Raytheon Company awarded $36.2M contract for advanced defense research supporting anti-access/area denial capabilities

Contract Overview

Contract Amount: $36,166,626 ($36.2M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2020-01-14

End Date: 2023-12-29

Contract Duration: 1,445 days

Daily Burn Rate: $25.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 22

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: THE CONTRACTOR SHALL SUPPORT THE SYSTEM OF SYSTEMS ENHANCED SMALL UNIT (SESU) PHASE 1 AND 2 PROGRAM AND DEVELOP CAPABILITIES AGAINST THE ADVERSARY'S ANTI-ACCESS / AREA DENIAL (A2/AD) CAPABILITIES.

Place of Performance

Location: TEWKSBURY, MIDDLESEX County, MASSACHUSETTS, 01876

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $36.2 million to RAYTHEON COMPANY for work described as: THE CONTRACTOR SHALL SUPPORT THE SYSTEM OF SYSTEMS ENHANCED SMALL UNIT (SESU) PHASE 1 AND 2 PROGRAM AND DEVELOP CAPABILITIES AGAINST THE ADVERSARY'S ANTI-ACCESS / AREA DENIAL (A2/AD) CAPABILITIES. Key points: 1. Contract focuses on critical research and development for national security. 2. Significant investment in countering adversary A2/AD capabilities. 3. Long-duration contract spanning nearly four years. 4. Utilizes a Cost Plus Fixed Fee pricing structure. 5. Awarded under full and open competition. 6. Contractor has extensive experience in defense systems.

Value Assessment

Rating: good

The contract value of $36.2 million over approximately four years for advanced R&D in a highly specialized defense area appears reasonable. Benchmarking against similar complex research contracts is challenging due to the unique nature of A2/AD counter-capabilities. However, the Cost Plus Fixed Fee structure allows for flexibility in research while providing a defined profit margin for the contractor, suggesting a balanced approach to value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The presence of 22 bidders suggests a robust competitive environment for this specialized research and development effort. A high number of bidders generally leads to better price discovery and potentially more innovative solutions for the government.

Taxpayer Impact: The extensive competition for this contract is beneficial for taxpayers, as it likely drove down costs and ensured the government received competitive proposals for developing advanced defense capabilities.

Public Impact

Benefits the Department of Defense by enhancing capabilities against advanced threats. Delivers critical research and development for national security. Primarily impacts the defense technology sector and associated workforce. Supports the development of advanced military systems and strategies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can sometimes lead to cost overruns if not managed tightly.
The long duration of the contract requires sustained oversight to ensure progress aligns with objectives.

Positive Signals

Awarded through full and open competition, indicating a competitive process.
Contractor's extensive experience in defense R&D suggests a strong likelihood of successful execution.
Focus on a critical national security need (A2/AD) aligns with strategic priorities.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The market for advanced defense research, particularly in countering Anti-Access/Area Denial (A2/AD) capabilities, is highly specialized and dominated by a few large defense contractors. Spending in this niche is driven by evolving geopolitical threats and the need for technological superiority.

Small Business Impact

There is no indication of small business set-asides for this contract, and the prime contractor is Raytheon Company, a large defense firm. Subcontracting opportunities for small businesses may exist, but they are not explicitly detailed in the provided data. The primary focus appears to be on large-scale, complex R&D managed by a prime contractor with significant resources.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Advanced Research Projects Agency (DARPA) program managers. Accountability measures are inherent in the Cost Plus Fixed Fee structure, requiring detailed reporting and justification of costs. Transparency is generally maintained through contract reporting mechanisms, though specific details of the research may be classified.

Related Government Programs

Advanced Weapons Systems Development
Missile Defense Research
Electronic Warfare Systems
Strategic Defense Initiatives

Risk Flags

Cost Overrun Risk
Scope Creep Potential
Technological Obsolescence
Long-Term Project Viability

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.2 million to RAYTHEON COMPANY. THE CONTRACTOR SHALL SUPPORT THE SYSTEM OF SYSTEMS ENHANCED SMALL UNIT (SESU) PHASE 1 AND 2 PROGRAM AND DEVELOP CAPABILITIES AGAINST THE ADVERSARY'S ANTI-ACCESS / AREA DENIAL (A2/AD) CAPABILITIES.

