Raytheon Company awarded $18.9M R&D contract by DoD, spanning four years

Contract Overview

Contract Amount: $18,924,080 ($18.9M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2007-01-01

End Date: 2011-12-31

Contract Duration: 1,825 days

Daily Burn Rate: $10.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: BSA PROGRAM 1 JAN 2007 TO 31 DEC 2007

Place of Performance

Location: SPRINGFIELD, FAIRFAX County, VIRGINIA, 22150

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $18.9 million to RAYTHEON COMPANY for work described as: BSA PROGRAM 1 JAN 2007 TO 31 DEC 2007 Key points: 1. Contract awarded for research and development in physical, engineering, and life sciences. 2. This contract represents a significant investment in advanced scientific exploration. 3. The duration of the contract suggests a long-term commitment to the research objectives. 4. The 'Cost Plus Fixed Fee' pricing structure can incentivize efficient cost management. 5. The contract was not competed, raising questions about potential cost savings through competition. 6. Virginia is the stated location for this contract, potentially impacting local economic activity.

Value Assessment

Rating: fair

The contract's value of $18.9 million over four years averages to approximately $4.7 million annually. Without comparable contracts for similar R&D efforts, it is difficult to definitively benchmark the value. The 'Cost Plus Fixed Fee' (CPFF) structure means the contractor is reimbursed for allowable costs plus a fixed fee, which can be advantageous for innovative projects where costs are uncertain. However, it also carries a risk of cost overruns if not managed tightly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities or when urgency dictates a rapid award. The lack of competition means that the government did not benefit from potential price reductions or innovative solutions that might have emerged from a competitive bidding process.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government may not secure the most competitive pricing available in the market.

Public Impact

The primary beneficiaries are likely the research teams and scientific community involved in physical, engineering, and life sciences. The contract supports advanced research and development activities, potentially leading to technological advancements. The geographic impact is centered in Virginia, where the contract is managed. Workforce implications include employment for scientists, engineers, and support staff involved in the R&D projects.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in a higher price than a competed contract.
Cost Plus Fixed Fee contracts can lead to cost overruns if not rigorously monitored.
The specific R&D outcomes and their ultimate value are uncertain at the outset.

Positive Signals

Award to a known entity, Raytheon Company, suggests a level of trust in their capabilities.
The fixed fee component of the contract provides some cost certainty for the government.
The long duration indicates a commitment to achieving specific, potentially complex, research goals.

Sector Analysis

The contract falls under the Research and Development sector, specifically within NAICS code 541710. This sector is characterized by innovation and the pursuit of new knowledge. The total federal spending on R&D is substantial, with significant portions allocated to defense and scientific advancement. This contract's value, while notable, is a fraction of the overall federal R&D budget, but it contributes to the broader ecosystem of scientific discovery and technological progress.

Small Business Impact

There is no indication that this contract involved small business set-asides or subcontracting opportunities. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless Raytheon Company engages small businesses as subcontractors for specific components or services.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance with contract terms and conditions. The 'Cost Plus Fixed Fee' structure necessitates close monitoring of allowable costs and the contractor's progress towards research milestones to ensure accountability and prevent cost overruns. Transparency regarding the specific research objectives and outcomes would depend on the agency's reporting practices.

Related Government Programs

Department of Defense Research and Development Programs
Advanced Technology Development Contracts
Scientific Research Grants and Contracts

Risk Flags

Sole-source award lacks competitive pricing pressure.
Cost Plus Fixed Fee structure carries risk of cost overruns.
R&D outcomes are inherently uncertain and may not yield desired results.
Contract duration is long, requiring sustained oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.9 million to RAYTHEON COMPANY. BSA PROGRAM 1 JAN 2007 TO 31 DEC 2007

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 $18.9 million.

What is the period of performance?

Start: 2007-01-01. End: 2011-12-31.

What is Raytheon Company's track record with similar Cost Plus Fixed Fee R&D contracts with the Department of Defense?

Raytheon Company, now part of RTX, has a long history of performing complex R&D and defense-related contracts for the Department of Defense. Their experience with Cost Plus Fixed Fee (CPFF) contracts is extensive, given the nature of advanced research and development where costs can be unpredictable. While specific performance metrics for past CPFF contracts are not detailed here, Raytheon is generally considered a major defense contractor with significant technical capabilities. However, like any large contractor, past performance reviews and any incurred cost overruns or disputes on similar contracts would be crucial for a comprehensive assessment. The agency's internal contractor performance evaluation reports (e.g., CPARS) would provide more granular insights into their historical performance on such agreements.

How does the annual spending of approximately $4.7 million compare to other federal R&D contracts in the physical, engineering, and life sciences sector?

An annual spending of approximately $4.7 million for an R&D contract is considered moderate within the broader federal R&D landscape. Major defense and scientific research initiatives can command hundreds of millions or even billions of dollars annually. For instance, large-scale projects in areas like aerospace, advanced materials, or biomedical research often exceed this figure significantly. However, for specific, targeted research efforts within a particular niche of physical, engineering, or life sciences, $4.7 million per year could represent a substantial investment, sufficient to fund a dedicated team and necessary resources. Benchmarking requires comparing this contract to others with similar scope, duration, and specific scientific objectives, which are not provided in this data.

What are the primary risks associated with a sole-source 'Cost Plus Fixed Fee' R&D contract?

The primary risks associated with a sole-source 'Cost Plus Fixed Fee' (CPFF) R&D contract are twofold. Firstly, the sole-source nature eliminates the potential for competitive bidding, which can lead to a higher price for the government as there is no market pressure to offer the lowest cost. Taxpayers may end up paying more than necessary. Secondly, the CPFF structure, while providing flexibility for R&D where costs are uncertain, carries the risk of cost escalation. The contractor is reimbursed for allowable costs plus a fixed fee. If cost controls are weak or unforeseen technical challenges significantly increase expenses, the total cost to the government could exceed initial estimates, even with a fixed fee. Robust oversight and stringent cost accounting are critical to mitigate these risks.

What are the potential program effectiveness indicators for this R&D contract?

Assessing the program effectiveness of this R&D contract hinges on clearly defined objectives and measurable outcomes. Key indicators could include the successful development of prototypes, the validation of new scientific principles or technologies, the publication of research findings in peer-reviewed journals, or the successful transition of research into practical applications or follow-on development contracts. The 'effectiveness' will ultimately be judged by whether the research yields the intended advancements in physical, engineering, or life sciences, contributing to national security, technological superiority, or scientific knowledge as envisioned by the Department of Defense. Progress reports, milestone achievements, and the ultimate utility of the research outputs are crucial metrics.

How has the Department of Defense's spending on R&D contracts in the physical, engineering, and life sciences sector evolved over time?

The Department of Defense (DoD) consistently allocates a significant portion of its budget to Research and Development (R&D) across various scientific disciplines, including physical, engineering, and life sciences. Historically, DoD R&D spending has fluctuated based on geopolitical priorities, technological advancements, and overall defense budgets. In recent decades, there has been a sustained emphasis on areas like artificial intelligence, cybersecurity, advanced materials, and biotechnology, reflecting evolving threats and strategic needs. While specific year-over-year figures for the 541710 NAICS code (Research and Development in the Physical, Engineering, and Life Sciences) are not provided here, overall DoD R&D spending has generally trended upwards, albeit with periods of adjustment. This contract represents a single data point within that broader spending pattern.

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 › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 8530 ALBAN ROAD SUITE 700, SPRINGFIELD, VA, 22150

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $20,877,933

Exercised Options: $18,930,026

Current Obligation: $18,924,080

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline