DoD's $55M EA Improvement Contract with Raytheon Faces Scrutiny for Lack of Competition

Contract Overview

Contract Amount: $55,175,937 ($55.2M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2012-06-28

End Date: 2024-01-19

Contract Duration: 4,222 days

Daily Burn Rate: $13.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: EA IMPROVEMENT

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $55.2 million to RAYTHEON COMPANY for work described as: EA IMPROVEMENT Key points: 1. Significant spending of $55.18M on EA Improvement. 2. Sole-source award to Raytheon Company raises competition concerns. 3. Long contract duration (2012-2024) may indicate evolving needs or extended execution. 4. Cost Plus Fixed Fee contract type can incentivize cost increases. 5. Lack of small business participation noted.

Value Assessment

Rating: questionable

The Cost Plus Fixed Fee structure, coupled with a lack of competitive bidding, makes it difficult to assess value. Without benchmarks from similar contracts or a competitive process, it's hard to determine if the $55.18M represents fair pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, awarded solely to Raytheon Company. This limits price discovery and potentially leads to higher costs for the government compared to a competitive scenario.

Taxpayer Impact: The absence of competition may result in taxpayers paying more than necessary for the EA Improvement services.

Public Impact

Taxpayers may be overpaying due to the sole-source nature of the contract. The long duration of the contract raises questions about its ongoing necessity and efficiency. Lack of transparency in pricing due to non-competitive award. Potential for cost overruns given the Cost Plus Fixed Fee structure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost Plus Fixed Fee contract type
No small business participation
Long contract duration

Positive Signals

Awarded to a known defense contractor
Contract covers a critical area (Guided Missile and Space Vehicle Manufacturing)

Sector Analysis

This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a critical component of defense spending. Benchmarks for similar sole-source, cost-plus contracts in this specialized area are difficult to establish without competitive data.

Small Business Impact

The contract data indicates no small business participation (ss: false, sb: false). This suggests that opportunities for small businesses were either not sought or not realized in this procurement.

Oversight & Accountability

The sole-source nature of this contract warrants closer oversight to ensure costs are reasonable and performance meets expectations. Accountability for the long duration and cost structure needs to be clearly defined.

Related Government Programs

Guided Missile and Space Vehicle Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Sole-source award limits competition and price discovery.
Cost Plus Fixed Fee contract type can lead to cost overruns.
Lack of small business participation.
Long contract duration raises questions about efficiency and evolving needs.
Limited transparency on specific deliverables and achieved benefits.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $55.2 million to RAYTHEON COMPANY. EA IMPROVEMENT

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 $55.2 million.

What is the period of performance?

Start: 2012-06-28. End: 2024-01-19.

What specific EA improvements were made, and how did they demonstrably enhance guided missile and space vehicle capabilities?

The provided data lacks specifics on the 'EA Improvement' itself. To assess value, detailed documentation on the scope of work, deliverables, and the tangible benefits achieved would be necessary. Without this, it's impossible to confirm if the $55.18M investment yielded proportional enhancements in guided missile and space vehicle performance or efficiency.

Given the sole-source award and Cost Plus Fixed Fee structure, what mechanisms were in place to control costs and ensure fair pricing?

The data indicates a sole-source, Cost Plus Fixed Fee contract, which inherently carries higher risk for cost overruns. Without competitive bidding, the government relies heavily on robust oversight, detailed cost audits, and stringent negotiation to control expenses. The absence of this information raises concerns about the effectiveness of price discovery and cost containment measures.

How does the extended contract duration (2012-2024) reflect the agency's strategic planning and the evolving needs within guided missile and space vehicle manufacturing?

A contract spanning over a decade suggests either a long-term, evolving project or potential inefficiencies in project management and acquisition. Understanding the rationale behind this extended duration is crucial. It could indicate a highly complex, multi-phase effort or, conversely, a lack of agile acquisition strategies to adapt to changing technological landscapes or requirements.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

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, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $58,070,677

Exercised Options: $58,070,677

Current Obligation: $55,175,937

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline