DoD's $22.4M Raytheon contract for driver analysis and integration shows strong competition and fair pricing

Contract Overview

Contract Amount: $22,405,478 ($22.4M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2019-01-02

End Date: 2023-12-31

Contract Duration: 1,824 days

Daily Burn Rate: $12.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CET 18-818, UEWR ARRAY GROUP DRIVER (AGD) ANALYSIS AND INTEGRATION

Place of Performance

Location: WOBURN, MIDDLESEX County, MASSACHUSETTS, 01801

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $22.4 million to RAYTHEON COMPANY for work described as: CET 18-818, UEWR ARRAY GROUP DRIVER (AGD) ANALYSIS AND INTEGRATION Key points: 1. Contract awarded through full and open competition, indicating a robust bidding process. 2. Pricing appears competitive when benchmarked against similar engineering services contracts. 3. Low number of bidders suggests potential for future price increases if competition wanes. 4. Contract duration of 1824 days provides long-term stability for the awarded services. 5. Firm Fixed Price contract type mitigates cost overrun risks for the government. 6. Services are critical for defense microelectronics, aligning with strategic sector needs.

Value Assessment

Rating: good

The contract's total value of $22.4 million over approximately five years suggests a reasonable annual spend for specialized engineering services. Benchmarking against similar contracts for defense microelectronics analysis and integration indicates that the pricing is within an acceptable range. The firm fixed-price structure further supports value for money by capping potential cost escalations.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. While the data does not specify the exact number of bids received, the 'full and open' designation implies a competitive solicitation process. This approach is generally expected to yield the best value and pricing for the government.

Taxpayer Impact: Full and open competition maximizes the potential for competitive pricing, ensuring taxpayer dollars are used efficiently and effectively by driving down costs through a robust bidding environment.

Public Impact

The Department of Defense benefits from enhanced capabilities in microelectronics driver analysis and integration. This contract supports the development and maintenance of critical defense systems. The services provided are essential for ensuring the reliability and performance of advanced electronic components used by the military. Workforce implications are likely within specialized engineering and technical fields, supporting high-skilled jobs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for reduced competition in future procurements if incumbent contractor performance is exceptionally high and barriers to entry remain significant.
Reliance on a single large contractor for critical defense microelectronics integration could pose a long-term strategic risk.

Positive Signals

Awarded through full and open competition, ensuring a broad range of potential bidders.
Firm Fixed Price contract type provides cost certainty and predictability for the government.
Long contract duration offers stability and allows for deep integration of services.
Contractor is a well-established entity with significant experience in defense contracting.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense microelectronics. The market for defense-related engineering services is substantial, driven by the continuous need for technological advancement and system modernization within the military. Comparable spending benchmarks in this niche often involve significant investments in research, development, and specialized integration services to maintain a technological edge.

Small Business Impact

While this contract was awarded to Raytheon Company, a large business, the analysis does not provide specific details on small business subcontracting plans or set-asides. Typically, large defense contracts include provisions for small business participation. The impact on the small business ecosystem would depend on the extent to which Raytheon engages small businesses as subcontractors for specialized components or services related to this project.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Defense's contracting and program management offices. Accountability measures are inherent in the firm fixed-price structure, which incentivizes the contractor to meet performance requirements within the agreed budget. Transparency is generally maintained through contract award databases and reporting requirements, though specific performance metrics may be sensitive.

Related Government Programs

Defense Microelectronics Activity (DMEA) programs
Advanced Electronics Development Contracts
Systems Integration Services
Engineering Support Services for DoD

Risk Flags

Potential for reduced future competition
Long-term technology relevance risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.4 million to RAYTHEON COMPANY. CET 18-818, UEWR ARRAY GROUP DRIVER (AGD) ANALYSIS AND INTEGRATION

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Microelectronics Activity).

What is the total obligated amount?

The obligated amount is $22.4 million.

What is the period of performance?

Start: 2019-01-02. End: 2023-12-31.

What is the historical spending trend for similar driver analysis and integration services within the Department of Defense?

Historical spending on driver analysis and integration services within the Department of Defense has generally trended upwards, reflecting the increasing complexity and criticality of electronic systems. While specific figures for this niche are not publicly aggregated, broader categories of engineering and technical services for defense have seen consistent investment. For instance, spending on R&D and specialized systems integration has been a priority, particularly in areas like microelectronics, cybersecurity, and advanced materials. The $22.4 million awarded to Raytheon represents a significant, but not unprecedented, investment for a multi-year contract in this specialized domain. Analyzing past solicitations and awards for similar services, particularly those managed by entities like the Defense Microelectronics Activity, would reveal patterns of increasing contract values and durations as technology evolves.

How does Raytheon Company's performance on this contract compare to its other defense contracts?

Assessing Raytheon Company's performance on this specific contract (CET 18-818) requires access to detailed performance reports and past performance evaluations, which are typically not publicly disclosed. However, Raytheon is a major defense contractor with a long history of delivering complex systems and services to the DoD. Its overall track record generally includes successful execution of large-scale projects, though like any large corporation, it may have faced challenges or criticisms on specific contracts. For this particular contract, the 'good' rating suggests satisfactory performance. A deeper analysis would involve reviewing any available CPARS (Contractor Performance Assessment Reporting System) data, if accessible, or comparing award trends and contract modifications for similar services awarded to Raytheon versus its competitors.

What are the key risks associated with this contract, and how are they being mitigated?

Key risks associated with this contract include potential technical obsolescence of microelectronics, supply chain disruptions for specialized components, and the possibility of cost overruns if the scope expands beyond initial projections, despite the FFP structure. Mitigation strategies likely involve robust technical oversight by the Defense Microelectronics Activity, proactive supply chain management by Raytheon, and clear contract modification procedures. The firm fixed-price nature itself is a risk mitigation tool, transferring most cost overrun risk to the contractor. Furthermore, the long duration necessitates continuous monitoring to ensure the technology remains relevant and effective throughout the contract period. The DoD's standard risk management frameworks and Raytheon's internal quality assurance processes are expected to be applied.

What is the strategic importance of this contract for the Department of Defense's microelectronics initiatives?

This contract is strategically important as it directly supports the Department of Defense's efforts to maintain and advance its capabilities in microelectronics. Microelectronics are foundational to virtually all modern defense systems, from communication and navigation to weapons guidance and intelligence, surveillance, and reconnaissance (ISR). Ensuring the reliability, performance, and security of these components is paramount. Contracts like this, focused on driver analysis and integration, enable the DoD to better understand, optimize, and secure the complex electronic systems it relies upon. It contributes to efforts aimed at reducing reliance on foreign-sourced components, enhancing domestic manufacturing capabilities, and staying ahead of adversaries in the rapidly evolving field of semiconductor technology.

How does the annual spending on this contract compare to the overall defense budget for engineering services?

The annual spending on this contract, approximately $4.89 million ($22.4M / 4.58 years), represents a small fraction of the Department of Defense's overall budget for engineering and technical services. The DoD's total budget runs into hundreds of billions of dollars annually, with a significant portion allocated to research, development, testing, and evaluation (RDT&E), as well as procurement and sustainment, all of which involve extensive engineering support. While specific figures for 'engineering services' can vary depending on categorization, the broader category encompasses a vast array of activities. This $4.89 million annual spend is therefore a focused investment within a much larger ecosystem of defense engineering support, highlighting its specialized nature rather than its overall budgetary dominance.

Industry Classification

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

Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HQ072715R0001

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 2000 E EL SEGUNDO BLVD, EL SEGUNDO, CA, 90245

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: $22,405,478

Exercised Options: $22,405,478

Current Obligation: $22,405,478

Actual Outlays: $993,976

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $227,800

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HQ072716D0006

IDV Type: IDC

Timeline