DoD's $2.14B Block IIA AUR Contract with Raytheon: R&D Spending in Arizona
Contract Overview
Contract Amount: $2,139,893,963 ($2.1B)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2010-09-01
End Date: 2022-06-30
Contract Duration: 4,320 days
Daily Burn Rate: $495.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Official Description: BLOCK IIA AUR PRELIMINARY DESIGN
Place of Performance
Location: TUCSON, PIMA County, ARIZONA, 85756
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $2.14 billion to RAYTHEON COMPANY for work described as: BLOCK IIA AUR PRELIMINARY DESIGN Key points: 1. Significant R&D investment in advanced unmanned aircraft systems. 2. Sole-source award to Raytheon raises questions about price discovery. 3. Long contract duration (2010-2022) suggests complex development. 4. Focus on physical and engineering sciences R&D.
Value Assessment
Rating: questionable
The contract type is Cost Plus Award Fee, which can incentivize performance but may lead to higher costs if not managed tightly. Benchmarking is difficult without specific cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award. This limits price competition and relies heavily on negotiation and oversight to ensure fair pricing.
Taxpayer Impact: Lack of competition may result in higher costs for taxpayers compared to a fully competed contract.
Public Impact
Development of advanced unmanned aerial reconnaissance capabilities for national defense. Potential for technological advancements with broad applications in aerospace. Significant economic impact in Arizona through Raytheon's operations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- Cost-plus contract type can lead to cost overruns.
- Lack of transparency in pricing due to sole-source nature.
Positive Signals
- Development of critical defense technology.
- Long-term commitment to a key defense contractor.
- Potential for innovation in unmanned systems.
Sector Analysis
This contract falls under Research and Development in Physical, Engineering, and Life Sciences. Defense R&D spending is a significant portion of the federal budget, with significant investments often made through sole-source or limited competition contracts for specialized capabilities.
Small Business Impact
The data does not indicate any specific subcontracting goals or achievements for small businesses on this contract. As a sole-source award to a large prime contractor, opportunities for small businesses may be limited unless actively pursued through subcontracting.
Oversight & Accountability
The contract was managed by the Defense Contract Management Agency, suggesting oversight is in place. However, the sole-source nature and cost-plus award fee structure necessitate robust oversight to ensure cost control and performance.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competition
- Cost-plus contract type
- Potential for cost overruns
- Limited transparency in pricing
- Long contract duration may indicate development challenges
Tags
research-and-development-in-the-physical, department-of-defense, az, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $2.14 billion to RAYTHEON COMPANY. BLOCK IIA AUR PRELIMINARY DESIGN
Who is the contractor on this award?
The obligated recipient is RAYTHEON COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $2.14 billion.
What is the period of performance?
Start: 2010-09-01. End: 2022-06-30.
What was the justification for the sole-source award, and were alternative solutions considered?
Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For advanced defense systems like the Block IIA AUR, this could be due to unique technological expertise, proprietary data, or specific integration requirements. A thorough review would examine the documented justification and any market research conducted to ensure no viable competitive alternatives were overlooked.
How effectively did the Cost Plus Award Fee structure incentivize performance while controlling costs?
The effectiveness of a Cost Plus Award Fee (CPAF) contract hinges on the clarity and attainability of performance metrics and the fairness of the award fee determination. While CPAF can motivate contractors to exceed minimum requirements, poorly defined metrics or subjective evaluations can lead to inflated costs without commensurate performance gains. Detailed analysis of award fee payouts against objective performance data is crucial.
What is the long-term strategic value and potential for technology transfer from this R&D investment?
The Block IIA AUR program likely aims to advance critical unmanned aerial reconnaissance capabilities. The strategic value lies in enhancing national security and maintaining technological superiority. Potential for technology transfer exists if innovations developed under this contract have dual-use applications or can be leveraged in other defense or commercial sectors, requiring proactive management of intellectual property and dissemination strategies.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
Product/Service Code: GUIDED MISSLES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: HQ027610R0001
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: RTX Corp
Address: 1151 E HERMANS RD, TUCSON, AZ, 85756
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: $2,223,590,763
Exercised Options: $2,223,590,763
Current Obligation: $2,139,893,963
Actual Outlays: $34,250,276
Subaward Activity
Number of Subawards: 3809
Total Subaward Amount: $4,007,052,133
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2010-09-01
Current End Date: 2022-06-30
Potential End Date: 2022-06-30 00:00:00
Last Modified: 2026-01-12
More Contracts from Raytheon Company
- Federal Contract — $5.7B (Department of Defense)
- TEN Fire Units for Qatar — $5.6B (Department of Defense)
- GPS Advanced Control Segment (OCX) Phase B Blocks 1 and 2 — $4.5B (Department of Defense)
- An/Spy-6(v) Hardware Production — $3.3B (Department of Defense)
- Predominant - Patriot UAE — $3.0B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)