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 $36.2 million.

What is the period of performance?

Start: 2020-01-14. End: 2023-12-29.

What is Raytheon Company's track record with similar DARPA contracts?

Raytheon Company, now part of RTX, has a long and extensive history of working with DARPA and other defense agencies on complex research and development programs. They are known for their expertise in areas such as advanced sensors, integrated defense systems, and electronic warfare. Their track record includes numerous successful contract completions, often involving cutting-edge technologies and challenging technical requirements. While specific details of past performance on highly classified or sensitive programs are not publicly available, their consistent selection for significant R&D contracts by DARPA indicates a strong and reliable performance history in delivering innovative solutions aligned with national security objectives.

How does the $36.2 million value compare to other A2/AD research contracts?

The $36.2 million contract value for the SESU Phase 1 and 2 program is within a typical range for advanced research and development efforts focused on highly specialized defense capabilities like countering Anti-Access/Area Denial (A2/AD). Contracts in this domain often involve significant upfront investment in research, prototyping, and system integration. While exact comparisons are difficult due to the proprietary nature of defense R&D and varying contract scopes, similar DARPA-funded projects targeting complex threat environments can range from tens to hundreds of millions of dollars over their lifecycle. This particular contract's value suggests a focused, multi-year effort on specific aspects of A2/AD counter-capabilities rather than a full-scale system development.

What are the primary risks associated with this Cost Plus Fixed Fee contract?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract, such as this one, revolve around potential cost growth and ensuring contractor efficiency. While the fixed fee provides a defined profit margin, the 'cost plus' component means the government reimburses the contractor for allowable costs incurred. If the research proves more complex or expensive than initially anticipated, the total cost to the government could exceed initial projections. Effective oversight is crucial to monitor expenditures, ensure costs are reasonable and allocable, and prevent scope creep. The contractor also faces a risk if they cannot complete the work within the estimated costs, as their fee is fixed, but the government bears the primary financial risk of cost overruns.

How effective is DARPA in managing R&D contracts for national security?

DARPA (Defense Advanced Research Projects Agency) is widely regarded as highly effective in managing R&D contracts for national security. Its core mission is to make pivotal investments in breakthrough technologies for national security, preventing technological surprise and creating future options for U.S. military advantage. DARPA operates with a unique model, employing program managers with deep technical expertise and significant autonomy to identify and pursue high-risk, high-reward research. They foster innovation by working with a diverse range of performers, including academia, industry, and government labs, and often transition successful technologies to the military services for further development and fielding. Their success is measured by the transformative technologies they have enabled, many of which have had profound impacts on military capabilities and the broader technology landscape.

What are historical spending patterns for R&D in defense against A2/AD threats?

Historical spending patterns for R&D in defense against Anti-Access/Area Denial (A2/AD) threats have shown a consistent and increasing trend over the past two decades. As potential adversaries have developed more sophisticated capabilities, including advanced missile systems, submarines, and electronic warfare, the U.S. Department of Defense has prioritized investments in technologies to counter these threats. This includes funding for research into areas such as long-range precision strike, advanced sensors, resilient communication networks, cyber warfare, and counter-missile technologies. Agencies like DARPA, along with military service research labs, have been key recipients of these funds. Spending fluctuates based on perceived threats and strategic priorities, but the overall trajectory indicates a sustained commitment to maintaining technological superiority in contested environments.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Solicitation ID: HR001119S0025

Offers Received: 22

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 50 APPLE HILL DR, TEWKSBURY, MA, 01876

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: $36,937,429

Exercised Options: $36,937,429

Current Obligation: $36,166,626

Actual Outlays: $1,602,294

Subaward Activity

Number of Subawards: 13

Total Subaward Amount: $14,823,836

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline