Raytheon Company Awarded $154.8M for Missile Defense Equipment Repair and Maintenance

Contract Overview

Contract Amount: $154,835,646 ($154.8M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2017-10-27

End Date: 2022-06-10

Contract Duration: 1,687 days

Daily Burn Rate: $91.8K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: INFRASTRUCTURE IGF::OT::IGF

Place of Performance

Location: WOBURN, MIDDLESEX County, MASSACHUSETTS, 01801

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $154.8 million to RAYTHEON COMPANY for work described as: INFRASTRUCTURE IGF::OT::IGF Key points: 1. Significant contract value of $154.8 million awarded to Raytheon Company. 2. Contract is for 'Other Electronic and Precision Equipment Repair and Maintenance' (NAICS 811219). 3. Awarded as a Delivery Order under an unspecified contract. 4. The contract duration is 1687 days, spanning from October 2017 to June 2022. 5. No small business participation was indicated.

Value Assessment

Rating: questionable

The contract type is Cost Plus Incentive Fee (CPIF), which can lead to cost overruns if not managed carefully. Without a competitive benchmark, assessing the value for money is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not competed, suggesting it was likely awarded under specific circumstances, possibly as a sole-source or limited competition delivery order. This lack of competition limits price discovery and potentially increases costs.

Taxpayer Impact: The absence of competition for a contract of this magnitude raises concerns about potential overspending of taxpayer funds.

Public Impact

Ensures continued operational readiness of critical missile defense systems. Supports advanced technological maintenance and repair services. Potential for cost inefficiencies due to non-competitive award. Lack of transparency in pricing mechanisms for taxpayer funds.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award
Cost Plus Incentive Fee contract type
Lack of small business participation
Long contract duration without clear competition

Positive Signals

Supports critical defense infrastructure
Awarded to a known defense contractor

Sector Analysis

This contract falls under the broader defense sector, specifically focusing on the maintenance and repair of electronic and precision equipment for missile defense systems. Spending benchmarks for similar specialized repair services can vary widely based on technology and criticality.

Small Business Impact

The data indicates no small business participation in this contract. This suggests that the prime contractor, Raytheon, likely performed the work directly or subcontracted to other large businesses, missing an opportunity to engage small businesses.

Oversight & Accountability

The non-competitive nature of this award warrants further oversight to ensure fair pricing and efficient use of taxpayer funds. Accountability for cost control under the CPIF structure is crucial.

Related Government Programs

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

Risk Flags

Non-competitive award
Cost Plus Incentive Fee contract type
Lack of transparency in pricing
No small business participation
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $154.8 million to RAYTHEON COMPANY. INFRASTRUCTURE 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 $154.8 million.

What is the period of performance?

Start: 2017-10-27. End: 2022-06-10.

What specific justification was provided for not competing this significant contract, and how was the pricing determined to be fair and reasonable?

The justification for not competing this contract is not detailed in the provided data. Typically, non-competitive awards are made under specific circumstances like urgent needs, sole-source availability of the required service, or when only one source can meet the requirement. The pricing for Cost Plus Incentive Fee contracts is established through negotiation, aiming for a target cost and fee, with adjustments based on performance against targets. Without the justification and negotiation details, assessing fairness is challenging.

What are the potential risks associated with a Cost Plus Incentive Fee contract for specialized equipment repair, especially when awarded non-competitively?

CPIF contracts carry inherent risks of cost overruns, as the contractor is incentivized to exceed target costs if the government shares in the savings or pays a higher fee for exceeding targets. When awarded non-competitively, the government lacks the leverage of market competition to negotiate favorable terms, potentially leading to higher costs and reduced efficiency. Oversight is critical to ensure the contractor is not incentivized to inflate costs.

How does the lack of small business subcontracting impact the overall effectiveness and economic benefit of this defense spending?

The absence of small business subcontracting means that a portion of the $154.8 million contract value did not flow down to smaller enterprises, which are often crucial for innovation and economic growth. This limits opportunities for small businesses to gain experience and revenue, potentially concentrating contract dollars among larger firms. Effective utilization of small businesses can enhance competition and provide specialized capabilities.

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 INCENTIVE FEE (V)

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: $159,861,435

Exercised Options: $159,861,435

Current Obligation: $154,835,646

Actual Outlays: $62,370

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