Raytheon Company awarded $13.7M for Software Depot Activation by the Department of the Air Force

Contract Overview

Contract Amount: $13,691,859 ($13.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2023-06-06

End Date: 2026-01-30

Contract Duration: 969 days

Daily Burn Rate: $14.1K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: SOFTWARE DEPOT ACTIVATION

Place of Performance

Location: MARLBOROUGH, MIDDLESEX County, MASSACHUSETTS, 01752

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $13.7 million to RAYTHEON COMPANY for work described as: SOFTWARE DEPOT ACTIVATION Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can lead to higher costs if not managed carefully. 2. The contract was not competed, raising questions about potential price efficiencies and market responsiveness. 3. Long performance period of 969 days suggests a significant undertaking or phased delivery. 4. The specific product service code (PSC) is missing, hindering detailed analysis of the goods/services procured. 5. Located in Massachusetts, potentially impacting local economic and workforce development. 6. This award represents a small fraction of the Department of Defense's overall IT and software spending.

Value Assessment

Rating: questionable

Without a competitive bidding process, it is difficult to benchmark the value for money. The cost-plus-fixed-fee structure necessitates robust oversight to control costs. Comparing this to similar software depot activation contracts is challenging due to the lack of competition and specific service details. The total award amount of $13.7 million appears moderate for a multi-year software development or activation project within the DoD.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This limits the opportunity for multiple vendors to bid, potentially leading to higher prices than if a competitive process had been employed. The absence of competition means the government did not benefit from the price discovery mechanisms inherent in a bidding war.

Taxpayer Impact: Sole-source awards can mean taxpayers may not be getting the best possible price for the services rendered, as there was no pressure from competing offers to drive down costs.

Public Impact

The Department of the Air Force benefits from the activation of its software depot, likely improving its operational capabilities. The contract supports the development or enhancement of critical software infrastructure for military operations. The geographic impact is concentrated in Massachusetts, where the contractor is located. Workforce implications include employment opportunities for software engineers, developers, and support staff within Raytheon Company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in suboptimal pricing for taxpayers.
Cost-plus-fixed-fee contracts require diligent oversight to prevent cost overruns.
Absence of a specific PSC code makes it difficult to assess the nature of the procurement.
The sole-source nature limits transparency into the selection process.

Positive Signals

Award to an established contractor, Raytheon Company, suggests potential for reliable execution.
The contract aims to activate a software depot, which is crucial for Air Force's technological advancement.
The fixed-fee component of the contract provides some cost certainty for the government.

Sector Analysis

This contract falls within the broader Information Technology and Software Development sector, a critical area for modern defense operations. The market for defense software development is substantial, with significant government investment. Comparable spending benchmarks are difficult to establish without more specific details on the software being activated, but large-scale software projects for the DoD often run into tens or hundreds of millions of dollars. This particular award appears to be for a specific, albeit significant, component of the Air Force's software infrastructure.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no information provided regarding subcontracting plans for small businesses. This means the primary benefits of the contract will likely accrue to the large prime contractor, Raytheon Company, with limited direct impact on the small business ecosystem unless Raytheon voluntarily engages small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Air Force. As a cost-plus-fixed-fee contract, rigorous financial oversight and performance monitoring are essential to ensure funds are used efficiently and effectively. Transparency is limited due to the sole-source nature of the award. Specific Inspector General jurisdiction would typically fall under the DoD IG, who can investigate fraud, waste, and abuse.

Related Government Programs

Department of Defense Software Modernization Programs
Air Force Cloud Computing Initiatives
Defense Information Systems Agency (DISA) Contracts
Software Development Services for Military Branches

Risk Flags

Sole-source award lacks competitive pricing.
Cost-plus-fixed-fee contract requires robust oversight.
Unclear scope due to missing PSC and unusual NAICS code.
Long performance period increases risk of obsolescence or scope creep.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.7 million to RAYTHEON COMPANY. SOFTWARE DEPOT ACTIVATION

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 $13.7 million.

What is the period of performance?

Start: 2023-06-06. End: 2026-01-30.

What is the specific nature of the 'Software Depot Activation' being procured under this contract?

The provided data does not specify the exact nature of the 'Software Depot Activation.' This could encompass a range of activities, such as establishing new software development and testing environments, migrating existing software to new platforms (e.g., cloud), implementing new software management tools, or upgrading the infrastructure of an existing software depot. Without a detailed statement of work or a specific Product Service Code (PSC), it is difficult to ascertain the precise technological and operational scope. The 'Other Communications Equipment Manufacturing' (ND: 334290) classification is unusual for a software-focused contract and may indicate a hardware component or a misclassification.

How does the $13.7 million cost compare to similar software depot activation projects within the DoD?

Benchmarking this $13.7 million contract against similar software depot activation projects is challenging due to the lack of specific details and the sole-source nature of the award. However, large-scale software infrastructure projects within the Department of Defense can range significantly in cost. Smaller, more focused activations or upgrades might fall within this price range. Larger, more comprehensive depot modernizations or new builds could easily exceed this amount by tens or hundreds of millions of dollars. The cost-plus-fixed-fee structure also means the final expenditure could vary based on actual costs incurred and the fixed fee negotiated.

What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract for software activation?

The primary risks associated with this contract type are twofold. Firstly, the sole-source nature means the government did not benefit from competitive bidding, potentially leading to a higher price than could have been achieved through open competition. This reduces price discovery and market pressure. Secondly, the cost-plus-fixed-fee (CPFF) structure, while providing some cost certainty with the fixed fee, can incentivize the contractor to incur higher costs to increase the overall contract value (though the fee itself is fixed). This necessitates stringent government oversight to monitor expenditures, ensure efficiency, and prevent unnecessary cost growth beyond the anticipated total project cost.

What is Raytheon Company's track record with similar DoD software development and infrastructure contracts?

Raytheon Company (now RTX) is a major defense contractor with extensive experience in various technology domains, including software development, systems integration, and IT infrastructure for the Department of Defense. They have a long history of executing large, complex programs across multiple military branches. While specific details on their 'software depot activation' track record are not provided here, their general experience suggests a capability to handle such projects. However, past performance on similar contracts, including their success in managing costs and meeting deadlines, would be a critical factor in assessing the risk and potential success of this specific award.

What are the potential performance implications of the 969-day duration for this contract?

The 969-day duration (approximately 2.65 years) suggests a substantial project with a phased approach to software depot activation. This extended timeline allows for detailed planning, development, testing, and deployment cycles. It can be beneficial for complex software systems that require iterative development and integration. However, a long duration also increases the risk of scope creep, technological obsolescence if not managed proactively, and the need for sustained government oversight. It implies that the activation is not a simple, off-the-shelf solution but rather a significant undertaking requiring considerable time and resources.

How does the 'Other Communications Equipment Manufacturing' (ND: 334290) classification align with a 'Software Depot Activation' contract?

The classification 'Other Communications Equipment Manufacturing' (NAICS code 334290) appears incongruous with a 'Software Depot Activation' contract. Software activation typically falls under IT services, software development, or related categories (e.g., NAICS 541511 - Custom Computer Programming Services, or 541512 - Computer Systems Design Services). The manufacturing code suggests the procurement might involve physical hardware components related to communications equipment that are integral to the software depot's function, or it could be a misclassification. This discrepancy warrants further investigation to understand the true nature of the procurement and ensure appropriate categorization for analysis and oversight.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Other Communications Equipment Manufacturing

Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS

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: 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: $13,691,859

Exercised Options: $13,691,859

Current Obligation: $13,691,859

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $999,109

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA873521D0001

IDV Type: IDC

Timeline