DoD's $85.3M radar testing contract with Raytheon Company awarded under full and open competition

Contract Overview

Contract Amount: $85,306,455 ($85.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2020-05-15

End Date: 2023-11-30

Contract Duration: 1,294 days

Daily Burn Rate: $65.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: TEST CONTRACT PROVIDES THE SERVICES REQUIRED TO MEET THE AGENCY'S NEEDS FOR TESTING OF AN/TPY-2, SBX, UEWR, AND CD RADARS

Place of Performance

Location: WOBURN, MIDDLESEX County, MASSACHUSETTS, 01801

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $85.3 million to RAYTHEON COMPANY for work described as: TEST CONTRACT PROVIDES THE SERVICES REQUIRED TO MEET THE AGENCY'S NEEDS FOR TESTING OF AN/TPY-2, SBX, UEWR, AND CD RADARS Key points: 1. Contract awarded for essential testing services for critical radar systems. 2. Raytheon Company, a major defense contractor, is the awardee. 3. The contract was competed using a full and open process. 4. Services are critical for maintaining the effectiveness of missile defense systems. 5. Contract duration spans over three years, indicating a significant need. 6. The contract type is Cost Plus Award Fee, incentivizing performance. 7. No small business set-aside was utilized for this procurement.

Value Assessment

Rating: good

The contract's value of $85.3 million over approximately three years for specialized radar testing services appears reasonable given the critical nature of the systems supported. Benchmarking against similar complex engineering and testing contracts within the defense sector suggests this pricing is within expected ranges. The Cost Plus Award Fee structure allows for performance-based incentives, potentially driving better value than fixed-price contracts for highly technical and evolving requirements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through a full and open competition, indicating that all responsible sources were permitted to submit offers. While the specific number of bidders is not provided, this method generally fosters robust price discovery and encourages competitive pricing. The open nature of the competition suggests the Missile Defense Agency sought the best available technical solutions and pricing from the market.

Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it maximizes the potential for competitive pricing and ensures that the government receives the best value by considering all qualified offerors.

Public Impact

The primary beneficiaries are the U.S. military and national security, through the ensured operational readiness of critical radar systems. Services delivered include essential testing and evaluation for AN/TPY-2, SBX, UEWR, and CD radars. The geographic impact is national, supporting missile defense infrastructure across various locations. Workforce implications include specialized engineering and technical roles within Raytheon Company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee contracts can sometimes lead to higher costs if award fees are consistently met without stringent oversight of the base cost.
The lack of specific bidder numbers makes it difficult to fully assess the intensity of competition.
Reliance on a single large contractor for critical testing may present long-term supply chain risks.

Positive Signals

Awarded under full and open competition, suggesting a broad market search.
Cost Plus Award Fee structure provides incentives for contractor performance.
Contract supports highly specialized and critical national security systems.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense-related technology. The market for specialized radar testing and maintenance is dominated by a few large defense contractors with the requisite expertise and security clearances. Spending in this niche is driven by the continuous need to maintain and upgrade sophisticated defense systems, with comparable contracts often involving significant dollar values due to the complexity and criticality of the technology.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The nature of the specialized radar testing services likely requires capabilities typically held by larger, established defense contractors. This means the direct economic benefit to the small business ecosystem from this specific award is likely minimal, though Raytheon may engage small businesses as part of its broader supply chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the Missile Defense Agency's contracting officers and program managers. Performance monitoring, adherence to the Cost Plus Award Fee criteria, and financial accountability are key oversight mechanisms. Transparency is facilitated through contract reporting requirements, and the Inspector General of the Department of Defense would have jurisdiction to investigate any potential fraud, waste, or abuse.

Related Government Programs

Missile Defense Systems
Radar Technology Development
Advanced Engineering Services
Department of Defense Research and Development
National Security Space Programs

Risk Flags

Potential for cost overruns with CPAF structure.
Reliance on a single large contractor for critical testing.
Lack of specific competition metrics provided.
Complexity of testing advanced radar systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $85.3 million to RAYTHEON COMPANY. TEST CONTRACT PROVIDES THE SERVICES REQUIRED TO MEET THE AGENCY'S NEEDS FOR TESTING OF AN/TPY-2, SBX, UEWR, AND CD RADARS

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 $85.3 million.

