Raytheon Company awarded $94.26M for Silent Knight Radar (SKR) System by U.S. Special Operations Command

Contract Overview

Contract Amount: $94,260,000 ($94.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2019-06-19

End Date: 2022-05-31

Contract Duration: 1,077 days

Daily Burn Rate: $87.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SILENT KNIGHT RADAR (SKR) SYSTEM

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75071

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $94.3 million to RAYTHEON COMPANY for work described as: SILENT KNIGHT RADAR (SKR) SYSTEM Key points: 1. Contract awarded as a sole-source, indicating limited competition and potential for higher pricing. 2. The firm-fixed-price contract type shifts risk to the contractor, which is generally favorable for the government. 3. The contract duration of over 3 years suggests a significant, ongoing need for the radar system. 4. The awarded amount is substantial, requiring careful oversight to ensure value for money. 5. The system is related to search, detection, navigation, guidance, and aeronautical/nautical instruments. 6. The contract was awarded to Raytheon Company, a major defense contractor.

Value Assessment

Rating: fair

The awarded amount of $94.26 million for the Silent Knight Radar (SKR) System is a significant investment. Without specific benchmarks for this particular radar system or comparable sole-source procurements, it is difficult to definitively assess value for money. The firm-fixed-price contract type is generally advantageous for the government as it caps costs. However, the lack of competition inherent in a sole-source award raises concerns about whether the government secured the most competitive pricing possible. Further analysis would require understanding the system's unique capabilities and the market for such specialized equipment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that only one contractor, Raytheon Company, was solicited. This typically occurs when a unique capability is required, or when there is insufficient time to conduct a competitive procurement. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices through market forces. This raises questions about whether alternative solutions were considered or if the sole-source justification was robust.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to achieve lower prices, potentially resulting in higher costs for taxpayers compared to a competitively bid contract.

Public Impact

The U.S. Special Operations Command is the primary beneficiary, receiving advanced radar systems for its operations. The Silent Knight Radar (SKR) System likely enhances situational awareness and operational effectiveness for special operations forces. The contract's performance is expected to occur in Texas, as indicated by the 'ST' and 'SN' fields. The procurement supports jobs within Raytheon Company and potentially its supply chain, contributing to the defense industrial workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to inflated costs.
Lack of transparency in the sole-source justification process could obscure potential alternatives.
The significant dollar value necessitates rigorous oversight to ensure funds are used effectively.

Positive Signals

Firm-fixed-price contract type transfers cost overrun risk to the contractor.
Award to a major defense contractor like Raytheon suggests access to established technology and expertise.
The contract duration indicates a sustained commitment to a critical capability.

Sector Analysis

The defense sector, specifically the manufacturing of search, detection, navigation, guidance, aeronautical, and nautical systems, is characterized by high technological complexity and significant government investment. Contracts in this area often involve specialized, proprietary technologies developed over long periods. The market is typically dominated by a few large, established defense contractors. Benchmarking this contract's value would require comparing it to similar sole-source or limited-competition procurements for advanced radar systems within the Department of Defense, considering the specific capabilities and technological maturity of the SKR system.

Small Business Impact

There is no indication from the provided data that this contract includes small business set-asides or subcontracting requirements. As a sole-source award to a large prime contractor, the direct impact on small businesses is likely minimal unless Raytheon Company voluntarily includes them in its supply chain. Further investigation into Raytheon's subcontracting plans would be necessary to assess any indirect benefits to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the U.S. Special Operations Command and the Department of Defense. Given the sole-source nature, transparency might be limited unless specific justifications and market research details are publicly disclosed. Accountability measures would be tied to the contract's performance clauses and the firm-fixed-price structure. The Inspector General of the Department of Defense would have jurisdiction to investigate any potential fraud, waste, or abuse related to this procurement.

Related Government Programs

Defense Radar Systems Procurement
Special Operations Command Equipment Acquisition
Aeronautical and Nautical Instrument Manufacturing
Search and Detection Systems

Risk Flags

Sole-source award may indicate limited competition, potentially impacting price.
Lack of detailed justification for sole-source award requires scrutiny.
Significant contract value necessitates robust oversight to ensure value for money.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $94.3 million to RAYTHEON COMPANY. SILENT KNIGHT RADAR (SKR) SYSTEM

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 $94.3 million.

What is the period of performance?

Start: 2019-06-19. End: 2022-05-31.

What specific capabilities does the Silent Knight Radar (SKR) System offer that justify a sole-source award?

The provided data does not detail the specific capabilities of the Silent Knight Radar (SKR) System. However, sole-source awards are typically justified when a system possesses unique, proprietary technology, or when there are no other responsible sources capable of meeting the government's requirements. For advanced radar systems, this could include specialized performance characteristics, integration with existing platforms, or specific operational advantages crucial for special operations. A thorough justification would likely outline these unique attributes and demonstrate why competitive alternatives are not feasible or would be significantly detrimental to national security or mission effectiveness.

How does the $94.26 million award compare to historical spending on similar radar systems by the U.S. Special Operations Command?

Without access to historical spending data specifically for comparable radar systems procured by the U.S. Special Operations Command (SOCOM), a direct comparison is not possible. The $94.26 million figure represents a substantial investment. To assess its relative value, one would need to analyze past SOCOM procurements of advanced radar systems, considering factors like system complexity, technological generation, quantity, and contract type. If similar systems were previously acquired through competitive processes for significantly less, it would raise concerns about the current award's value. Conversely, if this represents a fair market price for a unique or upgraded capability, the award might be justified.

What are the potential risks associated with a sole-source procurement of this magnitude?

The primary risk associated with a sole-source procurement of this magnitude ($94.26 million) is the potential for inflated pricing due to the absence of competitive pressure. The government may not be receiving the best possible value for its investment. Other risks include a lack of innovation that might arise from competition, potential vendor lock-in, and the possibility that the sole-source justification was not sufficiently rigorous, potentially overlooking viable alternatives. Furthermore, sole-source contracts can sometimes be perceived as less transparent, necessitating robust internal oversight to ensure fairness and fiscal responsibility.

What is Raytheon Company's track record with the U.S. Special Operations Command and similar radar systems?

Raytheon Company is a major defense contractor with a long history of providing advanced systems, including radar, to various branches of the U.S. military, including Special Operations Command (SOCOM). While specific details of their past performance on SOCOM contracts or with the SKR system are not provided in this data, Raytheon is generally known for its technological capabilities in this domain. A comprehensive assessment would involve reviewing past performance evaluations, contract history, and any reported issues or successes related to their work with SOCOM and similar radar technologies.

What are the implications of the firm-fixed-price contract type for cost control and risk management?

The firm-fixed-price (FFP) contract type is generally considered favorable for the government in terms of cost control and risk management. Under an FFP contract, the contractor assumes the majority of the financial risk. This means that Raytheon Company is obligated to complete the work for the agreed-upon price, regardless of their actual costs. If their costs exceed the fixed price, they absorb the loss. Conversely, if their costs are lower, they retain the profit. This structure incentivizes the contractor to manage their costs efficiently and complete the project within budget, reducing the risk of cost overruns for the government.

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: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: H9222216R0005

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

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: $94,260,995

Exercised Options: $94,260,995

Current Obligation: $94,260,000

Subaward Activity

Number of Subawards: 32

Total Subaward Amount: $19,054,216

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: H9222216D0033

IDV Type: IDC

Timeline