DoD Awards Raytheon $173.8M for AN/TPY-2 Radar Development, Sole-Source Contract
Contract Overview
Contract Amount: $173,774,067 ($173.8M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2020-11-01
End Date: 2024-03-31
Contract Duration: 1,246 days
Daily Burn Rate: $139.5K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Official Description: US AN/TPY-2 DEVELOPMENT
Place of Performance
Location: WOBURN, MIDDLESEX County, MASSACHUSETTS, 01801
Plain-Language Summary
Department of Defense obligated $173.8 million to RAYTHEON COMPANY for work described as: US AN/TPY-2 DEVELOPMENT Key points: 1. Significant investment in advanced radar technology for missile defense. 2. Sole-source award to Raytheon raises questions about competition and price discovery. 3. Contract duration of over 3 years suggests a complex, ongoing development effort. 4. Focus on search, detection, and guidance systems highlights critical national security needs.
Value Assessment
Rating: questionable
The contract type is Cost Plus Award Fee (CPAF), which can incentivize performance but also carries risk of cost overruns. Without competitive bidding, it's difficult to benchmark pricing against similar systems.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Raytheon. 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 the development of this critical missile defense system.
Public Impact
Enhances national missile defense capabilities. Supports advanced radar technology development. Potential for cost inefficiencies due to sole-source nature. Impacts the strategic balance in missile defense.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Award Fee contract type
- Lack of transparency in pricing
Positive Signals
- Critical technology for national security
- Experienced contractor
Sector Analysis
This contract falls within the defense sector, specifically focusing on advanced radar systems for missile defense. Spending in this area is driven by national security priorities and technological advancements.
Small Business Impact
The data indicates no specific set-aside for small businesses in this contract. The prime contractor, Raytheon, is a large corporation, suggesting limited direct opportunities for small businesses on this specific award.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure cost reasonableness and effective performance. The Missile Defense Agency should provide detailed justifications for the lack of competition.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Missile Defense Agency Programs
Risk Flags
- Lack of competition
- Potential for cost overruns (CPAF)
- Limited transparency in pricing
- Contract duration and complexity
Tags
search-detection-navigation-guidance-aer, department-of-defense, ma, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $173.8 million to RAYTHEON COMPANY. US AN/TPY-2 DEVELOPMENT
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 $173.8 million.
What is the period of performance?
Start: 2020-11-01. End: 2024-03-31.
What is the justification for awarding this contract on a sole-source basis, and what steps are being taken to ensure cost-effectiveness?
The justification for a sole-source award typically involves unique capabilities or proprietary technology held by a single contractor. The Missile Defense Agency should provide detailed documentation supporting this decision. To ensure cost-effectiveness, rigorous negotiation of the award fee structure and continuous monitoring of performance and costs are essential.
What are the potential risks associated with a Cost Plus Award Fee contract for advanced technology development, especially when sole-sourced?
CPAF contracts can incentivize desired outcomes but also carry risks of cost overruns if not managed tightly. When sole-sourced, the lack of competitive pressure exacerbates these risks, potentially leading to inflated costs and reduced focus on efficiency. Robust oversight and clear performance metrics are crucial to mitigate these risks.
How does the AN/TPY-2 radar development contribute to overall missile defense effectiveness, and what is the expected return on investment?
The AN/TPY-2 radar is a critical component of missile defense systems, providing early warning and tracking capabilities. Its development enhances the effectiveness of interceptor systems. The return on investment is measured in terms of enhanced national security and deterrence, though quantifying this in purely financial terms is challenging.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument 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: HQ014717R0012
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: $256,005,709
Exercised Options: $180,840,320
Current Obligation: $173,774,067
Actual Outlays: $102,727,232
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HQ014718D0002
IDV Type: IDC
Timeline
Start Date: 2020-11-01
Current End Date: 2024-03-31
Potential End Date: 2024-03-31 00:00:00
Last Modified: 2025-06-04
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