Raytheon Company awarded $83.4M for radar testing services, supporting critical missile defense systems

Contract Overview

Contract Amount: $83,365,945 ($83.4M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2018-01-12

End Date: 2021-04-30

Contract Duration: 1,204 days

Daily Burn Rate: $69.2K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: TEST IGF::OT::IGF CONTRACT PROVIDES THE SERVICES REQUIRED TO MEET THE AGENCY'S NEEDS FOR TESTING OF AN/TPY-2, UEWR, AND CD RADARS. IGF::OT::IGF

Place of Performance

Location: WOBURN, MIDDLESEX County, MASSACHUSETTS, 01801

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $83.4 million to RAYTHEON COMPANY for work described as: TEST IGF::OT::IGF CONTRACT PROVIDES THE SERVICES REQUIRED TO MEET THE AGENCY'S NEEDS FOR TESTING OF AN/TPY-2, UEWR, AND CD RADARS. IGF::OT::IGF Key points: 1. Contract provides essential testing for AN/TPY-2, UEWR, and CD radars, crucial for national security. 2. Full and open competition suggests a robust market for these specialized engineering services. 3. The contract's duration of over 1000 days indicates a long-term need for sustained support. 4. Cost Plus Award Fee (CPA) structure incentivizes performance while managing costs. 5. Missile Defense Agency's reliance on this contract highlights its strategic importance. 6. Engineering services sector is vital for maintaining advanced defense technology.

Value Assessment

Rating: good

The contract value of $83.4 million over approximately three years appears reasonable for specialized engineering services supporting complex radar systems. Benchmarking against similar contracts for defense system testing and maintenance is challenging without more specific data on the scope of work. However, the Cost Plus Award Fee (CPA) structure allows for performance-based incentives, which can drive value for money if managed effectively. The absence of significant overruns or performance issues in publicly available data suggests a generally good value proposition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The specific number of bidders is not provided, but the open competition suggests a healthy market for these specialized engineering services. This process is designed to foster price discovery and ensure the government receives competitive pricing and the best available technical solutions.

Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and access to a wider range of innovative solutions, ensuring that defense funds are used efficiently.

Public Impact

The primary beneficiaries are the Department of Defense and the Missile Defense Agency, ensuring the operational readiness of critical radar systems. Services delivered include essential testing and engineering support for advanced radar technologies. The geographic impact is primarily within the United States, supporting domestic defense infrastructure. Workforce implications include employment for highly skilled engineers and technicians specializing in radar systems and defense technology.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee contracts can sometimes lead to cost overruns if not closely monitored.
The specialized nature of the services may limit the pool of qualified contractors in future competitions.
Dependence on a single contractor for critical testing could pose a long-term risk if not managed proactively.

Positive Signals

Awarded under full and open competition, indicating a competitive marketplace.
The Cost Plus Award Fee structure incentivizes contractor performance and efficiency.
The contract supports vital national security assets, demonstrating its strategic importance.
Long contract duration suggests a stable and predictable need for these services.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting the defense industry's need for specialized testing and maintenance of complex electronic systems. The market for defense engineering services is substantial, driven by continuous technological advancement and the need to maintain aging and new military platforms. Comparable spending benchmarks would typically be found within broader defense procurement data for radar systems and related electronic warfare capabilities.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Given the specialized nature of radar testing and the prime contractor's likely capabilities, it is probable that any subcontracting opportunities would be for highly specialized components or services. The impact on the small business ecosystem is likely minimal for the prime contract itself, but potential for specialized niche suppliers to engage in subcontracting exists.

Oversight & Accountability

Oversight for this contract would typically be managed by the Missile Defense Agency's contracting officers and program managers. Accountability measures are embedded within the Cost Plus Award Fee structure, which links contractor payment to performance metrics. Transparency is generally maintained through contract award databases and reporting requirements, though specific performance details may be sensitive. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Missile Defense Systems
Radar Technology Development
Electronic Warfare Systems
Defense Engineering Services
Advanced Technology Testing

Risk Flags

Potential for technology obsolescence during contract term.
Risk of performance degradation over extended contract duration.
Dependency on a single contractor for critical testing functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $83.4 million to RAYTHEON COMPANY. TEST IGF::OT::IGF CONTRACT PROVIDES THE SERVICES REQUIRED TO MEET THE AGENCY'S NEEDS FOR TESTING OF AN/TPY-2, UEWR, AND CD RADARS. 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 $83.4 million.

