Raytheon Company awarded $27.3M for IB Product Support, with no competition

Contract Overview

Contract Amount: $27,280,123 ($27.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2021-04-07

End Date: 2026-01-31

Contract Duration: 1,760 days

Daily Burn Rate: $15.5K/day

Competition Type: NOT COMPETED

Pricing Type: COST NO FEE

Sector: Defense

Official Description: IB PRODUCT SUPPORT B&P FOR BRIDGECHIPS

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $27.3 million to RAYTHEON COMPANY for work described as: IB PRODUCT SUPPORT B&P FOR BRIDGECHIPS Key points: 1. Contract awarded to a single, large defense contractor, raising questions about competitive pricing. 2. Long contract duration of 1760 days suggests a need for sustained support. 3. The contract type (Cost No Fee) offers limited incentive for cost control by the contractor. 4. Awarded as a delivery order, indicating it's part of a larger, potentially pre-existing agreement. 5. Focus on guided missile and space vehicle manufacturing points to a critical defense capability. 6. Geographic location in Arizona may have implications for local workforce and economic impact.

Value Assessment

Rating: questionable

Without a competitive bidding process, it is difficult to benchmark the value for money. The Cost No Fee contract type can lead to higher costs as the contractor is reimbursed for expenses without a direct profit incentive tied to cost savings. Comparing this to similar support contracts for missile defense systems would be necessary to assess if the pricing is reasonable, but such data is not readily available in this context.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning there was no open competition. This approach is typically used when only one responsible source can provide the required goods or services. The lack of competition means that the government did not benefit from a range of proposals and potential price reductions that a competitive process could have yielded.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as the government may not achieve the most favorable pricing compared to a competitive environment.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Missile Defense Agency, ensuring continued support for critical missile defense systems. Services delivered include product support and sustainment for 'BRIDGECHIPS', likely a component or system within the missile defense architecture. The contract has a geographic impact in Arizona (AZ), potentially supporting local jobs and the regional economy within the defense industrial base. Workforce implications may include specialized technical roles for engineers, technicians, and support staff involved in maintaining and supporting these advanced systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs for taxpayers.
Cost No Fee contract type offers limited incentive for contractor efficiency.
Sole-source award raises concerns about the availability of alternative providers or potential for better pricing.
Long contract duration could mask inefficiencies if not closely monitored.
Specific details of 'IB PRODUCT SUPPORT' are not fully elaborated, making independent value assessment challenging.

Positive Signals

Awarded to a major defense contractor with established expertise in the sector.
Contract supports critical national defense capabilities (Missile Defense Agency).
Delivery order structure might indicate efficient integration into existing programs.
Long-term nature suggests a stable and predictable support structure for essential systems.
Contracting agency is a key player in national security, implying rigorous internal oversight.

Sector Analysis

The defense industrial base, particularly the guided missile and space vehicle manufacturing sector, is characterized by high barriers to entry, specialized expertise, and significant government investment. Contracts in this area often involve complex technologies and long development cycles. Raytheon Company is a major player in this sector, and this contract for product support fits within the broader landscape of maintaining and sustaining advanced defense platforms. Comparable spending benchmarks are difficult to establish without more specific details on the 'BRIDGECHIPS' system, but overall defense spending on sustainment and product support is substantial.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses within the provided data. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless Raytheon Company voluntarily engages small businesses for specific support roles not detailed here.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense and the Missile Defense Agency. As a Cost No Fee contract, rigorous financial oversight and auditing would be crucial to ensure that all reimbursed costs are reasonable and allocable to the contract. Transparency is limited due to the sole-source nature, but contract awards are generally reported. Inspector General jurisdiction would apply for any investigations into fraud, waste, or abuse.

Related Government Programs

Missile Defense Systems
Guided Missile Manufacturing
Space Vehicle Manufacturing
Defense Logistics and Sustainment
Cost-Reimbursement Contracts
Sole-Source Defense Procurements

Risk Flags

Sole-source award
Cost-reimbursement contract type (Cost No Fee)
Lack of detailed public information on 'BRIDGECHIPS' system
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.3 million to RAYTHEON COMPANY. IB PRODUCT SUPPORT B&P FOR BRIDGECHIPS

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 $27.3 million.

What is the period of performance?

