DoD's $40.5M R&D contract for satellite communications awarded to Raytheon Company

Contract Overview

Contract Amount: $40,497,742 ($40.5M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2023-06-09

End Date: 2027-07-31

Contract Duration: 1,513 days

Daily Burn Rate: $26.8K/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), ROLLING THUNDER MULTI-BAND MULTI-ORBIT BLOS COMMUNICAT

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75071

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $40.5 million to RAYTHEON COMPANY for work described as: DEFENSE EXPERIMENTATION USING COMMERCIAL SPACE INTERNET (DEUCSI), ROLLING THUNDER MULTI-BAND MULTI-ORBIT BLOS COMMUNICAT Key points: 1. Contract focuses on advanced satellite communication capabilities, aligning with national security objectives. 2. Raytheon Company, a major defense contractor, brings significant experience in aerospace and defense systems. 3. The contract's duration and cost-plus-fixed-fee structure suggest a complex, research-intensive project. 4. Performance will be monitored by the Department of the Air Force, indicating a focus on mission success. 5. The R&D nature of the contract implies potential for technological innovation and future capability development.

Value Assessment

Rating: good

The contract value of $40.5 million for a 5-year R&D effort appears reasonable given the complexity of developing advanced satellite communication systems. Benchmarking against similar large-scale defense R&D contracts for communication technologies suggests this falls within expected ranges. The cost-plus-fixed-fee (CPFF) pricing structure is common for R&D where final costs are uncertain, but it necessitates robust oversight to ensure value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple capable vendors had the opportunity to bid. The specific number of bidders is not provided, but the 'full and open' designation suggests a competitive process that should drive fair pricing and innovation. This approach is generally favored for ensuring the government receives the best value from a broad range of potential solutions.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages a wider pool of contractors to propose innovative solutions and competitive pricing, potentially leading to cost savings and superior technological outcomes.

Public Impact

The Department of Defense, specifically the Department of the Air Force, will benefit from enhanced satellite communication capabilities. The contract aims to deliver advancements in multi-band, multi-orbit, beyond-line-of-sight communication technologies. The primary geographic impact is expected to be within the operational theaters of the U.S. military. Workforce implications may include specialized engineering and research roles within Raytheon and its potential subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can lead to cost overruns if not managed diligently.
The long duration of the contract (over 4 years) requires sustained oversight to ensure progress and adapt to evolving technological landscapes.
Reliance on a single large contractor like Raytheon could limit broader industry innovation if not balanced with other initiatives.

Positive Signals

Awarding to a prime contractor with a strong track record in aerospace and defense systems.
The use of full and open competition suggests a robust selection process aimed at securing the best available technology and value.
The contract's focus on advanced R&D aligns with the need for modernizing military communication infrastructure.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on advanced communication technologies for defense applications. The market for defense-related satellite communications is highly specialized, dominated by a few large aerospace and defense contractors. Spending in this area is driven by the need for secure, resilient, and high-bandwidth communication systems to support global military operations. Comparable spending benchmarks would typically involve other large-scale R&D efforts in advanced electronics, networking, and space systems.

Small Business Impact

While this contract is awarded to a large prime contractor, Raytheon Company, there is potential for small business involvement through subcontracting opportunities. The extent of small business participation will depend on Raytheon's subcontracting plan and the availability of specialized small businesses capable of contributing to advanced R&D in satellite communications. Further analysis would be needed to determine if specific small business set-asides were incorporated or if subcontracting goals were established.

Oversight & Accountability

Oversight for this contract will primarily be managed by the Department of the Air Force, likely through contracting officers and program managers. Accountability measures will be embedded in the contract's milestones, deliverables, and reporting requirements. Transparency is typically maintained through contract award databases and potentially through program reviews, though specific R&D details may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Satellite Communications Systems
Advanced Research Projects Agency (ARPA) Initiatives
Department of Defense Research and Development Programs
Space-Based Communication Networks

Risk Flags

Cost Overrun Risk
Technological Obsolescence
Contractor Performance Monitoring
Long-Term Project Management

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.5 million to RAYTHEON COMPANY. DEFENSE EXPERIMENTATION USING COMMERCIAL SPACE INTERNET (DEUCSI), ROLLING THUNDER MULTI-BAND MULTI-ORBIT BLOS COMMUNICAT

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 $40.5 million.

What is the period of performance?

Start: 2023-06-09. End: 2027-07-31.

What is Raytheon Company's track record with similar Department of Defense R&D contracts, particularly in satellite communications?

Raytheon Company, now part of RTX, has a long and extensive history of performing complex research and development for the Department of Defense, including significant work in aerospace, defense electronics, and communication systems. They have been a prime contractor on numerous satellite programs and advanced communication technology development efforts. Their track record includes delivering sophisticated solutions for secure, resilient, and high-bandwidth communications, often involving space-based platforms. While specific details of past R&D contracts are often proprietary, Raytheon's consistent presence as a major defense contractor suggests a demonstrated capability to meet the technical and programmatic requirements of challenging R&D initiatives like the DEUCSI program.

How does the $40.5 million contract value compare to other R&D contracts for satellite communication technologies?

The $40.5 million contract value for the DEUCSI program, spanning approximately five years, appears to be within a reasonable range for advanced research and development in satellite communications. Large-scale R&D efforts in this specialized field often involve significant investment due to the complexity of developing and testing cutting-edge technologies, including multi-band, multi-orbit, and beyond-line-of-sight capabilities. Comparable contracts for similar R&D initiatives within the defense sector can range from tens to hundreds of millions of dollars, depending on the scope, duration, and technological maturity targeted. The CPFF structure also influences the perceived value, as it accounts for uncertainty in research costs.

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

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract structure for R&D, like the DEUCSI program, revolve around cost control and contractor incentive. For the government, there's a risk that actual costs could exceed initial estimates, although the fixed fee provides a ceiling on the contractor's profit. The contractor may have less incentive to control costs aggressively compared to fixed-price contracts, as their fee is fixed regardless of the final cost. This necessitates robust government oversight, including detailed cost monitoring, auditing, and performance reviews, to ensure that expenditures are reasonable and necessary for achieving the contract's objectives. Effective management is crucial to mitigate potential cost overruns and ensure value for taxpayer money.

What is the expected impact of this contract on the future capabilities of the Department of Defense's communication systems?

This contract is expected to significantly enhance the future capabilities of the Department of Defense's communication systems by advancing technologies for multi-band, multi-orbit, and beyond-line-of-sight (BLOS) satellite communications. The research aims to provide more resilient, secure, and flexible communication pathways that can operate effectively in contested environments and across diverse geographical locations. Improved BLOS capabilities are critical for maintaining command and control over dispersed forces. Advancements in multi-band and multi-orbit technologies will likely lead to greater bandwidth, reduced latency, and enhanced interoperability between different communication assets, ultimately supporting more agile and effective military operations.

How does the 'full and open competition' award mechanism influence the potential for innovation and cost-effectiveness?

The 'full and open competition' award mechanism is designed to maximize both innovation and cost-effectiveness. By allowing any responsible source to submit a proposal, the government broadens the pool of potential innovators and ensures that a wide range of technological solutions are considered. This competitive pressure incentivizes offerors to propose the most advanced and cost-effective approaches to meet the government's requirements. It also helps in price discovery, as competing proposals allow the government to benchmark proposed costs against market rates and other offers. Ultimately, this process aims to secure the best value for the taxpayer by fostering a dynamic marketplace of ideas and capabilities.

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

Solicitation ID: FA865017S9300

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

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: $41,497,742

Exercised Options: $40,497,742

Current Obligation: $40,497,742

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $3,026,774

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline