DoD Awards Raytheon $87M for AN/TPY-2 Radar Development, Lacking Competition
Contract Overview
Contract Amount: $87,045,582 ($87.0M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2019-06-06
End Date: 2024-10-31
Contract Duration: 1,974 days
Daily Burn Rate: $44.1K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS AWARD FEE
Sector: IT
Official Description: US AN/TPY-2 DEVELOPMENT
Place of Performance
Location: WOBURN, MIDDLESEX County, MASSACHUSETTS, 01801
Plain-Language Summary
Department of Defense obligated $87.0 million to RAYTHEON COMPANY for work described as: US AN/TPY-2 DEVELOPMENT Key points: 1. Significant investment in advanced radar technology. 2. Sole reliance on Raytheon raises concerns about price discovery. 3. Potential for cost overruns due to Cost Plus Award Fee contract type. 4. Missile Defense Agency is the primary beneficiary. 5. Long-term contract duration of 1974 days.
Value Assessment
Rating: questionable
The Cost Plus Award Fee contract structure, combined with a lack of competition, makes it difficult to benchmark pricing effectively against similar contracts. The award fee component could incentivize cost increases if not managed stringently.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs for taxpayers as there is no competitive pressure to drive down prices.
Taxpayer Impact: The lack of competition on this $87 million contract means taxpayers may be paying a premium for the AN/TPY-2 radar development.
Public Impact
Enhances national missile defense capabilities. Supports critical military intelligence and early warning systems. Long-term development project impacting defense readiness. Potential for technological advancements in radar systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost Plus Award Fee contract
- Long contract duration
- No small business participation noted
Positive Signals
- Critical defense technology development
- Potential for technological advancement
Sector Analysis
This contract falls within the IT and Defense sectors, specifically in the manufacturing of search, detection, and navigation systems. Spending benchmarks for similar sole-source radar development contracts are difficult to ascertain due to the specialized nature and lack of public data.
Small Business Impact
There is no indication of small business participation in this contract. Given the specialized nature of advanced radar development and the sole-source award to a large prime contractor, opportunities for small businesses appear limited.
Oversight & Accountability
The Department of Defense, specifically the Missile Defense Agency, is responsible for oversight. The sole-source nature of the award warrants close scrutiny to ensure fair pricing and effective program execution.
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 contract can incentivize higher costs.
- Lack of transparency in award justification.
- No apparent small business participation.
- Long contract duration may indicate complexity or potential delays.
Tags
search-detection-navigation-guidance-aer, department-of-defense, ma, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $87.0 million to RAYTHEON COMPANY. US AN/TPY-2 DEVELOPMENT
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 $87.0 million.
What is the period of performance?
Start: 2019-06-06. End: 2024-10-31.
What specific factors justified the sole-source award for the AN/TPY-2 radar development, and how were these documented?
Justification for sole-source awards typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Documentation would likely include market research, technical assessments, and a formal justification for other than full and open competition (J&A). Without access to these documents, the specific rationale remains unclear, but it's crucial for ensuring taxpayer value.
How will the performance incentives within the Cost Plus Award Fee contract be structured to ensure cost control and mission effectiveness?
The effectiveness of the Cost Plus Award Fee (CPAF) contract hinges on well-defined performance metrics and award fee criteria. These should be directly tied to achieving specific technical milestones, delivery schedules, and overall system performance. Robust oversight is needed to ensure the 'award' portion genuinely reflects exceptional performance and doesn't simply incentivize cost accumulation.
What is the projected long-term sustainment cost and potential for upgrades for the AN/TPY-2 system developed under this contract?
The initial development contract focuses on building and refining the system. Long-term sustainment and upgrade costs are separate considerations, often addressed through subsequent contracts. Understanding these future costs is vital for a complete lifecycle cost assessment. The current data does not provide insights into these future expenditures, which could significantly impact the total ownership cost.
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: RTX Corp
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: $87,449,036
Exercised Options: $87,449,036
Current Obligation: $87,045,582
Actual Outlays: $5,259,641
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $46,048
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
Start Date: 2019-06-06
Current End Date: 2024-10-31
Potential End Date: 2024-10-31 00:00:00
Last Modified: 2025-11-06
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