Start: 2021-04-07. End: 2026-01-31.

What is the specific nature of 'IB PRODUCT SUPPORT' and the 'BRIDGECHIPS' system?

The provided data abbreviates the item as 'IB PRODUCT SUPPORT B&P FOR BRIDGECHIPS'. 'B&P' typically stands for 'Business and Professional' services or 'Business and Production'. 'IB' could refer to a specific program, system, or component. 'BRIDGECHIPS' is likely a proprietary name for a component or subsystem within a larger missile defense platform. Without further classification details or access to the contract's statement of work, the precise nature of the support (e.g., engineering, maintenance, repair, testing, documentation) and the specific function of BRIDGECHIPS remain unspecified. This lack of detail hinders a comprehensive understanding of the contract's scope and the criticality of the services provided.

How does the Cost No Fee (CNF) contract type impact contractor incentives and potential costs?

A Cost No Fee (CNF) contract is a type of cost-reimbursement contract where the contractor is reimbursed for all allowable costs but receives no fee or profit. This structure is typically used in situations where the level of risk is very low, or when the contractor's primary motivation is not profit but rather fulfilling a critical mission objective. For the government, the primary advantage is avoiding profit margins. However, the lack of a fee can reduce the contractor's incentive to control costs rigorously, as their profit is not tied to efficiency. This necessitates strong government oversight to ensure costs remain reasonable and allocable to the contract, making it crucial for the Missile Defense Agency to actively monitor expenditures.

What are the implications of a sole-source award for this type of defense product support?

A sole-source award for defense product support, especially for critical systems like those managed by the Missile Defense Agency, implies that only one contractor, Raytheon Company in this case, was deemed capable of providing the necessary services. This could be due to proprietary technology, unique expertise, existing infrastructure, or specific security clearances required. While it ensures continuity and access to specialized knowledge, it eliminates the potential benefits of competition, such as lower prices through bidding and a wider range of innovative solutions. Taxpayers may bear a higher cost compared to a competitive scenario, and the government must rely heavily on negotiation and oversight to ensure fair pricing and adequate performance.

What is the historical spending pattern for similar product support contracts within the Missile Defense Agency?

Analyzing historical spending patterns for similar product support contracts within the Missile Defense Agency (MDA) is crucial for benchmarking. However, the provided data is limited to a single contract award. To establish a pattern, one would need access to historical MDA contract databases, filtering for contracts related to missile defense systems, product support, and sustainment services. Key metrics to compare would include contract values, duration, contract types (e.g., FFP, CPFF, CPIF), competition levels, and contractor performance ratings. Without this broader dataset, it's impossible to determine if the $27.3 million award to Raytheon Company represents an increase, decrease, or stable level of spending for comparable services.

What is Raytheon Company's track record with the Missile Defense Agency and similar contracts?

Raytheon Company is a major defense contractor with a long-standing relationship with the Department of Defense, including the Missile Defense Agency. They are known for their work on various missile defense systems, such as the Patriot missile system and advanced radar technologies. Their track record with the MDA likely includes numerous contracts for development, production, and sustainment of complex defense assets. While specific performance metrics for this particular 'IB PRODUCT SUPPORT' contract are not available, Raytheon's general experience suggests they possess the technical capabilities and infrastructure required. However, past performance on other contracts, including any past issues or successes, would provide a more complete picture of their reliability and efficiency in fulfilling such requirements.

What are the potential risks associated with the long duration (1760 days) of this contract?

The contract duration of 1760 days (approximately 4.8 years) presents several potential risks. Firstly, it locks the government into a single provider for an extended period, reducing flexibility to adapt to changing technological landscapes or strategic needs. Secondly, long-term contracts can sometimes lead to complacency from the contractor if oversight is not consistently rigorous, potentially impacting service quality or driving up costs over time. Thirdly, economic fluctuations, changes in threat assessments, or unforeseen technical challenges could arise during this period, requiring contract modifications that might not be favorable to the government. Effective risk mitigation would involve robust performance metrics, regular reviews, and clear clauses for addressing unforeseen circumstances.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing

Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HQ027619R0001

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

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: $27,298,012

Exercised Options: $27,298,012

Current Obligation: $27,280,123

Actual Outlays: $8,528,561

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: HQ085121D0001

IDV Type: IDC

Timeline