DoD's $315M Raytheon Contract for R&D: Full and Open Competition Yields Mixed Results
Contract Overview
Contract Amount: $31,507,082 ($31.5M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2005-07-11
End Date: 2011-10-31
Contract Duration: 2,303 days
Daily Burn Rate: $13.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Place of Performance
Location: MARLBOROUGH, MIDDLESEX County, MASSACHUSETTS, 01752
Plain-Language Summary
Department of Defense obligated $31.5 million to RAYTHEON COMPANY for work described as: Key points: 1. Significant investment in R&D by the Department of Defense. 2. Raytheon Company secured a large contract, indicating strong capabilities. 3. Full and open competition was utilized, suggesting a robust procurement process. 4. Contract duration of 2303 days (over 6 years) points to long-term project needs. 5. The contract type (Cost Plus Fixed Fee) can lead to cost overruns.
Value Assessment
Rating: fair
The contract's Cost Plus Fixed Fee structure, while allowing for flexibility in R&D, carries inherent risks of cost escalation. Benchmarking against similar R&D contracts is difficult without specific deliverables and performance metrics.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Full and open competition was employed, which typically fosters competitive pricing. However, the Cost Plus Fixed Fee structure may limit the direct price discovery benefits typically seen in fixed-price contracts.
Taxpayer Impact: Taxpayer funds are supporting advanced R&D, with potential long-term benefits but also the risk of inefficient spending due to the contract type.
Public Impact
Investment in advanced research and development potentially leading to technological advancements. Contract awarded to a major defense contractor, impacting the aerospace and defense sector. Long contract duration suggests sustained government need for the research outcomes. Potential for innovation that could have broader applications beyond defense.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type increases risk of cost overruns.
- Lack of specific performance metrics makes value assessment challenging.
- Long duration could lead to scope creep or outdated technology by completion.
Positive Signals
- Full and open competition utilized.
- Awarded to a reputable, large defense contractor.
- Significant investment in critical R&D area.
Sector Analysis
This contract falls under Research and Development in the Physical, Engineering, and Life Sciences sector. Spending in this area is crucial for technological advancement but can be highly variable and difficult to benchmark due to the nature of innovation.
Small Business Impact
The contract was awarded to Raytheon Company, a large prime contractor. There is no indication of subcontracting opportunities for small businesses within the provided data, suggesting limited direct small business participation.
Oversight & Accountability
The Department of the Air Force managed this contract. Oversight would focus on monitoring R&D progress, managing costs under the CPFF structure, and ensuring adherence to the contract's research objectives.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Cost overrun potential due to CPFF structure.
- Difficulty in assessing R&D value without specific deliverables.
- Long contract duration increases risk of scope creep and obsolescence.
- Limited transparency on small business participation.
- Potential for inefficient use of taxpayer funds if R&D outcomes are not realized.
Tags
research-and-development-in-the-physical, department-of-defense, ma, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $31.5 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 (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $31.5 million.
What is the period of performance?
Start: 2005-07-11. End: 2011-10-31.
What specific technological advancements were pursued under this contract, and what is their current or projected impact?
The provided data lacks specifics on the R&D focus. To assess value, details on the research objectives, milestones achieved, and the resulting technological innovations are needed. Without this, it's difficult to determine if the $315 million investment yielded proportionate advancements or strategic advantages for the Department of Defense.
How effectively did the Cost Plus Fixed Fee structure manage financial risk for the government given the contract's duration?
Cost Plus Fixed Fee contracts inherently shift significant financial risk to the government, as the contractor is reimbursed for all allowable costs plus a fixed fee. For a contract spanning over six years, the potential for cost overruns is substantial. Effective oversight would be critical to control spending and ensure the fixed fee remained appropriate relative to the effort.
Did the full and open competition process result in optimal pricing and contractor performance for this long-term R&D effort?
While full and open competition is generally preferred for achieving competitive pricing, the CPFF structure complicates this assessment. The competition likely focused on technical approach and contractor capability rather than solely price. The long duration means performance and cost management over time are key indicators of the competition's ultimate success in securing value.
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
Solicitation Procedures: BASIC RESEARCH
Offers Received: 4
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 1001 BOSTON POST RD E, MARLBOROUGH, MA, 03
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2005-07-11
Current End Date: 2011-10-31
Potential End Date: 2011-10-31 00:00:00
Last Modified: 2011-07-19
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