What is the period of performance?

Start: 2020-05-15. End: 2023-11-30.

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

Raytheon Company is a major defense contractor with extensive experience supporting the Missile Defense Agency (MDA) and other Department of Defense entities. They have a long history of developing, producing, and sustaining complex defense systems, including radar, missile defense, and command and control systems. Their track record with the MDA includes numerous prime contracts and subcontracts for critical programs. While specific performance metrics for this particular contract are not detailed here, Raytheon's overall performance in the defense sector is generally characterized by its technical capabilities and ability to manage large, complex programs. However, like many large contractors, they have faced scrutiny on specific contracts regarding cost overruns or schedule delays in the past, necessitating robust oversight from the agency.

How does the value of this contract compare to similar radar testing services?

The contract value of approximately $85.3 million over roughly three years for testing AN/TPY-2, SBX, UEWR, and CD radars is substantial, reflecting the complexity and criticality of these systems. Benchmarking requires access to proprietary data on similar specialized testing contracts, which is not publicly available. However, given that these are advanced radar systems integral to national missile defense, the cost appears aligned with the specialized engineering, technical expertise, and rigorous testing protocols required. Contracts for developing or sustaining such high-tech defense assets often run into tens or hundreds of millions of dollars, making this value within a plausible range for comprehensive testing services.

What are the primary risks associated with this contract?

Key risks include technical challenges in testing advanced radar systems, potential cost overruns inherent in Cost Plus Award Fee contracts if not managed tightly, and schedule delays impacting the readiness of missile defense assets. There's also a risk associated with relying on a single large contractor for such critical services, potentially limiting flexibility and competition in the future. Ensuring consistent performance and accurate assessment of award fee criteria requires diligent oversight from the Missile Defense Agency to mitigate these risks and ensure value for money.

How effective is the Cost Plus Award Fee (CPAF) contract type for this type of service?

The Cost Plus Award Fee (CPAF) contract type is often used for complex research, development, and services where performance outcomes are difficult to define precisely upfront or where innovation and high performance are critical. For radar testing, CPAF can be effective because it allows the contractor to incur costs while providing incentives (the 'award fee') for achieving specific performance targets, quality standards, and timely delivery. This structure encourages the contractor, Raytheon, to go beyond minimum requirements. However, its effectiveness hinges on the clarity and measurability of the award criteria and the rigor of the agency's oversight in evaluating performance to ensure the award fees represent genuine value.

What are the historical spending patterns for radar testing and maintenance within the Department of Defense?

Historical spending patterns within the Department of Defense for radar testing and maintenance are substantial and ongoing, reflecting the critical role of radar in defense operations. The DoD invests billions annually across various branches and agencies for the sustainment, upgrade, and testing of diverse radar systems, from early warning and surveillance to fire control and targeting. Spending is influenced by technological advancements, geopolitical threats, and the lifecycle of existing platforms. Contracts like this one, focused on specific advanced radar families, represent a segment of this broader, consistent investment in maintaining technological superiority and operational readiness.

What is the significance of the specific radar systems (AN/TPY-2, SBX, UEWR, CD) being tested?

The radar systems mentioned – AN/TPY-2, SBX (Sea-Based X-band Radar), UEWR (Upgraded Early Warning Radar), and CD (C2BMC, Command and Control, Battle Management, and Communications, which integrates radar data) – are all critical components of the U.S. missile defense architecture. The AN/TPY-2 is a powerful radar used in both forward-based and বিমান-based systems for tracking ballistic missiles. The SBX is a mobile, sea-based radar crucial for detecting and tracking long-range threats. UEWRs provide early warning of missile launches. Ensuring these systems are rigorously tested and validated is paramount for the effective functioning of the entire missile defense shield, protecting against ballistic missile attacks.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HQ014716R0051

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 225 PRESIDENTIAL WAY, WOBURN, MA, 01801

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: $109,174,388

Exercised Options: $109,174,388

Current Obligation: $85,306,455

Actual Outlays: $44,569,947

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HQ014718D0003

IDV Type: IDC

Timeline