic impact is likely within the United States, where Raytheon operates and where the research will be conducted or applied. Potential workforce implications include highly skilled R&D professionals in aerospace and telecommunications.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can sometimes lead to cost overruns if not managed diligently.
The long duration of the contract requires ongoing oversight to ensure milestones are met.
Reliance on commercial space internet introduces potential dependencies on external providers.

Positive Signals

Award under full and open competition suggests a competitive process that could yield good value.
Focus on R&D in a critical area like space internet aligns with strategic defense needs.
The substantial funding indicates a commitment to exploring potentially groundbreaking technologies.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The market for space-based internet and related defense applications is rapidly evolving, driven by both commercial innovation and government requirements. Spending in this area is significant as agencies seek to leverage cutting-edge technologies for strategic advantage. Comparable spending benchmarks would involve other large-scale R&D contracts within the defense sector focused on communication and space technologies.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large-scale R&D effort awarded to a major contractor like Raytheon, it is unlikely to involve significant direct subcontracting opportunities for small businesses unless specifically mandated or if specialized expertise is required. The primary impact on the small business ecosystem would be indirect, through potential advancements in technology that could later be commercialized or adopted by smaller firms.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force within the Department of Defense. Mechanisms likely include regular progress reports, milestone reviews, and financial audits, typical for cost-plus-fixed-fee R&D contracts. Transparency is generally maintained through contract awards databases and public reporting, though specific research details may be sensitive. Inspector General jurisdiction would apply for any investigations into fraud, waste, or abuse.

Related Government Programs

Department of Defense Research and Development Programs
Space-Based Communication Systems
Advanced Technology Development Contracts
Commercial Satellite Services Procurement

Risk Flags

Cost-Plus-Fixed-Fee contract type requires careful monitoring for cost growth.
Reliance on commercial providers introduces external dependencies and potential security risks.
Long contract duration may lead to technology obsolescence or shifting strategic priorities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.1 million to RAYTHEON COMPANY. DEFENSE EXPERIMENTATION USING COMMERCIAL SPACE INTERNET (DEUCSI)

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 $30.1 million.

What is the period of performance?

Start: 2020-09-10. End: 2026-03-31.

What is the specific technological objective of the DEUCSI contract?

The DEUCSI (DEFENSE EXPERIMENTATION USING COMMERCIAL SPACE INTERNET) contract awarded to Raytheon Company aims to conduct research and development focused on leveraging commercial space internet capabilities for defense applications. While the precise technological objectives are not detailed in the provided data, the contract's classification under 'Research and Development in the Physical, Engineering, and Life Sciences' and its focus on 'experimentation using commercial space internet' suggest an exploration into how existing or emerging commercial satellite internet services can be adapted, integrated, or utilized to enhance military communication, data transfer, or operational capabilities in various environments. This could involve testing bandwidth, latency, security, and resilience of commercial systems for military use cases, potentially leading to new doctrines or technological requirements for future defense networks.

How does the $30 million award compare to similar R&D contracts in space-based communications?

The base award of $30,072,889 for the DEUCSI contract is a substantial investment in R&D for space-based communications. To benchmark this effectively, one would need to compare it against other Department of Defense (DoD) or related agency contracts for research into satellite communications, network modernization, or advanced telecommunications. For instance, contracts focused on developing new satellite constellations, ground station technologies, or secure communication protocols might have similar or higher values depending on their scope and duration. Without specific comparable contract data, it's challenging to definitively state if $30 million represents a high, low, or average investment. However, for a research and experimentation phase, it indicates a significant commitment to exploring the potential of commercial space internet for defense purposes.

What are the primary risks associated with this contract for the Department of Defense?

Several risks are associated with this contract. Firstly, the cost-plus-fixed-fee (CPFF) contract type, while common for R&D, carries the risk of cost overruns if the project's scope expands or unforeseen technical challenges arise, potentially exceeding the initial $30 million base award. Secondly, reliance on commercial space internet services introduces external dependencies; disruptions in commercial provider services, changes in their business models, or security vulnerabilities within those commercial networks could impact the defense experimentation. Thirdly, the long contract duration (ending March 2026) means that the technology landscape could evolve rapidly, potentially making the initial research objectives or outcomes less relevant by the contract's conclusion. Finally, ensuring the security and resilience of any integrated commercial systems for defense applications is a critical risk that requires rigorous testing and validation.

What is Raytheon Company's track record in defense R&D and space technologies?

Raytheon Company, now part of RTX Corporation, has a long and extensive track record in defense research and development, as well as significant expertise in space technologies. Historically, Raytheon has been a prime contractor on numerous complex defense programs, including missile systems, radar technology, command and control systems, and advanced sensors. In the space domain, the company has been involved in developing satellite components, space-based sensors, and communication systems for both military and civilian applications. Their experience spans various aspects of aerospace and defense, making them a well-established entity capable of undertaking large-scale R&D initiatives like the DEUCSI contract. Their history suggests a strong capacity to manage complex projects, integrate advanced technologies, and deliver on challenging research objectives within the defense sector.

How does the 'full and open competition' aspect influence the potential value for taxpayers?

The 'full and open competition' designation for the DEUCSI contract is a positive indicator for taxpayer value. This procurement method ensures that all responsible sources were permitted to submit a bid, fostering a competitive environment. In theory, competition drives down prices and encourages offerors to propose the most innovative and cost-effective solutions to win the contract. For taxpayers, this means the Department of Defense is likely to receive a more competitive price for the R&D services compared to a sole-source or limited competition scenario. It also increases the likelihood that the chosen solution represents a strong balance between technological capability and cost efficiency, maximizing the return on the $30 million investment.

What are the potential long-term implications of this contract for future defense capabilities?

The DEUCSI contract holds potential for significant long-term implications for future defense capabilities. By experimenting with commercial space internet, the Department of Defense aims to explore new avenues for resilient, high-bandwidth communication, which is crucial for modern warfare. Successful experimentation could lead to the integration of commercial internet services into military networks, offering greater flexibility, potentially lower costs compared to dedicated military satellite systems, and enhanced connectivity in diverse operational environments. This could fundamentally alter how the DoD approaches its communication infrastructure, potentially reducing reliance on traditional, more expensive, and less agile military-specific systems. The insights gained could also inform future requirements for military satellite constellations and ground systems, driving innovation across the defense space sector.

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: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 2501 W UNIVERSITY DR, MCKINNEY, TX, 75071

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: $30,072,889

Exercised Options: $30,072,889

Current Obligation: $30,072,889

Actual Outlays: $4,190,031

Subaward Activity

Number of Subawards: 12

Total Subaward Amount: $1,703,460

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline