Raytheon Company awarded $80.5M for logistics support and production, with limited competition

Contract Overview

Contract Amount: $80,555,623 ($80.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2008-12-01

End Date: 2012-12-11

Contract Duration: 1,471 days

Daily Burn Rate: $54.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CONTRACTOR LOGISTICS SUPPORT (CLS) AND LOT 8 PRODUCTION

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $80.6 million to RAYTHEON COMPANY for work described as: CONTRACTOR LOGISTICS SUPPORT (CLS) AND LOT 8 PRODUCTION Key points: 1. Contract value of $80.5 million for contractor logistics support and production. 2. Awarded as a definitive contract with a firm fixed price structure. 3. Limited competition was identified for this contract. 4. The contract duration spans over 1400 days. 5. The primary NAICS code indicates a focus on equipment repair and maintenance. 6. The contract is managed by the Department of the Air Force.

Value Assessment

Rating: fair

The contract value of $80.5 million for contractor logistics support and production appears to be within a reasonable range for such services, though specific benchmarks are unavailable without more detailed service descriptions. The firm fixed price structure suggests a degree of cost certainty for the government. However, the lack of robust competition raises concerns about whether the government secured the best possible value. Without comparative data on similar logistics support contracts or detailed cost breakdowns, a definitive assessment of value for money is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under a limited competition, meaning that not all eligible sources were solicited. The specific reasons for this limitation are not detailed in the provided data. Limited competition can sometimes lead to higher prices and reduced innovation compared to full and open competition, as the pool of potential bidders is restricted. The number of bidders is not specified, but the classification implies it was more than one, yet less than a fully open process.

Taxpayer Impact: Limited competition may result in taxpayers paying more than they would under a more open and competitive bidding process. It also reduces the government's ability to leverage a wider market to find the most cost-effective solutions.

Public Impact

The Department of the Air Force benefits from continued contractor logistics support and production for essential equipment. This contract ensures the operational readiness and maintenance of critical defense systems. The services are geographically focused within Arizona, where the contractor is located. The contract supports jobs within the defense contracting sector, specifically in Arizona.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have restricted price discovery and potentially increased costs for taxpayers.
Lack of detailed performance metrics makes it difficult to assess the effectiveness of the logistics support.
The firm fixed price contract, while offering cost certainty, might disincentivize cost-saving innovations by the contractor.

Positive Signals

The firm fixed price contract provides budget predictability for the Department of the Air Force.
The contract ensures continued support for critical defense systems, maintaining operational readiness.
The contractor, Raytheon Company, is a well-established entity in the defense industry.

Sector Analysis

This contract falls within the broader defense sector, specifically related to the maintenance, repair, and operational support of electronic and precision equipment. The market for contractor logistics support (CLS) is substantial within the Department of Defense, encompassing a wide range of services from spare parts management to depot-level maintenance. Benchmarking this specific contract's value is difficult without knowing the exact systems supported, but CLS contracts are a significant portion of defense spending, often running into billions of dollars annually across various branches.

Small Business Impact

The provided data indicates that small business participation (sb) was false, and there was no indication of a small business set-aside (ss). This suggests that small businesses were likely not a primary focus for this specific contract award. Consequently, there are no direct subcontracting implications for small businesses stemming from this contract as described. The impact on the small business ecosystem is minimal, as the contract was not designed to foster their participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program management office within the Department of the Air Force. Accountability measures are inherent in the firm fixed price contract type, which obligates the contractor to deliver specified goods or services at an agreed price. Transparency is limited by the 'NOT COMPETED' status and the lack of detailed public reporting on performance metrics. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Logistics Agency (DLA) Support Contracts
Air Force Materiel Command (AFMC) Sustainment Programs
Contractor Logistics Support (CLS) Services
Department of Defense Maintenance and Repair Contracts

Risk Flags

Limited competition may lead to suboptimal pricing.
Lack of detailed scope makes value assessment difficult.
Potential for contractor lock-in due to non-competitive award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $80.6 million to RAYTHEON COMPANY. CONTRACTOR LOGISTICS SUPPORT (CLS) AND LOT 8 PRODUCTION

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 $80.6 million.

What is the period of performance?

Start: 2008-12-01. End: 2012-12-11.

What specific electronic and precision equipment does this contract cover for logistics support and production?

The provided data does not specify the exact types of electronic and precision equipment covered under this contract. The NAICS code 811219, 'Other Electronic and Precision Equipment Repair and Maintenance,' is broad and encompasses a wide range of potential items. To understand the scope, one would need to consult the contract's Statement of Work (SOW) or Performance Work Statement (PWS). This information is crucial for assessing the contract's true value, risks, and relevance to specific defense platforms or systems. Without this detail, comparisons to other contracts are generalized.

What were the specific justifications for awarding this contract on a 'NOT COMPETED' basis?

The data indicates the contract was awarded under 'NOT COMPETED,' which implies a sole-source or limited justification was used, bypassing a full and open competition. Common justifications include urgency, lack of available sources, or specific proprietary technology. Without access to the contract file documentation, the precise reason for not competing this $80.5 million award remains unknown. This lack of transparency hinders a thorough assessment of whether competition was appropriately bypassed and if the government obtained fair value under the circumstances.

How does the $80.5 million contract value compare to similar logistics support contracts for electronic equipment within the Air Force?

Direct comparison of the $80.5 million contract value is challenging without knowing the specific systems supported and the scope of 'logistics support and production.' However, large-scale contractor logistics support (CLS) contracts for major defense systems can range from tens of millions to billions of dollars. Given the firm fixed price structure and the duration of over 1400 days, this award appears to be a significant commitment. Benchmarking would require identifying contracts with similar service levels, equipment types, and contract durations within the Air Force or DoD.

What is Raytheon Company's track record with similar logistics support contracts for the Department of Defense?

Raytheon Company (now RTX) has a long and extensive history of providing complex logistics, sustainment, and production services to the Department of Defense across various platforms and weapon systems. They are a major defense contractor involved in numerous large-scale support programs. While this specific contract's details are limited, Raytheon's general track record suggests they possess the capability and infrastructure to handle such requirements. However, past performance on similar contracts would need to be reviewed in detail, including any past issues or successes, to fully assess their suitability and value proposition for this particular award.

What are the potential risks associated with a 'NOT COMPETED' contract of this magnitude?

The primary risk associated with a 'NOT COMPETED' contract of $80.5 million is the potential for reduced value for money. Without competitive pressure, the contractor may not be incentivized to offer the lowest possible price or the most innovative solutions. Other risks include a lack of transparency in the procurement process, potential for contractor lock-in, and the possibility that alternative, potentially more cost-effective, solutions were not explored. Ensuring robust oversight and performance management becomes even more critical in sole-source or limited-competition scenarios.

What is the historical spending pattern for contractor logistics support for electronic and precision equipment by the Department of the Air Force?

The Department of the Air Force, like other branches of the DoD, consistently spends significant amounts on contractor logistics support (CLS) for its vast array of electronic and precision equipment. This spending is driven by the need to maintain high operational readiness for complex weapon systems, aircraft, and communication networks. Historical data shows a trend of increasing reliance on contractors for specialized maintenance, repair, overhaul, and supply chain management. While specific figures for 'electronic and precision equipment' CLS fluctuate based on modernization programs and system lifecycles, it represents a substantial and ongoing investment within the Air Force's overall budget.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Other Electronic and Precision Equipment Repair and Maintenance

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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

Financial Breakdown

Contract Ceiling: $369,331,105

Exercised Options: $202,649,903

Current Obligation: $80,555,623

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline