DoD awards Raytheon $44M for Field Team Support, raising concerns over sole-source justification and cost-plus contract type

Contract Overview

Contract Amount: $44,167,352 ($44.2M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2016-09-08

End Date: 2022-05-31

Contract Duration: 2,091 days

Daily Burn Rate: $21.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF. FIELD TEAM SUPPORT

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $44.2 million to RAYTHEON COMPANY for work described as: IGF::OT::IGF. FIELD TEAM SUPPORT Key points: 1. Significant contract value ($44.17M) awarded to a single large business. 2. Lack of competition raises questions about potential overpayment. 3. Cost-plus contract type offers limited incentive for cost control. 4. Engineering services sector often sees complex, specialized needs, but transparency is key.

Value Assessment

Rating: questionable

The contract's cost-plus fixed fee structure, combined with a lack of competition, makes it difficult to benchmark pricing effectively against similar services. The total award amount of $44.17M over several years suggests a substantial investment where precise cost controls are crucial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs for taxpayers as there was no competitive pressure to drive down the price.

Taxpayer Impact: The absence of competition for a $44.17M contract suggests taxpayers may be paying a premium due to the lack of market forces.

Public Impact

Taxpayers may be overpaying for engineering services due to the lack of competitive bidding. The long duration of the contract (2091 days) means potential cost overruns could accumulate significantly. Lack of transparency in the sole-source justification hinders public understanding of the necessity and fairness of the award.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Lack of competition
Long contract duration

Positive Signals

Awarded to established contractor (Raytheon)
Supports critical defense needs

Sector Analysis

This contract falls within the Engineering Services sector, which is vital for defense operations. Benchmarking is challenging due to the specialized nature of field team support, but the $44.17M value is substantial for this category.

Small Business Impact

The contract was awarded to Raytheon Company, a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award, missing an opportunity for small business participation.

Oversight & Accountability

The sole-source nature of this award warrants closer oversight to ensure the pricing is fair and reasonable. The Department of Defense and the Defense Contract Management Agency should provide clear justification for the lack of competition and monitor costs diligently.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competition
Sole-source justification unclear
Cost-plus contract type risks overruns
Limited small business participation
Long contract duration increases risk exposure

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.2 million to RAYTHEON COMPANY. IGF::OT::IGF. FIELD TEAM SUPPORT

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 $44.2 million.

What is the period of performance?

Start: 2016-09-08. End: 2022-05-31.

What specific factors justified the sole-source award for these engineering services, and were alternatives explored?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. For this $44.17M contract, the specific rationale needs to be publicly documented to ensure it aligns with federal procurement regulations. Without this transparency, it's difficult to assess if competition was truly impossible or if opportunities were missed.

How are costs being controlled and validated under this Cost Plus Fixed Fee (CPFF) contract, given the absence of competition?

CPFF contracts can be susceptible to cost overruns as the contractor is reimbursed for allowable costs plus a fixed fee. Robust oversight by the Defense Contract Management Agency is critical to scrutinize all costs claimed by Raytheon. Regular audits and performance reviews are essential to ensure the fixed fee remains appropriate and that costs are reasonable and allocable.

What is the long-term strategic value and necessity of this specific field team support, and could it be achieved more cost-effectively through other means?

The long-term value hinges on the criticality of the field team support to ongoing defense operations. Assessing cost-effectiveness requires comparing the current contract's total lifecycle cost against potential alternative solutions, including different contract types or service providers if competition were feasible. Continuous evaluation of the necessity and efficiency of these services is paramount.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE SERVICES

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: $49,826,263

Exercised Options: $49,826,263

Current Obligation: $44,167,352

Actual Outlays: $820,826

Subaward Activity

Number of Subawards: 72

Total Subaward Amount: $14,330,576

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline