DoD's $347.8M Raytheon Contract for Taiwan Surveillance Radar Support Lacks Competition

Contract Overview

Contract Amount: $347,768,973 ($347.8M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2017-12-29

End Date: 2023-11-30

Contract Duration: 2,162 days

Daily Burn Rate: $160.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF:OT:IGF TAIWAN SURVEILLACE RADAR PROGRAM FOLLOW ON SUPPORT

Place of Performance

Location: WOBURN, MIDDLESEX County, MASSACHUSETTS, 01801

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $347.8 million to RAYTHEON COMPANY for work described as: IGF:OT:IGF TAIWAN SURVEILLACE RADAR PROGRAM FOLLOW ON SUPPORT Key points: 1. Significant spending on a critical defense system highlights the need for robust oversight. 2. The sole reliance on Raytheon Company for this follow-on support raises concerns about potential price inflation and limited innovation. 3. Lack of competition in this contract could lead to higher costs for taxpayers and reduced strategic flexibility. 4. The 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector is vital for national security, making competitive procurement crucial.

Value Assessment

Rating: questionable

The contract's value of $347.8 million over several years for follow-on support suggests a substantial investment. Without competitive bidding, it's difficult to assess if this price reflects fair market value compared to similar specialized defense systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This method bypasses the competitive process, potentially limiting price discovery and allowing the incumbent contractor to set terms, which can negatively impact cost-effectiveness.

Taxpayer Impact: The absence of competition means taxpayers may be paying a premium for this surveillance radar support, as there was no market pressure to drive down costs.

Public Impact

Ensures continued operational capability of a key surveillance system for Taiwan's defense. Supports advanced radar technology and associated maintenance, crucial for intelligence gathering and early warning. Potential for long-term reliance on a single vendor, impacting future procurement flexibility. Highlights the strategic importance of defense partnerships and the associated financial commitments.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Sole-source award
Potential for cost overruns
Limited vendor options for future support

Positive Signals

Ensures continuity of critical surveillance capabilities
Supports a key strategic partner
Utilizes established technology and vendor relationship

Sector Analysis

This contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector, a critical area for defense spending. Benchmarks for similar sole-source contracts in this specialized field are difficult to establish without competitive data, but significant investments are common.

Small Business Impact

The data indicates this contract was awarded to Raytheon Company, a large prime contractor. There is no information provided to suggest that small businesses were involved as subcontractors or partners in this specific award, which is common for large, specialized defense contracts.

Oversight & Accountability

The 'NOT COMPETED' status warrants further scrutiny from oversight bodies to ensure the justification for a sole-source award was robust and that the pricing is reasonable. Continuous monitoring of performance and costs is essential.

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 competitive bidding
Potential for inflated pricing
Risk of vendor lock-in
Limited transparency in cost justification
Missed opportunity for innovation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $347.8 million to RAYTHEON COMPANY. IGF:OT:IGF TAIWAN SURVEILLACE RADAR PROGRAM FOLLOW ON SUPPORT

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 $347.8 million.

What is the period of performance?

Start: 2017-12-29. End: 2023-11-30.

What was the specific justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?

The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the need for seamless integration with existing systems. For this contract, the specific rationale would likely relate to Raytheon's established role in the Taiwan Surveillance Radar Program. However, without a competitive process, it's difficult to independently verify if alternative solutions or phased competition were explored to potentially introduce cost savings or foster innovation.

How does the per-unit cost or overall pricing of this contract compare to similar surveillance radar systems procured competitively by the DoD or allied nations?

Direct comparison is challenging due to the sole-source nature of this contract and the specialized requirements of the Taiwan Surveillance Radar Program. However, a benchmark analysis against other large, sole-source defense contracts for similar complex systems could reveal potential cost deviations. A thorough review by an independent cost analysis group would be necessary to determine if the pricing is fair and reasonable, considering the lack of competitive pressure.

What are the long-term implications of this sole-source award on the DoD's ability to procure advanced surveillance technology and maintain strategic flexibility?

Sole-source awards, especially for follow-on support, can create vendor lock-in, potentially limiting future technological advancements and increasing long-term costs. This can reduce the DoD's strategic flexibility in adapting to evolving threats or adopting more cost-effective solutions. It underscores the importance of strategic sourcing and exploring competitive options whenever feasible to ensure access to the best available technology at optimal prices.

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: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 225 PRESIDENTIAL WAY, WOBURN, MA, 01801

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: $377,078,576

Exercised Options: $377,078,576

Current Obligation: $347,768,973

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline