DoD's $29.8M Non-Tactical Software Support Contract Awarded to Raytheon Company

Contract Overview

Contract Amount: $29,821,141 ($29.8M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2006-10-30

End Date: 2011-10-29

Contract Duration: 1,825 days

Daily Burn Rate: $16.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST NO FEE

Sector: IT

Official Description: NON-TACTICAL SOFTWARE SUPPORT

Place of Performance

Location: KEYPORT, KITSAP County, WASHINGTON, 98345

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $29.8 million to RAYTHEON COMPANY for work described as: NON-TACTICAL SOFTWARE SUPPORT Key points: 1. Significant contract value of $29.8 million for software support. 2. Raytheon Company is the sole awardee, indicating potential lack of broader competition. 3. Contract duration of 5 years (1825 days) suggests a long-term need. 4. The 'COST NO FEE' pricing structure requires careful monitoring for cost overruns.

Value Assessment

Rating: fair

The 'COST NO FEE' pricing structure is unusual and can be difficult to assess for value without more detailed cost breakdowns. Benchmarking against similar software support contracts is challenging due to the unique pricing model.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

Although advertised as full and open competition, the award to a single entity, Raytheon Company, raises questions about the effectiveness of the competition in driving down costs. The 'COST NO FEE' structure may have limited the number of competitive bids.

Taxpayer Impact: The 'COST NO FEE' structure means taxpayers bear the cost of the contractor's expenses, plus a fee. Without clear cost controls and competitive pressure, there's a risk of inefficient spending.

Public Impact

Ensures continued operational support for non-tactical software systems critical to the Navy's administrative functions. Potential for cost inefficiencies due to the 'COST NO FEE' pricing model. Limited visibility into the specific software applications supported and their criticality. The long contract duration could lead to vendor lock-in if not managed effectively.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost No Fee pricing model
Single awardee despite full and open competition
Long contract duration

Positive Signals

Addresses a critical need for software support
Awarded under full and open competition

Sector Analysis

This contract falls under Engineering Services (NAICS 541330), a broad category. The spending benchmark for IT services within the Department of Defense is substantial, and this contract represents a small fraction of that overall expenditure.

Small Business Impact

The data indicates this contract was awarded to Raytheon Company, a large business. There is no explicit information suggesting opportunities for small business participation or subcontracting within this specific award.

Oversight & Accountability

The 'COST NO FEE' pricing structure necessitates robust oversight to ensure costs are reasonable and that the contractor is not incurring unnecessary expenses. The Department of the Navy must actively monitor performance and expenditures.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Potential for cost overruns due to 'COST NO FEE' pricing.
Limited competition despite 'full and open' designation.
Lack of transparency in cost breakdown.
Risk of vendor lock-in due to long contract duration.
Difficulty in benchmarking value without detailed cost data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.8 million to RAYTHEON COMPANY. NON-TACTICAL SOFTWARE SUPPORT

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 Navy).

What is the total obligated amount?

The obligated amount is $29.8 million.

What is the period of performance?

Start: 2006-10-30. End: 2011-10-29.

How does the 'COST NO FEE' pricing model ensure value for money compared to other contract types for software support?

The 'COST NO FEE' model shifts cost risk to the government, making it difficult to ensure value without stringent oversight. Unlike fixed-price contracts, it doesn't incentivize contractor efficiency. Value is typically assessed through detailed cost audits and performance metrics, which may be less effective than competitive pricing.

What are the primary risks associated with a single awardee under a 'full and open competition' for software support?

The primary risk is a lack of competitive pressure to drive down costs and improve service quality. It can also lead to vendor lock-in, making future transitions more difficult and expensive. The government may miss out on innovative solutions or better pricing from other potential bidders.

How effective is the 'COST NO FEE' structure in ensuring the delivery of necessary software support services?

Effectiveness hinges entirely on the government's oversight capabilities. While it ensures the contractor is reimbursed for costs and receives a fee, it doesn't inherently guarantee optimal service delivery or cost control. The government must meticulously track performance and costs to ensure the services meet requirements.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0002406R3119

Offers Received: 3

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Address: 3 VAN DE GRAAF DR STE 3, BURLINGTON, MA, 01803

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $30,301,218

Exercised Options: $30,301,218

Current Obligation: $29,821,141

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4112

IDV Type: IDC

Timeline