What is the period of performance?

Start: 2018-01-12. End: 2021-04-30.

What is the historical spending trend for radar testing services by the Missile Defense Agency?

Analyzing historical spending trends for radar testing services by the Missile Defense Agency requires access to detailed procurement data over multiple fiscal years. Without specific historical data for this contract category, it's difficult to provide a precise trend. However, generally, spending in defense-related engineering services, particularly those supporting critical systems like missile defense, tends to be relatively stable or increase gradually, driven by modernization efforts, sustainment requirements, and evolving threat landscapes. Fluctuations can occur based on specific program milestones, budget allocations, and the introduction of new technologies. A comprehensive analysis would involve aggregating data for similar contracts awarded over the past 5-10 years to identify patterns in award values, contract durations, and the number of competitors.

How does the awarded amount compare to the initial estimated cost or ceiling for this contract?

The provided data indicates an awarded amount of $83,365,945.30. However, it does not include information about the initial estimated cost or the contract's ceiling value. For Cost Plus Award Fee (CPA) contracts, there is typically a target cost and a ceiling cost. The final amount paid can vary based on the contractor's performance against defined award criteria, up to the ceiling. To assess how the awarded amount compares to the initial estimates or ceiling, one would need access to the contract's detailed financial documentation or award modification history. Without this, it's impossible to determine if the contract was awarded at the low end, high end, or within the expected range of its potential value.

What are the specific performance metrics used in the Cost Plus Award Fee (CPA) structure for this contract?

The specific performance metrics that dictate the 'award fee' component of this Cost Plus Award Fee (CPA) contract are not detailed in the provided summary data. Typically, for defense contracts involving complex engineering and testing services, performance metrics can include factors such as adherence to schedule, quality of test results, technical accuracy, responsiveness to agency requests, cost control relative to target costs, and successful completion of specific testing milestones. The Missile Defense Agency would have established a detailed Performance Requirements Document (PRD) or similar document outlining these metrics and the associated fee structure. These metrics are crucial for incentivizing the contractor to achieve desired outcomes beyond just meeting minimum requirements.

What is Raytheon Company's track record with the Missile Defense Agency for similar radar testing services?

Raytheon Company, now part of RTX, has a significant and long-standing track record as a major defense contractor, including extensive work with the Missile Defense Agency (MDA). They are a key provider of radar systems, including the AN/TPY-2 radar, which is a component of the Terminal High Altitude Area Defense (THAAD) system and the Ballistic Missile Defense System (BMDS). Their involvement in developing, producing, and supporting these critical systems implies a deep understanding of the required testing and engineering services. While specific performance details on past contracts are often proprietary, Raytheon's continued selection for significant MDA programs suggests a generally positive performance history and established capability in meeting the agency's complex requirements for radar technology.

Are there any identified risks associated with the long duration of this contract (over 1000 days)?

The long duration of this contract, approximately 1204 days (around 3.3 years), presents several potential risks. Firstly, technology obsolescence is a concern; radar technology evolves rapidly, and systems tested under this contract might require updates or modifications during its term, potentially leading to scope changes or increased costs. Secondly, contractor performance can degrade over extended periods if oversight is not consistently rigorous. Maintaining motivation and focus on quality can be challenging. Thirdly, market conditions and the competitive landscape can shift, potentially making the pricing less favorable over time compared to newer, potentially more efficient technologies or service providers that emerge. Finally, long-term reliance on a single contractor for critical testing could create dependency and reduce flexibility for the agency.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HQ014716R0051

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: $98,495,085

Exercised Options: $98,495,085

Current Obligation: $83,365,945

Actual Outlays: $2,606,161

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HQ014718D0003

IDV Type: IDC

Timeline