Raytheon Company awarded $156M contract for radar ground test support by Missile Defense Agency

Contract Overview

Contract Amount: $156,335,236 ($156.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2022-05-15

End Date: 2026-01-30

Contract Duration: 1,356 days

Daily Burn Rate: $115.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: GROUND TEST SUPPORT 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 $156.3 million to RAYTHEON COMPANY for work described as: GROUND TEST SUPPORT 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 provides essential testing services for critical radar systems. 2. Full and open competition suggests a potentially competitive bidding process. 3. Cost Plus Award Fee contract type introduces performance-based incentives. 4. Long duration of over three years indicates a significant, ongoing need. 5. Contractor's extensive experience in defense systems is a key factor. 6. Focus on specialized radar systems highlights a niche but vital capability.

Value Assessment

Rating: good

The contract value of $156.3 million over approximately 3.6 years appears reasonable given the specialized nature of the services. Benchmarking against similar complex engineering and testing contracts for advanced defense systems would provide a more precise value-for-money assessment. The Cost Plus Award Fee structure allows for flexibility and incentivizes performance, which can be beneficial for complex, evolving requirements. However, the lack of detailed cost breakdowns makes a definitive value assessment challenging without further data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. This approach is generally favored for ensuring a competitive marketplace and potentially achieving better pricing. The specific number of bidders and the details of the solicitation process are not provided, but the designation suggests a robust competition was intended. The open nature of the competition is a positive indicator for price discovery and efficient use of taxpayer funds.

Taxpayer Impact: A full and open competition process increases the likelihood that the government receives competitive pricing, ultimately benefiting taxpayers by ensuring funds are used efficiently for essential defense services.

Public Impact

The Missile Defense Agency benefits from the continued testing and validation of its advanced radar systems. Services ensure the operational readiness and effectiveness of AN/TPY-2, SBX, and UEWR radars. Geographic impact is primarily within the United States, supporting national defense infrastructure. Workforce implications include specialized engineering and technical roles within Raytheon and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee contracts can lead to cost overruns if not carefully managed and monitored.
The long contract duration may present risks related to technological obsolescence or changing requirements.
Dependence on a single contractor for critical testing services could pose a risk if performance issues arise.

Positive Signals

Awarding under full and open competition suggests a competitive environment that can drive value.
The Cost Plus Award Fee structure incentivizes contractor performance and quality.
The contractor, Raytheon Company, has significant experience in defense systems, suggesting technical capability.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting the defense industry's need for testing and validation of complex radar systems. The market for such specialized defense engineering services is substantial, driven by ongoing government investment in national security and advanced technology. Comparable spending benchmarks would likely involve other large-scale defense contracts for system development, integration, and testing, often awarded to major defense contractors.

Small Business Impact

The provided data indicates that small business participation (sb) is false and there is no indication of a small business set-aside (ss). This suggests that the contract was not specifically targeted towards small businesses. Subcontracting opportunities for small businesses may exist, but they are not explicitly detailed in this award information. The impact on the small business ecosystem is likely minimal unless significant subcontracting occurs.

Oversight & Accountability

Oversight for this contract would typically be managed by the Missile Defense Agency's contracting officers and program managers. Accountability measures are embedded within the Cost Plus Award Fee structure, which links contractor compensation to performance metrics. Transparency is facilitated through contract award databases, though detailed performance reports and cost breakdowns may be less publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Missile Defense Systems
Radar Technology Development
Advanced Defense Research
Engineering Support Services
National Security Programs

Risk Flags

Cost Plus Award Fee contract type requires diligent oversight to manage costs.
Long contract duration may increase risk of technological obsolescence.
Performance metrics for award fee need clear definition and monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $156.3 million to RAYTHEON COMPANY. GROUND TEST SUPPORT 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 $156.3 million.

What is the period of performance?

Start: 2022-05-15. End: 2026-01-30.

What is Raytheon Company's track record with similar radar testing contracts for the Department of Defense?

Raytheon Company, now part of RTX, has a long and extensive history of providing complex systems and services to the Department of Defense, including radar technology. They are a primary contractor for numerous missile defense programs and have been involved in the development, testing, and sustainment of various radar systems, including those mentioned in the contract (AN/TPY-2, SBX, UEWR). Their track record typically involves large-scale, high-value contracts requiring significant technical expertise and program management capabilities. While specific performance metrics for past radar testing contracts are not detailed here, their continued role as a major defense contractor suggests a generally satisfactory performance history in meeting government requirements for complex engineering and support services.

How does the Cost Plus Award Fee (CPAF) structure compare to other contract types for this type of service?

The Cost Plus Award Fee (CPAF) contract type is often used for research and development or complex services where the scope may evolve or performance is difficult to define precisely upfront. Unlike fixed-price contracts, CPAF reimburses the contractor for allowable costs and includes a base fee plus an award amount determined by the government based on performance against specific criteria. This differs from Cost Plus Incentive Fee (CPIF), which adjusts profit based on cost targets, or Cost Plus Fixed Fee (CPFF), where the fee is fixed. For specialized engineering and testing services like radar support, CPAF offers flexibility to adapt to technical challenges and incentivizes the contractor to exceed minimum performance standards, potentially leading to better outcomes than a fixed-price contract, but also carries a risk of higher costs if not managed diligently.

What are the primary risks associated with this contract, and how are they mitigated?

Key risks for this contract include potential cost overruns inherent in CPAF contracts, the possibility of technological obsolescence given the long duration, and performance issues impacting critical defense systems. Mitigation strategies likely involve robust government oversight, including detailed cost monitoring, regular performance reviews against defined award criteria, and proactive program management to anticipate and address technical challenges. The contract's duration also necessitates careful planning for potential requirement changes or technology refreshes. Furthermore, Raytheon's established expertise in this domain serves as a mitigating factor against performance failures, though contingency planning remains crucial.

What is the historical spending pattern for ground test support for these specific radar systems?

Historical spending data for ground test support specifically for AN/TPY-2, SBX, and UEWR radars is not directly available in the provided data snippet. However, given that these are critical components of the U.S. missile defense architecture, sustained and significant investment in their testing and maintenance is expected. The Missile Defense Agency (MDA) budget typically allocates substantial funds towards system sustainment, testing, and upgrades. This $156 million contract over approximately 3.6 years suggests an average annual spending of roughly $43 million for this specific support function. This figure should be compared against previous contract awards for similar services to identify trends and assess consistency in spending.

How does the geographic location of the contractor (Massachusetts) impact the delivery of services?

The contractor, Raytheon Company, is based in Massachusetts. While the specific locations where the ground testing will occur are not detailed, the company's headquarters or major operational facilities being in Massachusetts means that a significant portion of the program management, engineering, and administrative functions may be based there. This could influence travel requirements for personnel and the logistics of coordinating testing activities, which might occur at various government or contractor sites. However, for highly specialized technical services like radar testing, the geographic location of the primary contractor is often less critical than their technical capabilities and the accessibility of testing facilities, which could be located elsewhere.

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: 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: $188,641,872

Exercised Options: $188,641,872

Current Obligation: $156,335,236

Actual Outlays: $64,462,587

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