Raytheon Company awarded $55.2M for Ground Controlled Approach Systems, with limited competition

Contract Overview

Contract Amount: $55,209,438 ($55.2M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2021-03-11

End Date: 2026-03-31

Contract Duration: 1,846 days

Daily Burn Rate: $29.9K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: LIGHTWEIGHT DEPLOYABLE GROUND CONTROLLED APPROACH REFURB

Place of Performance

Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $55.2 million to RAYTHEON COMPANY for work described as: LIGHTWEIGHT DEPLOYABLE GROUND CONTROLLED APPROACH REFURB Key points: 1. Contract awarded to a single bidder, raising concerns about price discovery and potential overpayment. 2. The contract type (Cost Plus Fixed Fee) can incentivize cost overruns. 3. Limited competition suggests potential risks to achieving best value for taxpayer dollars. 4. The duration of the contract (over 5 years) requires careful monitoring of performance and costs. 5. The specific system being procured is critical for aviation safety and operational readiness. 6. The award is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) contract, indicating a pre-existing relationship.

Value Assessment

Rating: questionable

Benchmarking the value of this Cost Plus Fixed Fee contract is challenging due to the limited competition and the specific nature of the equipment. Without comparable bids, it's difficult to definitively assess if the pricing reflects fair market value. The fixed fee component provides some cost control, but the cost-plus aspect leaves room for potential cost increases that may not be fully justified without competitive pressure. Further analysis of historical pricing for similar systems and Raytheon's performance on prior contracts would be necessary for a more robust value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This typically occurs when only one vendor possesses the necessary technical capabilities, intellectual property, or is the incumbent provider of a critical system. The lack of competition means that the government did not benefit from a bidding process that could drive down prices and encourage innovative solutions from multiple offerors. This raises questions about whether the government secured the most advantageous terms possible.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to ensure the lowest possible price. This contract's value could be inflated without the discipline of a competitive bidding process.

Public Impact

The Department of the Air Force benefits from the modernization and sustainment of critical Ground Controlled Approach (GCA) systems. These systems are essential for safe aircraft landings in various weather conditions, directly impacting operational readiness. The contract supports the Air Force's aviation infrastructure at potentially multiple bases. The procurement may indirectly support a specialized workforce within Raytheon Company and its subcontractors involved in manufacturing and technical support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to suboptimal pricing.
Cost-plus contract type introduces risk of cost escalation.
Long contract duration requires sustained oversight to ensure performance and value.
Dependence on a single contractor for critical safety equipment.

Positive Signals

Award to an established defense contractor with existing expertise in radar and navigation systems.
Delivery order under an IDIQ contract suggests a streamlined procurement process for an existing need.
The fixed fee component provides some level of cost certainty for the contractor's profit.
The contract addresses a critical operational requirement for the Air Force.

Sector Analysis

The defense electronics sector, particularly in navigation and guidance systems, is characterized by high barriers to entry due to specialized technology and significant R&D investment. Raytheon Company is a major player in this market. Spending on such systems is crucial for maintaining military aviation capabilities. Comparable spending benchmarks would typically involve other contracts for similar radar, landing system, or air traffic control equipment, often awarded through competitive processes.

Small Business Impact

This contract was not competed and there is no indication of small business set-asides or subcontracting plans being a primary driver. As a sole-source award to a large prime contractor, the direct impact on small businesses is likely minimal unless Raytheon actively engages them for subcontracting opportunities. The absence of specific small business goals in the award details suggests that fostering the small business ecosystem was not a primary objective of this particular procurement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures would be tied to the terms and conditions of the Cost Plus Fixed Fee contract, including performance metrics and cost reporting. Transparency may be limited due to the sole-source nature, but contract modifications and performance reviews should be documented. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Air Traffic Control Equipment
Radar Systems
Navigation Systems
Aeronautical Systems Manufacturing
Defense Logistics Agency Contracts

Risk Flags

Sole-source award
Cost-plus contract type
Lack of competitive benchmarking
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $55.2 million to RAYTHEON COMPANY. LIGHTWEIGHT DEPLOYABLE GROUND CONTROLLED APPROACH REFURB

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 $55.2 million.

