DoD's $17.4M AWACS Combat ID contract with Raytheon faces scrutiny over limited competition and cost-plus structure

Contract Overview

Contract Amount: $17,456,133 ($17.5M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2020-08-17

End Date: 2022-09-16

Contract Duration: 760 days

Daily Burn Rate: $23.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: AIRBORNE WARNING AND CONTROL SYSTEM COMBAT IDENTIFICATION ALPHA PHASE I

Place of Performance

Location: FORT WAYNE, ALLEN County, INDIANA, 46808

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $17.5 million to RAYTHEON COMPANY for work described as: AIRBORNE WARNING AND CONTROL SYSTEM COMBAT IDENTIFICATION ALPHA PHASE I Key points: 1. The contract awarded to Raytheon Company for the AWACS Combat Identification system represents a significant investment. 2. Limited competition raises concerns about potential overspending and lack of market-driven pricing. 3. The Cost Plus Fixed Fee (CPFF) contract type can incentivize cost overruns. 4. The sector is dominated by large defense contractors, limiting opportunities for smaller, innovative firms.

Value Assessment

Rating: questionable

The $17.46 million award for the AWACS Combat Identification Alpha Phase I is a Cost Plus Fixed Fee contract. Without competitive bids, it's difficult to benchmark pricing against similar systems or market rates, raising questions about value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source or limited competition award. This lack of competition limits price discovery and may result in higher costs for the government compared to a fully competitive process.

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

Public Impact

Taxpayers may be overpaying due to the lack of competitive bidding. The reliance on a single contractor could lead to long-term dependency and reduced innovation. The effectiveness of the AWACS Combat Identification system is critical for national security, making oversight essential.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost-plus contract type
Potential for cost overruns
Limited small business participation

Positive Signals

Critical defense system development
Awarded to established defense contractor

Sector Analysis

This contract falls within the Defense sector, specifically related to aerospace and defense electronics. Spending in this area is often characterized by high R&D costs, long development cycles, and significant government oversight due to national security implications.

Small Business Impact

The data indicates no specific small business set-aside or participation. Large defense contracts like this often present challenges for small businesses to compete, potentially limiting innovation and market access.

Oversight & Accountability

The 'IN' status suggests the contract is in 'In Progress'. Oversight will be crucial to monitor costs, performance, and ensure the system meets its intended objectives, especially given the sole-source nature.

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

Sole-source award limits price competition.
Cost-plus contract type can incentivize higher costs.
Potential for cost overruns without strong oversight.
Lack of transparency in justification for non-competition.
Limited opportunity for small business innovation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.5 million to RAYTHEON COMPANY. AIRBORNE WARNING AND CONTROL SYSTEM COMBAT IDENTIFICATION ALPHA PHASE I

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 $17.5 million.

What is the period of performance?

Start: 2020-08-17. End: 2022-09-16.

What specific justifications were provided for not competing this contract, and how do they align with federal procurement regulations for sole-source awards?

Federal regulations allow for sole-source contracts under specific circumstances, such as when only one responsible source can provide the required supplies or services. The justification would need to detail why other potential sources were deemed incapable or unavailable. Without this documentation, it's difficult to assess if the non-competitive award was truly warranted or if it represents a missed opportunity for better value.

How will the Department of Defense ensure cost control and prevent potential overruns within this Cost Plus Fixed Fee (CPFF) contract structure?

Effective oversight of CPFF contracts involves rigorous monitoring of incurred costs, regular audits, and clear performance metrics. The contracting officer must establish realistic cost estimates and fee structures, and actively manage scope changes. Transparency in reporting and regular communication with the contractor are vital to identify and mitigate potential cost escalations before they significantly impact the total award value.

What are the key performance indicators (KPIs) for the AWACS Combat Identification Alpha Phase I, and how will their achievement be measured to ensure the system's effectiveness?

Key performance indicators would likely focus on the system's ability to accurately detect, identify, and track airborne threats, minimizing false positives and negatives. Measurement would involve rigorous testing and validation protocols, potentially including simulated combat scenarios and real-world operational assessments. Success would be defined by meeting specific thresholds for detection range, identification accuracy, and system reliability under various operational conditions.

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: ELECTRICAL/ELECTRONIC EQPT COMPNTS

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: 1010 PRODUCTION RD, FORT WAYNE, IN, 46808

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: $32,858,170

Exercised Options: $32,858,170

Current Obligation: $17,456,133

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $1,076,259

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline