DoD's $19.2M Raytheon Contract for R&D: A Cost Plus Fixed Fee Award
Contract Overview
Contract Amount: $19,257,610 ($19.3M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2005-04-29
End Date: 2010-12-31
Contract Duration: 2,072 days
Daily Burn Rate: $9.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Place of Performance
Location: TUCSON, PIMA County, ARIZONA, 85756
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $19.3 million to RAYTHEON COMPANY for work described as: Key points: 1. Significant investment in Research and Development for the Physical, Engineering, and Life Sciences. 2. Sole-source award to Raytheon Company raises questions about competition and potential cost efficiencies. 3. Long contract duration (2005-2010) suggests a complex, multi-year research effort. 4. The Cost Plus Fixed Fee (CPFF) structure can incentivize cost overruns if not closely monitored.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee (CPFF) contract type, while allowing flexibility for R&D, can lead to higher costs compared to fixed-price contracts if not managed diligently. Benchmarking is difficult without specific deliverables and comparable projects.
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 may result in a higher price than if multiple vendors had competed.
Taxpayer Impact: The lack of competition for a nearly $20 million contract raises concerns about whether taxpayers received the best possible value.
Public Impact
Taxpayers funded a significant R&D effort without competitive bidding. The specific R&D outcomes and their impact on national security or technological advancement are not detailed. Long-term contracts like this require sustained oversight to ensure progress and prevent cost creep.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- CPFF contract type can lead to cost overruns.
- Lack of detailed public information on R&D outcomes.
- Long contract duration requires sustained oversight.
Positive Signals
- Award to a major defense contractor suggests potential for advanced technological development.
- Contract supports critical R&D in physical, engineering, and life sciences.
Sector Analysis
This contract falls under Research and Development in the Physical, Engineering, and Life Sciences, a sector often characterized by high innovation and significant government investment. Benchmarks are difficult without knowing the specific R&D focus.
Small Business Impact
The award to Raytheon Company, a large defense contractor, suggests that small businesses were likely not primary recipients or subcontractors on this specific contract, limiting their direct participation.
Oversight & Accountability
The sole-source nature of this contract necessitates robust oversight from the Department of the Air Force to ensure that costs are reasonable and that the R&D objectives are being met effectively.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of competition.
- Potential for cost overruns (CPFF).
- Limited transparency on R&D outcomes.
- Long contract duration.
- No small business participation indicated.
Tags
research-and-development-in-the-physical, department-of-defense, az, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $19.3 million to RAYTHEON COMPANY. See the official description on USAspending.
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 $19.3 million.
What is the period of performance?
Start: 2005-04-29. End: 2010-12-31.
What specific R&D advancements were achieved under this contract, and how do they align with the Department of Defense's strategic goals?
The provided data does not specify the exact R&D advancements. However, contracts in the 'Research and Development in the Physical, Engineering, and Life Sciences' category typically aim to push technological boundaries, improve existing systems, or develop entirely new capabilities relevant to national security. The alignment with strategic goals would require access to internal DoD planning documents and project reports.
Given the sole-source nature and CPFF structure, what mechanisms were in place to control costs and ensure fair pricing?
Sole-source contracts and CPFF structures inherently present higher cost risks. Effective cost control would rely on stringent government oversight, detailed cost proposals, regular audits, and potentially incentive clauses within the contract to reward efficiency. Without specific contract details or audit reports, it's difficult to assess the adequacy of these mechanisms.
How did the long duration of this contract impact the agility and relevance of the R&D outcomes?
Long contract durations, especially in rapidly evolving R&D fields, can be a double-edged sword. While they allow for in-depth research, they also risk the outcomes becoming outdated or less relevant by the time of completion. Agility would depend on the contract's flexibility to adapt to new findings or changing technological landscapes during its term.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D 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
Address: 1151 E HERMANS RD, TUCSON, AZ, 85706
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2005-04-29
Current End Date: 2010-12-31
Potential End Date: 2010-12-31 00:00:00
Last Modified: 2017-02-15
More Contracts from Raytheon Company
- Federal Contract — $5.7B (Department of Defense)
- TEN Fire Units for Qatar — $5.6B (Department of Defense)
- GPS Advanced Control Segment (OCX) Phase B Blocks 1 and 2 — $4.5B (Department of Defense)
- An/Spy-6(v) Hardware Production — $3.3B (Department of Defense)
- Predominant - Patriot UAE — $3.0B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)