DoD Awards Raytheon $181M for ASARS-2B Production, Extending Through 2027
Contract Overview
Contract Amount: $181,215,215 ($181.2M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2022-09-09
End Date: 2027-12-15
Contract Duration: 1,923 days
Daily Burn Rate: $94.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: ASARS-2B PRODUCTION
Place of Performance
Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245
Plain-Language Summary
Department of Defense obligated $181.2 million to RAYTHEON COMPANY for work described as: ASARS-2B PRODUCTION Key points: 1. Significant contract value of $181.2M for advanced sensor systems. 2. Sole-source award to Raytheon Company raises questions about competition. 3. Long contract duration (2027) suggests a need for ongoing support. 4. Focus on Search, Detection, and Navigation systems highlights critical defense capabilities.
Value Assessment
Rating: fair
The contract type is Cost Plus Incentive Fee, which can lead to cost overruns if not managed carefully. Benchmarking against similar complex defense systems is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Raytheon. This limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive process.
Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for the ASARS-2B system.
Public Impact
Enhances critical Air Force surveillance and reconnaissance capabilities. Supports advanced aerospace and defense technology development. Potential for long-term reliance on a single supplier for this technology.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- Cost-plus contract type carries inherent cost risk.
- Long contract duration may not reflect current market efficiencies.
Positive Signals
- Award supports critical national defense systems.
- Raytheon is an established defense contractor with relevant expertise.
Sector Analysis
This contract falls within the Aerospace and Defense sector, specifically focusing on advanced sensor and navigation systems. Spending in this area is typically high due to the specialized nature and critical requirements of military technology.
Small Business Impact
The contract data does not indicate any specific provisions or subcontracting goals for small businesses. As a sole-source award to a large prime contractor, opportunities for small businesses may be limited unless actively pursued by Raytheon.
Oversight & Accountability
The sole-source nature of this award warrants close oversight from the Department of Defense to ensure fair pricing and effective performance. Regular reviews of cost and progress will be crucial.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competition may lead to inflated costs.
- Cost-plus contract type increases financial risk for the government.
- Long contract duration could result in outdated technology.
- Potential for contractor lock-in due to specialized system.
Tags
search-detection-navigation-guidance-aer, department-of-defense, ca, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $181.2 million to RAYTHEON COMPANY. ASARS-2B 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 $181.2 million.
What is the period of performance?
Start: 2022-09-09. End: 2027-12-15.
What is the justification for the sole-source award, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. The Department of Defense should have conducted a price analysis, potentially using historical data or independent cost estimates, to ensure the pricing is fair and reasonable, despite the lack of direct competition.
What are the specific performance metrics and incentive structures within the Cost Plus Incentive Fee (CPIF) contract?
A CPIF contract incentivizes both the contractor and the government by establishing target costs, target profits, and sharing ratios for cost underruns or overruns. Understanding these specific metrics is crucial to assess how effectively Raytheon is being motivated to control costs and meet performance objectives for the ASARS-2B production.
How does the ASARS-2B system contribute to the Air Force's overall mission effectiveness, and what is the long-term strategy for its sustainment?
The ASARS-2B is likely a key component for intelligence, surveillance, and reconnaissance (ISR) missions, providing critical data for situational awareness and decision-making. The long-term strategy should address not only production but also sustainment, upgrades, and potential future replacements to ensure continued operational effectiveness and avoid vendor lock-in.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: RTX Corp
Address: 2000 E EL SEGUNDO BLVD, EL SEGUNDO, CA, 90245
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: $186,782,926
Exercised Options: $186,782,926
Current Obligation: $181,215,215
Subaward Activity
Number of Subawards: 136
Total Subaward Amount: $32,775,973
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2022-09-09
Current End Date: 2027-12-15
Potential End Date: 2027-12-15 00:00:00
Last Modified: 2026-03-03
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