DoD Awards Raytheon $280M for AN/TPY-2 Development, Lacking Competition

Contract Overview

Contract Amount: $280,411,790 ($280.4M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2017-11-01

End Date: 2023-03-28

Contract Duration: 1,973 days

Daily Burn Rate: $142.1K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: US AN/TPY-2 DEVELOPMENT IGF::OT::IGF

Place of Performance

Location: WOBURN, MIDDLESEX County, MASSACHUSETTS, 01801

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $280.4 million to RAYTHEON COMPANY for work described as: US AN/TPY-2 DEVELOPMENT IGF::OT::IGF Key points: 1. Significant investment in advanced radar technology. 2. Sole reliance on Raytheon raises concerns about price discovery. 3. Potential for cost overruns given Cost Plus Award Fee structure. 4. Missile Defense Agency is the primary customer for this technology.

Value Assessment

Rating: questionable

The Cost Plus Award Fee contract type can incentivize cost growth. Without competitive bidding, it's difficult to benchmark pricing against alternatives or market rates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and may lead to higher costs for taxpayers as there is no market pressure.

Taxpayer Impact: The lack of competition suggests taxpayers may be paying a premium for this critical defense system.

Public Impact

Enhances national missile defense capabilities. Supports advanced threat detection and tracking. Contributes to technological superiority in defense systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost Plus Award Fee contract
Long contract duration

Positive Signals

Critical defense technology
Experienced contractor

Sector Analysis

This spending falls within the Defense sector, specifically in advanced radar and missile defense systems. Benchmarks for similar sole-source development contracts are difficult to establish due to their unique nature.

Small Business Impact

The contract was awarded to Raytheon Company, a large business. There is no indication of small business participation in this specific award.

Oversight & Accountability

The Missile Defense Agency is responsible for overseeing this contract. The Cost Plus Award Fee structure requires robust oversight to ensure performance and control costs.

Related Government Programs

Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Department of Defense Contracting
Missile Defense Agency Programs

Risk Flags

Sole-source award limits price competition.
Cost Plus Award Fee structure can lead to cost overruns.
Long contract duration (2017-2023) may indicate evolving requirements or slow progress.
Lack of transparency on performance metrics and award fee determination.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $280.4 million to RAYTHEON COMPANY. US AN/TPY-2 DEVELOPMENT 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 $280.4 million.

What is the period of performance?

Start: 2017-11-01. End: 2023-03-28.

What is the projected total cost of the AN/TPY-2 program over its lifecycle?

The provided data only covers a specific development contract valued at $280 million. The total lifecycle cost for the AN/TPY-2 program, including all development, production, and sustainment phases across all contracts, is not detailed here. Further investigation into broader program documentation would be needed to ascertain the full lifecycle expenditure.

How does the performance of the AN/TPY-2 system compare to similar systems developed under competitive contracts?

Direct comparison is challenging due to the sole-source nature of this award. While the AN/TPY-2 is a critical component of missile defense, its specific performance metrics and cost-effectiveness relative to potential, non-existent competitive alternatives cannot be definitively assessed from this data alone. Independent technical reviews would be necessary.

What mechanisms are in place to ensure cost control and prevent overruns in this Cost Plus Award Fee contract?

Cost Plus Award Fee contracts typically include performance incentives tied to specific metrics, which can help control costs. However, the effectiveness relies heavily on the rigor of the award fee criteria and the oversight provided by the Missile Defense Agency. Detailed review of the contract's specific award fee structure and performance monitoring reports is needed.

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: HQ014717R0012

Pricing Type: COST PLUS AWARD FEE (R)

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: $284,663,462

Exercised Options: $284,212,211

Current Obligation: $280,411,790

Actual Outlays: $7,693,308

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HQ014718D0002

IDV Type: IDC

Timeline