DoD's $1.4B MMP Upgrade Contract with Raytheon Faces Scrutiny Over Cost and Duration
Contract Overview
Contract Amount: $140,128,475 ($140.1M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2008-01-15
End Date: 2021-04-30
Contract Duration: 4,854 days
Daily Burn Rate: $28.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: MMP UPGRADE "SDD PHASE"
Place of Performance
Location: MARLBOROUGH, MIDDLESEX County, MASSACHUSETTS, 01752
Plain-Language Summary
Department of Defense obligated $140.1 million to RAYTHEON COMPANY for work described as: MMP UPGRADE "SDD PHASE" Key points: 1. Significant cost overrun potential due to Cost Plus Fixed Fee contract type. 2. Long contract duration (4854 days) raises concerns about adaptability and efficiency. 3. Lack of small business participation noted. 4. Broad sector applicability in Radio and Television Broadcasting equipment manufacturing.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee (CPFF) contract type, while common for R&D, can incentivize cost overruns. The total award of $1.4B over nearly 13.5 years suggests potential for significant cost growth beyond initial estimates.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating a competitive bidding process. However, the CPFF structure may have influenced the final pricing and the government's ability to secure the best value.
Taxpayer Impact: The substantial value of this contract represents a significant taxpayer investment. The CPFF structure necessitates robust oversight to ensure costs remain reasonable and aligned with project objectives.
Public Impact
Taxpayers are funding a large-scale upgrade with potential for cost escalation. The long duration could mean the technology is outdated by completion. The lack of small business involvement limits opportunities for smaller innovative firms.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type
- Extended contract duration
- No small business participation
- Potential for scope creep
Positive Signals
- Awarded under full and open competition
- Contractor is a major defense supplier
Sector Analysis
This contract falls within the Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing sector. Spending in this sector can vary widely based on technological advancements and defense modernization needs.
Small Business Impact
The contract data indicates no small business participation (sb: false). This suggests that opportunities for small businesses were either not pursued or not awarded in this significant procurement.
Oversight & Accountability
The extended duration and CPFF contract type necessitate strong government oversight to manage costs, track progress, and ensure the final product meets requirements effectively and efficiently.
Related Government Programs
- Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Cost overruns due to CPFF
- Technological obsolescence risk
- Lack of small business participation
- Extended contract duration
- Potential for scope creep
Tags
radio-and-television-broadcasting-and-wi, department-of-defense, ma, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $140.1 million to RAYTHEON COMPANY. MMP UPGRADE "SDD PHASE"
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 $140.1 million.
What is the period of performance?
Start: 2008-01-15. End: 2021-04-30.
What specific performance metrics are in place to ensure the MMP upgrade delivers value within the $1.4B budget?
The contract details do not explicitly outline specific performance metrics tied to the $1.4B budget. Given the CPFF structure, oversight would focus on tracking incurred costs against the fixed fee and ensuring adherence to the Statement of Work. Robust program management and regular reviews are crucial to validate that the spending aligns with achieving the upgrade's objectives and delivering intended value.
How does the long contract duration (4854 days) mitigate or exacerbate risks associated with technological obsolescence in communications equipment?
The extended duration significantly increases the risk of technological obsolescence. While the 'SDD PHASE' implies development, a nearly 13.5-year timeline for communications equipment is substantial. Mitigation would rely on modular design, phased upgrades, and continuous technology insertion strategies within the contract to adapt to evolving standards and threats during its lifecycle.
What is the government's strategy for ensuring the effectiveness of the MMP upgrade, given the potential for cost overruns and long timelines?
The government's strategy likely involves stringent program management, regular technical reviews, and potentially incorporating flexibility clauses for technology updates. The 'full and open competition' suggests a competitive baseline, but ongoing vigilance is required. Effective oversight of the CPFF contract is paramount to control costs and ensure the final system meets the Air Force's operational needs despite the extended schedule.
Industry Classification
NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing
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
Offers Received: 2
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Rockwell Collins Australia PTY Limited
Address: 1001 BOSTON POST RD E, MARLBOROUGH, MA, 01752
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: $672,548,651
Exercised Options: $141,025,029
Current Obligation: $140,128,475
Actual Outlays: $278,643
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2008-01-15
Current End Date: 2021-04-30
Potential End Date: 2021-04-30 00:00:00
Last Modified: 2024-02-02
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