DoD Awards Raytheon $18.4M for Sustaining Engineering, Missile Defense Agency Contract Lacks Competition

Contract Overview

Contract Amount: $18,439,157 ($18.4M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2022-11-18

End Date: 2026-09-17

Contract Duration: 1,399 days

Daily Burn Rate: $13.2K/day

Competition Type: NOT COMPETED

Pricing Type: COST NO FEE

Sector: Defense

Official Description: IIA - SUSTAINING ENGINEERING B&P

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $18.4 million to RAYTHEON COMPANY for work described as: IIA - SUSTAINING ENGINEERING B&P Key points: 1. Significant contract value of $18.4 million for sustaining engineering. 2. Sole-source award to Raytheon Company raises competition concerns. 3. Missile defense sector is critical but often involves limited competition. 4. Long contract duration of nearly 4 years warrants close monitoring.

Value Assessment

Rating: fair

The contract type is 'COST NO FEE', which offers limited incentive for cost control. Without competitive benchmarking, assessing the value for money is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The lack of competition may result in taxpayers paying more than necessary for these sustaining engineering services.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. Critical missile defense systems rely on this engineering support, impacting national security. The long-term nature of the contract suggests ongoing reliance on Raytheon for these services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Long duration

Positive Signals

Supports critical missile defense systems

Sector Analysis

This contract falls within the defense sector, specifically missile defense, which is a high-priority area for the government. Spending benchmarks in this niche can be difficult to establish due to specialized requirements and limited contractor pools.

Small Business Impact

The data indicates this contract was not awarded to a small business. Further analysis would be needed to determine if small business participation was considered or if subcontracting opportunities exist.

Oversight & Accountability

The sole-source nature of this award warrants increased oversight to ensure fair pricing and effective service delivery. Accountability for cost control is crucial given the contract type.

Related Government Programs

Guided Missile and Space Vehicle Manufacturing
Department of Defense Contracting
Missile Defense Agency Programs

Risk Flags

Lack of competition
Cost reimbursement contract type
Long contract duration
Potential for cost overruns
Limited transparency on pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.4 million to RAYTHEON COMPANY. IIA - SUSTAINING ENGINEERING B&P

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 $18.4 million.

What is the period of performance?

Start: 2022-11-18. End: 2026-09-17.

What is the justification for the sole-source award, and were alternative competitive strategies considered?

The justification for a sole-source award typically involves unique capabilities or proprietary technology held by a single contractor. Agencies must document why full and open competition is not feasible. Without this documentation, it's difficult to assess if taxpayer funds are being used efficiently or if opportunities for cost savings through competition were missed.

How does the 'COST NO FEE' contract type impact cost control and contractor performance?

A 'COST NO FEE' contract means the contractor is reimbursed for allowable costs but receives no fee or profit. While this can reduce the contractor's incentive to inflate costs, it also removes the profit motive for efficiency and innovation. Oversight is critical to ensure costs are reasonable and necessary.

What are the specific sustaining engineering tasks, and how do they contribute to the overall effectiveness of missile defense systems?

Sustaining engineering involves maintaining, improving, and supporting existing systems throughout their lifecycle. For missile defense, this could include software updates, hardware maintenance, obsolescence management, and performance analysis. Effective sustaining engineering is crucial for ensuring the reliability and readiness of these complex, high-stakes systems.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle 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: HQ027619R0001

Pricing Type: COST NO FEE (S)

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: $18,439,157

Exercised Options: $18,439,157

Current Obligation: $18,439,157

Actual Outlays: $579,067

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $149,203

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