Interior Dept. awards Raytheon $146M for R&D, highlighting potential cost-plus risks
Contract Overview
Contract Amount: $14,598,380 ($14.6M)
Contractor: Raytheon Company
Awarding Agency: Department of the Interior
Start Date: 2004-09-15
End Date: 2009-02-28
Contract Duration: 1,627 days
Daily Burn Rate: $9.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: RAYTHEON
Place of Performance
Location: TUCSON, PIMA County, ARIZONA, 85706
State: Arizona Government Spending
Plain-Language Summary
Department of the Interior obligated $14.6 million to RAYTHEON COMPANY for work described as: RAYTHEON Key points: 1. Significant R&D investment by the Department of the Interior. 2. Raytheon Company is the sole awardee, raising competition questions. 3. Cost-plus contract type introduces potential for cost overruns. 4. The R&D sector is critical for technological advancement.
Value Assessment
Rating: questionable
The contract's cost-plus fixed fee structure, while common for R&D, can lead to higher final costs than fixed-price contracts. Without specific benchmarks for this type of R&D, assessing value is difficult, but the potential for cost escalation is a concern.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Despite being awarded to Raytheon, the contract states 'FULL AND OPEN COMPETITION'. This suggests a competitive process occurred, but the single awardee might indicate specific technical requirements or a limited pool of qualified bidders.
Taxpayer Impact: Taxpayer funds are allocated for research and development. The cost-plus nature necessitates careful oversight to ensure efficient use of funds and prevent unnecessary expenditure.
Public Impact
Investment in scientific advancement and technological innovation. Potential for breakthroughs in physical, engineering, and life sciences. Government funding supports private sector research capabilities. Long-term contract duration suggests a sustained research effort.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus contract type
- Single awardee despite full and open competition
- Long contract duration (1627 days)
Positive Signals
- Investment in critical R&D sector
- Award to a major defense contractor
Sector Analysis
This contract falls under Research and Development in the Physical, Engineering, and Life Sciences (NAICS 541710). Spending in this sector is crucial for innovation but can be complex to manage due to its inherent uncertainties and evolving requirements.
Small Business Impact
The contract was awarded to Raytheon Company, a large corporation. There is no indication of subcontracting opportunities for small businesses within the provided data.
Oversight & Accountability
The cost-plus fixed fee contract type requires robust oversight to monitor costs, ensure progress aligns with objectives, and prevent potential overruns. The Department of the Interior must actively manage this contract to ensure accountability.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences
- Department of the Interior Contracting
- Departmental Offices Programs
Risk Flags
- Potential for cost overruns due to cost-plus contract type.
- Lack of transparency on specific R&D deliverables and success metrics.
- Limited insight into the competitive landscape despite 'full and open' status.
- No clear indication of small business participation.
Tags
research-and-development-in-the-physical, department-of-the-interior, az, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Interior awarded $14.6 million to RAYTHEON COMPANY. RAYTHEON
Who is the contractor on this award?
The obligated recipient is RAYTHEON COMPANY.
Which agency awarded this contract?
Awarding agency: Department of the Interior (Departmental Offices).
What is the total obligated amount?
The obligated amount is $14.6 million.
What is the period of performance?
Start: 2004-09-15. End: 2009-02-28.
What specific R&D objectives does this contract aim to achieve, and how will success be measured?
The contract's primary objective is Research and Development in the Physical, Engineering, and Life Sciences. Success measurement would likely involve milestones, deliverables, and the successful completion of research phases as defined in the contract's statement of work. Specific objectives are not detailed in the provided data but are crucial for assessing the contract's value and effectiveness.
Given the cost-plus nature, what mechanisms are in place to mitigate cost overruns and ensure fair pricing?
Cost-plus contracts typically include negotiated fixed fees, target costs, and incentive structures to manage spending. The Department of the Interior would employ financial oversight, regular audits, and performance reviews to monitor expenditures against the target cost and ensure Raytheon operates efficiently and within agreed-upon parameters.
How does this $146 million investment align with the Department of the Interior's broader strategic goals for R&D?
This investment likely supports the Department's strategic goals related to resource management, environmental science, or technological infrastructure relevant to its mission. Without specific details on the R&D focus, it's difficult to draw direct links, but such funding typically aims to enhance operational capabilities or address emerging challenges within the Interior's purview.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences
Product/Service Code: RESEARCH AND DEVELOPMENT › OTHER RESEARCH/DEVELOPMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: BASIC RESEARCH
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Contractor Details
Address: 1151 EAST HERMANS ROAD, TUCSON, AZ, 90
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $22,517,515
Exercised Options: $14,617,515
Current Obligation: $14,598,380
Timeline
Start Date: 2004-09-15
Current End Date: 2009-02-28
Potential End Date: 2009-02-28 00:00:00
Last Modified: 2012-06-27
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