DoD's $156M AN/TPY-2 O&S Contract Awarded to Raytheon Company
Contract Overview
Contract Amount: $155,878,484 ($155.9M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2020-11-01
End Date: 2023-07-30
Contract Duration: 1,001 days
Daily Burn Rate: $155.7K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: FY 21 AN/TPY-2 O&S
Place of Performance
Location: WOBURN, MIDDLESEX County, MASSACHUSETTS, 01801
Plain-Language Summary
Department of Defense obligated $155.9 million to RAYTHEON COMPANY for work described as: FY 21 AN/TPY-2 O&S Key points: 1. High contract value suggests significant operational needs for the AN/TPY-2 system. 2. Sole-source award to Raytheon Company, the likely original equipment manufacturer. 3. Risk of limited competition and potential for higher costs due to sole-source nature. 4. Spending falls within the 'Other Electronic and Precision Equipment Repair and Maintenance' sector.
Value Assessment
Rating: questionable
The contract's Cost Plus Incentive Fee (CPIF) structure can incentivize cost savings but also carries inherent risk if not managed tightly. Benchmarking against similar complex electronic system maintenance contracts is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Raytheon Company. This limits price discovery and potentially increases costs for taxpayers as competition is absent.
Taxpayer Impact: The lack of competition in this sole-source award may lead to higher expenditures than a competitively bid contract, impacting taxpayer value.
Public Impact
Ensures continued operational readiness of critical missile defense radar systems. Supports advanced threat detection capabilities for national security. Potential for cost overruns due to sole-source nature and CPIF contract type.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Incentive Fee contract type
- Lack of transparency in pricing
Positive Signals
- Maintains critical defense capability
- Long-term contract duration
Sector Analysis
This contract falls under the 'Other Electronic and Precision Equipment Repair and Maintenance' sector, which is crucial for supporting advanced defense systems. Spending benchmarks for specialized radar operations and maintenance are often high due to unique technical requirements and limited vendor pools.
Small Business Impact
The awardee is Raytheon Company, a large defense contractor. There is no indication of small business participation in this specific contract, which is common for sole-source awards of this nature.
Oversight & Accountability
The Department of Defense's Missile Defense Agency is responsible for this contract. Oversight is critical to ensure cost control and performance under the CPIF structure, especially given the sole-source nature.
Related Government Programs
- Other Electronic and Precision Equipment Repair and Maintenance
- Department of Defense Contracting
- Missile Defense Agency Programs
Risk Flags
- Sole-source award limits competition.
- Potential for cost overruns with CPIF contract.
- Lack of transparency in pricing.
- Dependence on a single contractor for critical system maintenance.
Tags
other-electronic-and-precision-equipment, department-of-defense, ma, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $155.9 million to RAYTHEON COMPANY. FY 21 AN/TPY-2 O&S
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 $155.9 million.
What is the period of performance?
Start: 2020-11-01. End: 2023-07-30.
What is the justification for the sole-source award, and were alternative competitive strategies considered?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the original equipment manufacturer's necessity for maintenance. The Missile Defense Agency would need to provide documentation demonstrating why competition was not feasible or advantageous for the AN/TPY-2 system's sustainment.
How are cost efficiencies being monitored and incentivized under the Cost Plus Incentive Fee (CPIF) structure?
Under a CPIF contract, both the contractor and the government share in any cost savings or overruns relative to a target cost. Effective oversight involves rigorous review of incurred costs, performance metrics, and adherence to the incentive targets to ensure value for money and prevent excessive spending.
What is the long-term strategy for ensuring competitive sourcing for future AN/TPY-2 sustainment needs?
The long-term strategy should explore options for fostering competition, potentially through technology refresh programs, developing alternative support capabilities, or encouraging other qualified entities to gain expertise. This would mitigate reliance on a single source and improve future cost-effectiveness.
Industry Classification
NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Other Electronic and Precision Equipment Repair and Maintenance
Product/Service Code: QUALITY CONTROL, TEST, INSPECTION › OTHER QUALITY, TEST, INSPECT SVCS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: HQ014718R0001
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: RTX Corp
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: $158,123,297
Exercised Options: $158,123,297
Current Obligation: $155,878,484
Actual Outlays: $48,414,629
Subaward Activity
Number of Subawards: 8
Total Subaward Amount: $963,910
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: HQ014718D0001
IDV Type: IDC
Timeline
Start Date: 2020-11-01
Current End Date: 2023-07-30
Potential End Date: 2023-07-30 00:00:00
Last Modified: 2025-12-18
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