DARPA awards Raytheon Company $44.1M for R&D, raising questions about competition and value

Contract Overview

Contract Amount: $44,156,430 ($44.2M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2015-12-10

End Date: 2020-01-31

Contract Duration: 1,513 days

Daily Burn Rate: $29.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: IGF::OT::IGF - DARPA RESEARCH PROJECT.

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $44.2 million to RAYTHEON COMPANY for work described as: IGF::OT::IGF - DARPA RESEARCH PROJECT. Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Significant duration of 1513 days suggests a complex, long-term research endeavor. 3. The contract type (Cost Plus Fixed Fee) can incentivize cost overruns. 4. No small business set-aside, indicating potential missed opportunities for smaller innovative firms. 5. Research and Development in Physical, Engineering, and Life Sciences is a critical but often unpredictable sector. 6. Geographic location in Arizona may not be optimal for accessing broader R&D talent pools.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and specific R&D focus. The Cost Plus Fixed Fee structure, while common for research, carries inherent risks of cost escalation. Without competitive bids, it's difficult to ascertain if the fixed fee adequately compensates the contractor for the effort or if it represents a premium. The total award amount of $44.1 million over approximately four years needs to be evaluated against the specific deliverables and milestones achieved, which are not detailed here.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This approach is typically justified when only one source is capable of meeting the requirement, often due to proprietary technology, unique expertise, or urgent needs. However, the lack of competition means there was no opportunity for multiple bidders to offer their best prices, potentially leading to a higher cost for the government than if it had been competed.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage market competition to secure the best possible pricing, potentially resulting in less efficient use of taxpayer funds.

Public Impact

The primary beneficiary is DARPA, which receives advanced research and development services crucial for national security. The contract supports innovation in physical, engineering, and life sciences, potentially leading to technological advancements. The geographic impact is concentrated in Arizona, where Raytheon Company's operations will be based. Workforce implications include employment for scientists, engineers, and support staff involved in the research project.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and value assessment.
Cost Plus Fixed Fee contract type can lead to cost overruns.
Lack of small business participation may limit access to innovative solutions.
Specific R&D outcomes and their impact are not detailed, making performance assessment difficult.

Positive Signals

Awarded to a well-established defense contractor, Raytheon Company, suggesting a degree of reliability.
Focus on R&D aligns with DARPA's mission to maintain technological superiority.
Long contract duration indicates a sustained commitment to a potentially complex research area.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. This sector is characterized by high innovation, significant government investment, and long development cycles. Comparable spending in this area often involves substantial funding for cutting-edge technologies. The market size for defense-related R&D is vast, with agencies like DARPA playing a crucial role in funding high-risk, high-reward projects that push technological boundaries.

Small Business Impact

This contract does not appear to have a small business set-aside, nor is there an indication of subcontracting goals for small businesses. This means that opportunities for small, innovative firms to participate in this significant R&D project were likely limited. The absence of small business involvement could mean missed opportunities for leveraging specialized expertise or fostering growth within the small business defense industrial base.

Oversight & Accountability

Oversight for this contract would typically fall under DARPA's program managers and potentially the Department of Defense's Inspector General. Transparency is limited due to the sole-source nature and the proprietary aspects often associated with R&D. Accountability would be measured against the achievement of research milestones and deliverables outlined in the contract, though specific performance metrics are not provided here.

Related Government Programs

DARPA Research Projects
Defense Advanced Research Projects Agency Contracts
Raytheon Company Defense Contracts
Cost Plus Fixed Fee Contracts
Sole Source Research and Development Contracts

Risk Flags

Sole-source award
Cost-plus contract type
Lack of competition
No small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.2 million to RAYTHEON COMPANY. IGF::OT::IGF - DARPA RESEARCH PROJECT.

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Advanced Research Projects Agency).

What is the total obligated amount?

The obligated amount is $44.2 million.

What is the period of performance?

Start: 2015-12-10. End: 2020-01-31.

What specific research objectives does this contract aim to achieve for DARPA?

The provided data indicates this is a 'DARPA RESEARCH PROJECT' focused on 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)'. However, the specific objectives, research questions, or technological advancements DARPA sought to achieve through this $44.1 million contract with Raytheon Company are not detailed in the available information. DARPA typically funds high-risk, high-reward research to maintain U.S. technological superiority. Without further documentation, the precise scientific or engineering goals remain unknown, making it difficult to assess the project's alignment with broader defense innovation strategies or its potential impact.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for R&D projects of this scale?

The Cost Plus Fixed Fee (CPFF) contract type is common for research and development where the scope of work is not precisely defined at the outset, or where innovation involves significant uncertainty. Under CPFF, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. While this structure allows flexibility for evolving R&D needs, it carries a risk of cost overruns if initial cost estimates are inaccurate or if unforeseen challenges arise. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers less cost certainty for the government but greater flexibility for the contractor to pursue innovative solutions. Other R&D contract types include Cost Plus Incentive Fee (CPIF), which adds performance incentives, or Cost Plus Award Fee (CPAF), where the fee is based on subjective performance evaluations. The choice of CPFF here suggests DARPA prioritized flexibility and contractor engagement in an uncertain R&D environment over strict cost control.

What are the implications of awarding this contract solely to Raytheon Company without competition?

Awarding this contract on a sole-source basis to Raytheon Company means that the government did not solicit bids from other potential contractors. This limits the government's ability to leverage market competition to achieve the best possible price and identify the most innovative solutions. Justifications for sole-source awards typically include unique capabilities, proprietary technology, or urgent needs that only one entity can meet. However, without competition, there is a risk that the government may pay a higher price than necessary and miss out on potentially superior alternative approaches or technologies that other firms might have offered. This lack of competition reduces transparency and makes it harder to benchmark the value received against market alternatives.

What is the typical duration for R&D contracts of this magnitude, and how does this contract's duration compare?

The duration of R&D contracts can vary significantly based on the complexity, scope, and nature of the research. Contracts for fundamental research or early-stage technology development, like those often funded by DARPA, can span several years to allow for exploration, experimentation, and iteration. This contract has a duration of 1513 days, which is approximately 4.14 years. This duration is not unusually long for a significant R&D endeavor, especially one involving complex physical, engineering, or life sciences. It suggests a sustained effort is required to achieve the project's objectives, allowing the contractor sufficient time to conduct research, analyze results, and potentially develop prototypes or proof-of-concept demonstrations.

Are there any indications of performance metrics or success criteria associated with this contract?

The provided data does not include specific performance metrics, milestones, or success criteria for this DARPA research project. For Cost Plus Fixed Fee contracts, particularly in R&D, performance is often assessed against the achievement of defined research objectives, the delivery of reports, prototypes, or data, and the overall progress made towards the project's goals. DARPA program managers typically monitor progress closely and may have specific technical milestones that the contractor must meet to receive continued funding or to achieve the fixed fee. However, without access to the contract's statement of work or performance work statement, a detailed assessment of the contract's performance criteria and how they are measured is not possible.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 1151 E HERMANS RD, TUCSON, AZ, 85756

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: $51,429,787

Exercised Options: $44,594,725

Current Obligation: $44,156,430

Subaward Activity

Number of Subawards: 108

Total Subaward Amount: $13,999,769

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline