DoD's $50.5M Raytheon Contract for Fleet Spares Faces Scrutiny Over Competition and Value
Contract Overview
Contract Amount: $50,474,911 ($50.5M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2021-07-26
End Date: 2025-06-30
Contract Duration: 1,435 days
Daily Burn Rate: $35.2K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: FY21 FLEET SPARES
Place of Performance
Location: WOBURN, MIDDLESEX County, MASSACHUSETTS, 01801
Plain-Language Summary
Department of Defense obligated $50.5 million to RAYTHEON COMPANY for work described as: FY21 FLEET SPARES Key points: 1. Significant spending on fleet spares highlights critical maintenance needs. 2. Sole-source award to Raytheon raises questions about competitive pricing. 3. Long contract duration (1435 days) may impact cost-effectiveness. 4. Focus on electronic equipment repair suggests a specialized, high-value sector.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee structure, combined with a lack of competition, makes it difficult to assess value. The awarded amount of $50.5M over 1435 days warrants further investigation into whether this represents a fair price for the services rendered.
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 leads to higher costs for taxpayers as competitive pressures are absent.
Taxpayer Impact: The lack of competition in this significant contract may result in taxpayers paying a premium for essential fleet spares.
Public Impact
Ensures operational readiness of critical defense assets. Supports advanced electronic systems within the Missile Defense Agency. Potential for cost overruns due to sole-source nature.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type
- Long contract duration
- Sole-source award
Positive Signals
- Supports critical defense systems
- Awarded to established contractor
Sector Analysis
This contract falls within the 'Other Electronic and Precision Equipment Repair and Maintenance' sector, a critical component of national defense. Spending benchmarks for similar specialized repair services are often high due to technical complexity and limited providers.
Small Business Impact
The contract was awarded to Raytheon Company, a large defense contractor. There is no indication that small businesses were involved in this specific award, suggesting missed opportunities for SMB participation.
Oversight & Accountability
The sole-source nature of this contract warrants close oversight to ensure costs are reasonable and that the government is receiving fair value. Future solicitations should explore competitive options.
Related Government Programs
- Other Electronic and Precision Equipment Repair and Maintenance
- Department of Defense Contracting
- Missile Defense Agency Programs
Risk Flags
- Potential for overpricing due to lack of competition.
- Limited transparency in cost build-up with CPFF structure.
- Risk of contractor inefficiency without strong competitive pressure.
- Long contract duration may not reflect evolving technological needs.
Tags
other-electronic-and-precision-equipment, department-of-defense, ma, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $50.5 million to RAYTHEON COMPANY. FY21 FLEET SPARES
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 $50.5 million.
What is the period of performance?
Start: 2021-07-26. End: 2025-06-30.
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 urgent needs. Without a competitive bidding process, it's crucial to verify that no other qualified vendors could meet the requirements. The Missile Defense Agency should provide documentation detailing why competition was not feasible to ensure taxpayer funds are used efficiently and effectively.
How does the Cost Plus Fixed Fee structure impact the contractor's incentive to control costs?
A Cost Plus Fixed Fee (CPFF) contract allows the contractor to recover all allowable costs plus a predetermined fixed fee. While the fee provides some incentive for efficiency, the primary cost control relies on the government's oversight of allowable expenses. This structure can sometimes lead to less aggressive cost management compared to fixed-price contracts.
What are the specific fleet spares being procured, and what is their criticality to defense operations?
Understanding the specific nature and criticality of these fleet spares is essential for assessing the contract's value and necessity. If these are components for highly specialized or unique defense systems, the cost and duration might be justified. However, detailed information on the spares' role in maintaining operational readiness is needed for a complete evaluation.
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: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: HQ014718R0001
Pricing Type: COST PLUS FIXED FEE (U)
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: $51,939,164
Exercised Options: $51,939,164
Current Obligation: $50,474,911
Actual Outlays: $30,609,345
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: 2021-07-26
Current End Date: 2025-06-30
Potential End Date: 2025-06-30 00:00:00
Last Modified: 2025-11-07
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