What is the period of performance?

Start: 2021-03-11. End: 2026-03-31.

What is Raytheon Company's track record with similar Ground Controlled Approach (GCA) systems or related navigation equipment for the Department of Defense?

Raytheon Company, now part of RTX, has a long history of providing advanced defense electronics, including radar, navigation, and air traffic control systems. They have been a significant supplier of GCA systems and components to various branches of the U.S. military. Their track record typically involves complex, high-value contracts requiring sophisticated engineering and manufacturing capabilities. While specific performance data for all past contracts isn't publicly detailed, their sustained presence as a prime contractor in this domain suggests a generally accepted level of technical proficiency and program execution. However, like any large defense contractor, they may have experienced contract challenges or performance issues on specific programs that would require deeper investigation into individual contract histories.

How does the awarded price of $55.2 million compare to similar GCA system procurements or upgrades in the last five years?

Direct price comparisons for GCA systems are difficult without knowing the exact specifications, scope of work (e.g., new systems vs. upgrades, quantity), and the specific contract type. This $55.2 million award is for a delivery order under an IDIQ, suggesting it might be for a specific set of requirements rather than a full system development. Generally, GCA systems can range from tens to hundreds of millions of dollars depending on complexity and scale. Given this is a sole-source award, it's challenging to benchmark against competitive procurements which typically yield lower prices. A thorough comparison would require access to detailed contract databases and analysis of system capabilities, quantities, and contract terms for similar procurements across different agencies and timeframes.

What are the primary risks associated with a sole-source, Cost Plus Fixed Fee (CPFF) contract for critical defense equipment like GCA systems?

The primary risks associated with a sole-source, CPFF contract are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher prices than could be achieved through a bidding process. The government may not be getting the best value for its money. Secondly, the CPFF contract type, while providing a fixed fee for the contractor's profit, allows the contractor to recover all allowable costs. This can create an incentive for the contractor to incur higher costs, as their profit margin (the fixed fee percentage) remains constant regardless of the total cost. This necessitates robust government oversight to scrutinize costs and ensure efficiency, which can be resource-intensive.

What is the expected impact of these GCA systems on the operational effectiveness and safety of the U.S. Air Force?

Ground Controlled Approach (GCA) systems are vital for ensuring the safe and efficient operation of aircraft, particularly in adverse weather conditions where instrument-based landings might be challenging or unavailable. They provide pilots with precise, voice-guided instructions for landing. For the U.S. Air Force, these systems directly enhance operational readiness by enabling aircraft to land safely at airfields regardless of visibility or weather, minimizing delays and cancellations. This is critical for mission accomplishment, rapid deployment, and maintaining pilot proficiency. The modernization or sustainment of these systems ensures the reliability and accuracy required for modern aviation operations, thereby bolstering overall flight safety and mission success rates.

How has federal spending on navigation, guidance, and control systems (NAICS 334511) trended over the past five fiscal years, and where does this contract fit?

Federal spending on Navigation, Detection, and Guidance Equipment (NAICS 334511) has generally remained substantial, reflecting the ongoing need for advanced systems in defense, aviation, and other sectors. While specific annual figures fluctuate based on major program awards and budget cycles, the overall trend indicates consistent investment. This $55.2 million contract for GCA systems represents a segment of this broader spending category. It fits within the defense sub-sector, specifically supporting the Air Force's aviation infrastructure. Its value is significant for a single delivery order but represents a fraction of the total annual federal outlays for this NAICS code, which can encompass a wide array of products from GPS receivers to complex radar and flight control systems.

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

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 350 LOWELL ST, ANDOVER, MA, 01810

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: $60,799,978

Exercised Options: $60,799,978

Current Obligation: $55,209,438

Subaward Activity

Number of Subawards: 36

Total Subaward Amount: $8,236,918

Contract Characteristics

Consolidated Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: SPRBL115D0017

IDV Type: IDC

Timeline