DoD's $35M Raytheon Contract for Special Ops Software Development Lacks Competition
Contract Overview
Contract Amount: $35,094,953 ($35.1M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2019-02-14
End Date: 2026-09-24
Contract Duration: 2,779 days
Daily Burn Rate: $12.6K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: PHASE II SKR SOFTWARE DEVELOPMENT
Place of Performance
Location: MCKINNEY, COLLIN County, TEXAS, 75071
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $35.1 million to RAYTHEON COMPANY for work described as: PHASE II SKR SOFTWARE DEVELOPMENT Key points: 1. Significant investment of $35.1M in specialized software for U.S. Special Operations Command. 2. Sole-source award to Raytheon Company raises concerns about price discovery and potential overspending. 3. Contract duration extends to September 2026, indicating a long-term commitment. 4. The sector is IT, specifically Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing.
Value Assessment
Rating: questionable
The contract type is Cost Plus Fixed Fee, which can lead to higher costs if not carefully managed. Without competitive bidding, it's difficult to benchmark pricing against similar contracts to ensure value for money.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, meaning Raytheon Company was the only source considered. This lack of competition limits price discovery and may result in higher costs for taxpayers.
Taxpayer Impact: The absence of competition for a $35.1M contract could lead to inefficient use of taxpayer funds.
Public Impact
Enhances critical capabilities for U.S. Special Operations Command. Potential for advanced technology development in navigation and guidance systems. Long-term contract may ensure sustained support for vital operational needs.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost Plus Fixed Fee contract type
- Long contract duration
Positive Signals
- Supports critical Special Operations Command needs
- Potential for technological advancement
Sector Analysis
This contract falls within the IT sector, specifically focusing on advanced system and instrument manufacturing for navigation and guidance. Spending in this niche area is often driven by specialized defense requirements, making direct comparisons challenging.
Small Business Impact
The contract was awarded to Raytheon Company and there is no indication of small business involvement. The sole-source nature of the award further suggests limited opportunities for small businesses to participate.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure costs are reasonable and performance meets expectations. Transparency in reporting and regular performance reviews are crucial.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- U.S. Special Operations Command Programs
Risk Flags
- Lack of competitive bidding
- Cost Plus Fixed Fee contract type
- Potential for cost overruns
- Limited transparency in pricing
- Long contract duration without re-evaluation
Tags
search-detection-navigation-guidance-aer, department-of-defense, tx, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $35.1 million to RAYTHEON COMPANY. PHASE II SKR SOFTWARE DEVELOPMENT
Who is the contractor on this award?
The obligated recipient is RAYTHEON COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (U.S. Special Operations Command).
What is the total obligated amount?
The obligated amount is $35.1 million.
What is the period of performance?
Start: 2019-02-14. End: 2026-09-24.
How can the Department of Defense ensure fair pricing and value for money on sole-source contracts like this one?
The DoD can employ robust cost analysis techniques, independent government cost estimates, and thorough negotiation strategies. Engaging third-party experts for technical and cost reviews can also provide an objective assessment. Furthermore, establishing clear performance metrics and incentivizing efficiency within the contract terms can help mitigate risks associated with sole-source awards.
What are the primary risks associated with awarding a large, multi-year contract on a sole-source basis?
The primary risks include inflated pricing due to the lack of competitive pressure, potential for scope creep without competitive re-evaluation, and reduced innovation as the contractor may face less incentive to improve efficiency or offer novel solutions. There's also a risk of vendor lock-in, making it difficult to switch providers or adopt alternative technologies in the future.
How does this contract contribute to the overall effectiveness of U.S. Special Operations Command's missions?
This contract likely provides critical software for advanced search, detection, navigation, and guidance systems essential for the unique and often high-stakes missions undertaken by U.S. Special Operations Command. The development of specialized software ensures that operators have access to cutting-edge tools necessary for situational awareness, mission planning, and successful execution in complex environments.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: H9222217R0029
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Rockwell Collins Australia PTY Limited
Address: 2501 W UNIVERSITY DR, MCKINNEY, TX, 75070
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: $41,643,170
Exercised Options: $41,643,170
Current Obligation: $35,094,953
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $60,750
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: H9222218D0003
IDV Type: IDC
Timeline
Start Date: 2019-02-14
Current End Date: 2026-09-24
Potential End Date: 2026-09-24 00:00:00
Last Modified: 2025-09-26
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