Raytheon Company awarded $17.6M for R&D services, highlighting long-term defense investments

Contract Overview

Contract Amount: $17,633,115 ($17.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2005-05-26

End Date: 2010-11-10

Contract Duration: 1,994 days

Daily Burn Rate: $8.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: COST PLUS AWARD FEE

Sector: R&D

Place of Performance

Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $17.6 million to RAYTHEON COMPANY for work described as: Key points: 1. Contract value represents a significant investment in advanced research and development. 2. The duration of the contract suggests a focus on long-term, complex projects. 3. Full and open competition after exclusion of sources indicates a specific, but competitive, procurement approach. 4. The cost-plus award fee structure incentivizes performance and cost control. 5. This award falls within the broader context of sustained federal spending on defense R&D. 6. The contract's performance period spans over five years, indicating substantial project scope.

Value Assessment

Rating: good

The contract value of $17.6 million over approximately five years for R&D services appears reasonable given the specialized nature of defense research. Benchmarking against similar long-term R&D contracts within the Department of Defense suggests that pricing is competitive, especially considering the potential for innovation and technological advancement. The cost-plus award fee structure allows for flexibility while incentivizing contractor performance and cost efficiency, which can lead to better value over the contract lifecycle.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while the competition was open, specific sources were initially excluded, possibly due to specialized capabilities or prior relationships. The presence of four bidders suggests a healthy level of competition for this specialized R&D requirement. This competitive environment likely contributed to price discovery and ensured that the government received proposals from multiple qualified entities.

Taxpayer Impact: The competitive nature of this award, despite initial source exclusions, suggests that taxpayer funds were likely used efficiently by fostering a bidding process that drove reasonable pricing for advanced research services.

Public Impact

Benefits the Department of Defense by advancing critical research and development capabilities. Delivers specialized research services aimed at enhancing national security technologies. Geographic impact is primarily within California, where the contractor is located. Workforce implications include employment for highly skilled scientists, engineers, and researchers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in cost-plus contracts if not rigorously managed.
Long contract duration could lead to scope creep or evolving requirements not fully captured in initial pricing.
Reliance on a single contractor for extended R&D periods may limit future innovation from alternative sources.

Positive Signals

Cost-plus award fee structure incentivizes meeting performance targets and managing costs effectively.
The competitive award process suggests a thorough vetting of capabilities and pricing.
The contract's focus on R&D aligns with strategic defense modernization goals.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The defense R&D market is characterized by high barriers to entry, significant government investment, and a focus on innovation for national security. Comparable spending benchmarks in this sector often involve multi-year, high-value contracts for advanced technology development, similar to the $17.6 million awarded here.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. The prime contractor, Raytheon Company, is a large defense firm. Subcontracting opportunities for small businesses may exist but are not explicitly detailed in the provided data. The focus on large-scale R&D often involves prime contractors with extensive resources and capabilities, potentially limiting direct opportunities for smaller firms unless they are specialized subcontractors.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The cost-plus award fee structure necessitates detailed financial and performance reporting from the contractor. Transparency is generally maintained through contract reporting mechanisms, and the Inspector General's office within the Department of Defense would have jurisdiction over any potential fraud, waste, or abuse.

Related Government Programs

Department of Defense Research and Development Programs
Advanced Technology Development Contracts
Defense Science and Technology Strategy
Aerospace and Defense Sector Spending

Risk Flags

Cost Overrun Risk
Performance Measurement Challenges
Long-Term Project Management
Technological Obsolescence

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.6 million to RAYTHEON COMPANY. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $17.6 million.

What is the period of performance?

Start: 2005-05-26. End: 2010-11-10.

What is Raytheon Company's track record with similar R&D contracts awarded by the Department of Defense?

Raytheon Company, now part of RTX Corporation, has a long and extensive history of performing research and development contracts for the Department of Defense. They are a major defense contractor known for expertise in areas such as radar systems, missile defense, cybersecurity, and advanced materials. Their track record includes numerous successful R&D awards across various defense agencies, often involving complex, long-term projects. While specific performance metrics for individual contracts are not publicly detailed, their consistent selection for high-value R&D work suggests a strong performance history and capability to meet demanding government requirements. Analysis of past performance databases and contract award histories would provide more granular insights into their success rates and adherence to schedule and budget on similar endeavors.

How does the $17.6 million contract value compare to other R&D contracts awarded by the DoD in the physical, engineering, and life sciences sector?

The $17.6 million contract value for R&D services, awarded over approximately five years, is a moderate-sized award within the broader Department of Defense R&D portfolio. The DoD invests billions annually in R&D, with contracts ranging from small, specialized research grants to multi-billion dollar programs for major weapon systems development. Contracts in the physical, engineering, and life sciences sector can vary significantly based on the technology's maturity, complexity, and strategic importance. While $17.6 million is substantial for a single contract, it represents a focused investment rather than a program of record. Benchmarking against similar 'Research and Development in the Physical, Engineering, and Life Sciences' (NAICS 541710) contracts awarded by the DoD would reveal that this value falls within a common range for targeted research efforts, particularly those involving advanced materials, engineering solutions, or scientific exploration.

What are the primary risks associated with a Cost Plus Award Fee (CPAF) contract structure for this type of R&D work?

The primary risks associated with a Cost Plus Award Fee (CPAF) contract structure for R&D work include the potential for cost overruns and the contractor's incentive to maximize costs to achieve higher award fees, especially if the performance metrics are not clearly defined or rigorously monitored. While CPAF aims to incentivize performance by offering award fees based on meeting specific criteria, there's a risk that the government may pay more than necessary if the award criteria are too lenient or if the contractor focuses on achieving the fee rather than the most cost-effective solution. For R&D, where outcomes can be uncertain, defining objective performance metrics that justify award fees can be challenging. Effective oversight and robust performance evaluation are crucial to mitigate these risks and ensure value for taxpayer money.

What does the 'Full and Open Competition After Exclusion of Sources' procurement method imply for the government's acquisition strategy?

The 'Full and Open Competition After Exclusion of Sources' (F&O CAE) procurement method implies a strategic decision by the government to initially limit the pool of potential offerors, likely due to specific technical requirements, proprietary information, or unique capabilities possessed by certain entities. However, it still mandates that the competition among the remaining eligible sources be full and open. This approach suggests that while the government may have identified a need for specialized expertise that initially narrowed the field, it still sought to ensure robust competition within that defined group to achieve the best value. It balances the need for specialized solutions with the principle of competitive procurement, aiming to prevent sole-source awards while acknowledging unique market conditions.

How has federal spending on defense R&D evolved over the past decade, and where does this contract fit in?

Federal spending on defense R&D has generally remained a significant portion of the overall defense budget over the past decade, fluctuating based on geopolitical priorities and technological advancements. While specific figures vary year to year, the DoD consistently allocates substantial resources to research, development, testing, and evaluation (RDT&E) to maintain technological superiority. This $17.6 million contract fits within this broader trend as a specific investment in advancing capabilities within the physical, engineering, and life sciences. It represents one of many individual awards that collectively contribute to the DoD's strategic R&D objectives, supporting innovation in areas critical to national security. Understanding its place requires viewing it as part of a larger, sustained commitment to defense innovation.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: BASIC RESEARCH

Offers Received: 4

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 2000 EAST EL SEGUNDO BLVD, EL SEGUNDO, CA, 36

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline