DoD Awards Raytheon $136.5M for Electronic Equipment Repair Amidst Limited Competition

Contract Overview

Contract Amount: $136,524,039 ($136.5M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2017-10-27

End Date: 2021-10-31

Contract Duration: 1,465 days

Daily Burn Rate: $93.2K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: XBR O&S IGF::OT::IGF

Place of Performance

Location: WOBURN, MIDDLESEX County, MASSACHUSETTS, 01801

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $136.5 million to RAYTHEON COMPANY for work described as: XBR O&S IGF::OT::IGF Key points: 1. Significant contract value of $136.5 million awarded to Raytheon Company. 2. Limited competition raises questions about price discovery and potential overspending. 3. Contract duration of 1465 days suggests a long-term need for these services. 4. The sector is Other Electronic and Precision Equipment Repair and Maintenance, a critical area for defense operations.

Value Assessment

Rating: questionable

The contract type is Cost Plus Fixed Fee, which can lead to higher costs if not managed carefully. Without competitive bidding, it's difficult to assess if the $136.5 million price is reasonable compared to market rates for similar repair and maintenance services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was 'NOT COMPETED', indicating a limited competition approach. This significantly restricts the opportunity for price discovery and potentially leads to higher costs for taxpayers as the government may not secure the best possible price.

Taxpayer Impact: The lack of full and open competition for a contract of this magnitude suggests that taxpayers may be paying a premium for these services.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. The long contract duration could lock the government into potentially suboptimal pricing for an extended period. Dependence on a single contractor for critical repair services could pose a risk to national security if issues arise.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost Plus Fixed Fee contract type
Long contract duration

Positive Signals

Essential service for defense operations
Award to a major defense contractor

Sector Analysis

This contract falls under the 'Other Electronic and Precision Equipment Repair and Maintenance' sector, which is crucial for the operational readiness of defense assets. Spending benchmarks in this niche area are hard to establish without competitive data, but large contracts often indicate significant operational needs.

Small Business Impact

The data indicates this contract was awarded to Raytheon Company and does not mention any subcontracting to small businesses. Further investigation would be needed to determine if small businesses were involved or had opportunities to participate.

Oversight & Accountability

The 'NOT COMPETED' status warrants further oversight to ensure the justification for limited competition was sound and that the pricing is reasonable. Accountability for ensuring fair and competitive pricing rests with the Department of Defense contracting officers.

Related Government Programs

Other Electronic and Precision Equipment Repair and Maintenance
Department of Defense Contracting
Missile Defense Agency Programs

Risk Flags

Lack of full and open competition
Cost Plus Fixed Fee contract type
Potential for inflated pricing due to limited competition
Long contract duration without competitive re-evaluation
Absence of small business participation noted

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $136.5 million to RAYTHEON COMPANY. XBR O&S IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Missile Defense Agency).

What is the total obligated amount?

The obligated amount is $136.5 million.

What is the period of performance?

Start: 2017-10-27. End: 2021-10-31.

What was the specific justification for not competing this contract, and were alternative solutions explored?

The justification for not competing this contract is not provided in the data. Typically, reasons for limited competition include urgent and compelling needs, or the existence of only one responsible source. A thorough review would examine the documentation supporting this decision and confirm that no other qualified vendors could have provided the services, or that the time constraints precluded a competitive process.

How does the Cost Plus Fixed Fee structure impact the potential for cost overruns in this specific contract?

Cost Plus Fixed Fee (CPFF) contracts allow the contractor to recover all allowable costs plus a predetermined fixed fee. While the fee is fixed, the total cost can fluctuate based on actual expenses. This structure can incentivize contractors to control costs to maximize their profit margin (the fixed fee relative to total costs), but it also shifts some cost risk to the government if costs exceed projections.

What is the potential impact on future contract pricing if this 'not competed' award sets a precedent?

If this 'not competed' award sets a precedent without strong justification, it could lead to a decline in competitive bidding for similar services. This could result in consistently higher prices for the government and taxpayers, as contractors may face less pressure to offer competitive rates. It also reduces opportunities for new or smaller businesses to enter the market.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Other Electronic and Precision Equipment Repair and Maintenance

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HQ014718R0001

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 225 PRESIDENTIAL WAY, WOBURN, MA, 01801

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: $139,714,422

Exercised Options: $139,714,422

Current Obligation: $136,524,039

Actual Outlays: $13,423,081

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: HQ014718D0001

IDV Type: IDC

Timeline