DoD awards $101.4M for TPY-2 Radar O&S to Raytheon, a sole-source contract

Contract Overview

Contract Amount: $101,410,175 ($101.4M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2021-11-01

End Date: 2024-03-29

Contract Duration: 879 days

Daily Burn Rate: $115.4K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: FY22AN/TPY-2 O&S TO AWARD

Place of Performance

Location: WOBURN, MIDDLESEX County, MASSACHUSETTS, 01801

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $101.4 million to RAYTHEON COMPANY for work described as: FY22AN/TPY-2 O&S TO AWARD Key points: 1. High contract value for radar operations and maintenance. 2. Sole-source award to Raytheon Company raises competition concerns. 3. Risk of inflated costs due to lack of competitive bidding. 4. Sector: Defense - specifically missile defense systems.

Value Assessment

Rating: questionable

The contract is a Cost Plus Incentive Fee type, which can lead to cost overruns if not managed carefully. Without competitive benchmarks, assessing value for money is difficult.

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 these essential radar services.

Public Impact

Ensures continued operational readiness of critical TPY-2 radar systems. Potential for higher costs impacts overall defense budget allocation. Lack of transparency in pricing due to sole-source nature.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Lack of competition

Positive Signals

Ensures critical system maintenance
Long-term support for defense asset

Sector Analysis

This contract falls within the Defense sector, specifically supporting missile defense systems. Spending on radar operations and maintenance is crucial for national security, but competitive sourcing is key to cost efficiency.

Small Business Impact

The contract was awarded to Raytheon Company and there is no indication of small business participation. This award does not appear to support small business goals.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure Raytheon is providing services at a fair and reasonable price, despite the lack of competition.

Related Government Programs

Other Electronic and Precision Equipment Repair and Maintenance
Department of Defense Contracting
Missile Defense Agency Programs

Risk Flags

Lack of competition
Potential for cost overruns
Limited price transparency
Sole-source award

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $101.4 million to RAYTHEON COMPANY. FY22AN/TPY-2 O&S TO AWARD

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 $101.4 million.

What is the period of performance?

Start: 2021-11-01. End: 2024-03-29.

What is the justification for the sole-source award of this significant contract?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Without further details, it's difficult to ascertain the specific rationale, but it's crucial for the agency to document and justify why competition was not feasible or advantageous in this instance.

How is Raytheon's performance and pricing being monitored under this cost-plus incentive fee contract?

Under a Cost Plus Incentive Fee (CPIF) contract, the contractor is reimbursed for allowable costs plus a fee that is adjusted based on performance against targets. Oversight involves rigorous monitoring of costs, performance metrics, and incentive targets to ensure the government receives value and the contractor is motivated to control costs and meet objectives.

What is the long-term strategy for ensuring competitive pricing for TPY-2 radar sustainment?

The long-term strategy should involve exploring options to introduce competition, such as breaking down the requirement into smaller, more manageable components, encouraging potential new entrants, or developing alternative sustainment solutions. Periodic market research and re-evaluation of the sole-source justification are essential to identify opportunities for future competition.

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: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE SERVICES

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: 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: $101,608,038

Exercised Options: $101,608,038

Current Obligation: $101,410,175

Actual Outlays: $95,740,211

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