DoD's $7.78M Raytheon Contract for MEECN Program Upgrade Lacks Competition

Contract Overview

Contract Amount: $7,783,721 ($7.8M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2019-08-21

End Date: 2023-02-21

Contract Duration: 1,280 days

Daily Burn Rate: $6.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: MINUTEMAN MINIMUM ESSENTIAL EMERGENCY COMMUNICATIONS NETWORK (MEECN)PROGRAM UPGRADE (MMPU)INTERIM CONTRACTOR SUPPORT (ICS) II

Place of Performance

Location: MARLBOROUGH, MIDDLESEX County, MASSACHUSETTS, 01752

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $7.8 million to RAYTHEON COMPANY for work described as: MINUTEMAN MINIMUM ESSENTIAL EMERGENCY COMMUNICATIONS NETWORK (MEECN)PROGRAM UPGRADE (MMPU)INTERIM CONTRACTOR SUPPORT (ICS) II Key points: 1. The contract awarded to Raytheon Company for the MEECN Program Upgrade is a sole-source award, indicating a lack of competitive bidding. 2. The total value of $7.78 million for interim contractor support suggests a significant investment in maintaining critical communication infrastructure. 3. The 'NOT COMPETED' status raises concerns about potential overpricing and the absence of market-driven cost efficiencies. 4. The sector is dominated by large defense contractors, making it challenging for smaller, innovative firms to enter. 5. The contract duration of 1280 days (approx. 3.5 years) indicates a long-term need for this specialized support.

Value Assessment

Rating: questionable

The contract type is Cost Plus Fixed Fee, which can incentivize contractors to increase costs to achieve a higher fixed fee. Without competitive benchmarks, assessing the fairness of the $7.78 million price is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, meaning Raytheon Company was the only source considered. This limits price discovery and potentially leads to higher costs for the government compared to a competitive process.

Taxpayer Impact: The lack of competition may result in taxpayers paying more than necessary for this critical communication system upgrade.

Public Impact

Ensures the continued operation and upgrade of the Minimum Essential Emergency Communications Network (MEECN), vital for national security. Supports the Department of the Air Force's readiness and ability to communicate under various conditions. Potential for increased costs due to the sole-source nature of the award, impacting the efficient use of taxpayer funds.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
Cost Plus Fixed Fee contract type can incentivize cost overruns.
Lack of transparency in pricing due to no-bid award.

Positive Signals

Supports critical national security communication infrastructure.
Awarded to a known defense contractor with relevant expertise.

Sector Analysis

This contract falls within the Defense sector, specifically supporting critical communication infrastructure. Spending in this area is often characterized by sole-source or limited competition due to specialized requirements and national security implications. Benchmarks are difficult to establish without comparable competitive contracts.

Small Business Impact

The contract was awarded to Raytheon Company, a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award, which is common for large sole-source defense contracts.

Oversight & Accountability

The 'NOT COMPETED' status suggests that standard competitive oversight processes may have been bypassed. Further review would be needed to understand the justification for the sole-source award and ensure appropriate accountability for the funds expended.

Related Government Programs

Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Lack of competition
Potential for cost overruns
Limited price transparency
Risk of suboptimal technological solutions
No small business participation evident

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $7.8 million to RAYTHEON COMPANY. MINUTEMAN MINIMUM ESSENTIAL EMERGENCY COMMUNICATIONS NETWORK (MEECN)PROGRAM UPGRADE (MMPU)INTERIM CONTRACTOR SUPPORT (ICS) II

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 $7.8 million.

What is the period of performance?

Start: 2019-08-21. End: 2023-02-21.

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

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. For the MEECN Program Upgrade, the Air Force likely cited specific technical requirements or existing system integration challenges that only Raytheon could address. However, without access to the official justification document, it's impossible to confirm the exact reasons or whether less restrictive competitive approaches were explored and deemed infeasible.

How does the Cost Plus Fixed Fee structure impact the government's ability to control costs for this $7.78 million contract, especially given the lack of competition?

The Cost Plus Fixed Fee (CPFF) contract type reimburses the contractor for allowable costs plus a fixed fee representing profit. While the fee is fixed, the total cost is not. This structure can incentivize contractors to increase costs to maximize their return if the fixed fee is a significant portion of the total expected cost. In a sole-source scenario, the government lacks a competitive benchmark to validate the reasonableness of the costs incurred, making cost control more challenging and increasing the risk of overpayment.

What are the long-term implications for the MEECN program's technological advancement and cost-effectiveness given this sole-source award?

Sole-source awards can stifle innovation by removing the competitive pressure that drives contractors to offer more advanced solutions at lower prices. For the MEECN program, this could mean slower technological upgrades or higher long-term operational costs. While Raytheon may possess unique expertise, the absence of competition might prevent the government from benefiting from potentially disruptive technologies or more cost-effective solutions that other firms could offer if given the opportunity.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

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: RTX Corp

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: $8,668,358

Exercised Options: $8,668,358

Current Obligation: $7,783,721

Actual Outlays: $571,696

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline