DoD's $25M Raytheon Contract for BEAM STEERING UNIT CABINETS Shows Strong Competition and Engineering Focus

Contract Overview

Contract Amount: $25,173,487 ($25.2M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2019-09-12

End Date: 2024-09-11

Contract Duration: 1,826 days

Daily Burn Rate: $13.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: CET 19-936, UEWR BEAM STEERING UNIT (BSU) CABINETS ANALYSIS AND INTEGRATION

Place of Performance

Location: WOBURN, MIDDLESEX County, MASSACHUSETTS, 01801

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $25.2 million to RAYTHEON COMPANY for work described as: CET 19-936, UEWR BEAM STEERING UNIT (BSU) CABINETS ANALYSIS AND INTEGRATION Key points: 1. Contract awarded through full and open competition, indicating a robust bidding process. 2. Engineering services focus suggests a need for specialized technical expertise. 3. Long duration of nearly 5 years points to a significant, ongoing requirement. 4. Cost-plus fixed fee structure may incentivize contractor efficiency. 5. Prime contractor Raytheon Company has a substantial presence in the defense sector. 6. The contract's value is moderate within the context of large defense procurements.

Value Assessment

Rating: good

The contract value of $25.17 million over approximately five years appears reasonable for specialized engineering services. Benchmarking against similar complex engineering and integration contracts within the Department of Defense suggests this pricing is within expected ranges. The cost-plus fixed fee (CPFF) award type, while requiring careful oversight, can be effective for projects with evolving technical requirements, aiming to balance contractor risk and reward.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple capable vendors were invited to bid. The presence of a competitive bidding process is a positive indicator for price discovery and ensures that the government receives proposals from a wide range of potential suppliers. The specific number of bidders is not detailed, but the designation implies a healthy level of market interest and capability.

Taxpayer Impact: Full and open competition generally leads to more competitive pricing, potentially saving taxpayer dollars by ensuring the government secures the best value through a rigorous selection process.

Public Impact

The Department of Defense benefits from advanced engineering and integration services for critical defense systems. This contract supports the development and sustainment of specialized electronic components, likely for advanced military platforms. The contract's impact is primarily national, supporting defense readiness and technological superiority. Workforce implications include employment for highly skilled engineers and technicians within Raytheon Company and its potential subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus fixed fee contracts require diligent oversight to manage costs and prevent scope creep.
Long contract durations can sometimes lead to price increases if not managed effectively.
Reliance on a single prime contractor for complex integration may pose risks if key personnel depart.

Positive Signals

Awarded through full and open competition, indicating a competitive market for these services.
The contract's focus on engineering services suggests a commitment to technical excellence.
The long-term nature of the contract provides stability for critical defense system development.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a critical component of the broader defense industrial base. The market for specialized defense engineering is characterized by high barriers to entry due to technical expertise, security clearances, and established relationships. Spending in this area is driven by the need for continuous innovation and modernization of military hardware and systems. Comparable spending benchmarks would typically involve other large-scale engineering support contracts for major defense platforms.

Small Business Impact

The provided data indicates that small business participation (SB set-aside and subcontracting) was not a specific requirement or focus for this particular contract award (SS: false, SB: false). While Raytheon Company is a large prime contractor, the absence of explicit small business set-aside provisions means that opportunities for small businesses would likely be through subcontracting if they possess the specialized capabilities required by the prime. Further analysis would be needed to determine if subcontracting goals were established or met.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Defense's contracting officers and program managers. The Cost Plus Fixed Fee (CPFF) structure necessitates robust financial and performance monitoring to ensure costs are reasonable and allocable, and that the fixed fee is earned appropriately. Transparency is generally maintained through contract reporting mechanisms, though specific details of ongoing oversight activities are typically internal. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Engineering Services
Advanced Electronics Manufacturing
Military Systems Integration
Department of Defense Research and Development

Risk Flags

Cost-plus contracts require diligent oversight.
Long contract duration may expose to economic fluctuations.
Potential for scope creep in engineering services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.2 million to RAYTHEON COMPANY. CET 19-936, UEWR BEAM STEERING UNIT (BSU) CABINETS 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 $25.2 million.

What is the period of performance?

Start: 2019-09-12. End: 2024-09-11.

What is Raytheon Company's track record with similar Department of Defense engineering contracts?

Raytheon Company, now part of RTX, has an extensive and long-standing track record with the Department of Defense, frequently securing large and complex contracts across various defense platforms and technologies. Their history includes significant work in areas such as missile systems, radar, electronic warfare, and command and control systems. This includes numerous engineering services contracts, often involving complex integration, analysis, and development. While specific performance metrics for past contracts are not detailed here, their consistent selection for major programs suggests a generally positive performance history and a strong capability to meet DoD requirements. However, like any large defense contractor, they have also faced scrutiny and reviews on specific programs regarding cost, schedule, and performance, underscoring the need for ongoing government oversight.

How does the $25.17 million contract value compare to other DoD engineering service contracts?

The $25.17 million contract value for engineering services is considered moderate within the Department of Defense's vast procurement landscape. DoD frequently awards contracts for engineering, research, development, test, and evaluation (RDT&E) that range from tens of millions to billions of dollars. For specialized services like analysis and integration of complex systems (e.g., BEAM STEERING UNIT CABINETS), this value suggests a focused scope of work rather than a program-wide development effort. It is comparable to many individual task orders or delivery orders issued under larger indefinite-delivery/indefinite-quantity (IDIQ) contracts, or specific project-based awards. The value is significant enough to attract major contractors like Raytheon but not so large as to be considered a flagship program in itself.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this nature?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract, such as this $25.17 million award, revolve around cost control and potential for scope creep. For the government, the risk is that the contractor may not be sufficiently incentivized to control costs, as allowable costs are reimbursed. While the fixed fee provides a ceiling on profit, the contractor is guaranteed to recover all allowable costs. This necessitates rigorous government oversight to ensure that all incurred costs are reasonable, allocable, and necessary for the contract's performance. Scope creep is another risk; if the project requirements evolve, the contractor might be tempted to expand the scope without adequate adjustments to the fixed fee or schedule, potentially leading to cost overruns beyond initial projections. For the contractor, the risk lies in accurately estimating the costs to perform the work and ensuring the fixed fee adequately compensates for the effort and risk undertaken.

How effective is 'full and open competition' in ensuring value for taxpayer money in defense engineering contracts?

Full and open competition is widely regarded as the most effective method for ensuring value for taxpayer money in defense engineering contracts. By allowing all responsible sources to submit bids, it fosters a competitive environment where contractors are incentivized to offer their best technical solutions at the most competitive prices. This process typically leads to a wider range of proposals, allowing the government to select the offer that provides the best overall value, considering factors like price, technical merit, past performance, and delivery schedule. While it requires more upfront effort in terms of solicitation and evaluation, the potential for cost savings and superior technical outcomes generally outweighs these initial investments. For a contract like the DoD's $25.17 million award for BEAM STEERING UNIT CABINETS, this approach likely resulted in a more favorable price and a technically superior solution than a sole-source or limited competition award.

What are the implications of the contract's nearly 5-year duration for program stability and cost?

The nearly 5-year duration (1826 days) of this $25.17 million contract has several implications for program stability and cost. On the positive side, it provides significant program stability, allowing the contractor, Raytheon Company, to plan resources effectively, retain key personnel, and invest in necessary infrastructure or tooling. This long-term engagement can foster a deeper understanding of the program's requirements and lead to more efficient execution over time. For cost implications, a longer duration can potentially lead to economies of scale and learning curve efficiencies, which might reduce the overall cost per unit of work performed. However, it also increases the risk of cost escalation due to inflation, changes in labor rates, or material costs over the contract period. Effective contract management, including provisions for economic price adjustments or regular reviews, is crucial to mitigate these long-term cost risks and ensure the government continues to receive good value throughout the contract's life.

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: COST PLUS FIXED FEE (U)

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: $25,173,487

Exercised Options: $25,173,487

Current Obligation: $25,173,487

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