DoD awards Raytheon $22.7M for 24 common sensor payloads, highlighting advanced navigation system manufacturing

Contract Overview

Contract Amount: $22,703,136 ($22.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2016-03-22

End Date: 2018-10-31

Contract Duration: 953 days

Daily Burn Rate: $23.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THIS DELIVERY ORDER IS FOR THE PROCUREMENT OF 24 COMMON SENSOR PAYLOAD UNITS.

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75070

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $22.7 million to RAYTHEON COMPANY for work described as: THIS DELIVERY ORDER IS FOR THE PROCUREMENT OF 24 COMMON SENSOR PAYLOAD UNITS. Key points: 1. Value for money assessed through firm-fixed-price contract, aiming for cost certainty. 2. Competition dynamics indicate a full and open process, potentially driving competitive pricing. 3. Risk indicators include contract duration and reliance on a single vendor for specialized components. 4. Performance context is tied to the delivery of critical sensor units for defense applications. 5. Sector positioning within the navigation, guidance, and control systems manufacturing industry.

Value Assessment

Rating: good

The firm-fixed-price contract type suggests an effort to control costs. Benchmarking against similar procurements for sensor payloads would provide a clearer picture of value. The total award of $22.7 million for 24 units implies a per-unit cost of approximately $945,968. This figure needs comparison with market rates for comparable advanced sensor systems to definitively assess value.

Cost Per Unit: Approximately $945,968 per unit, requires market benchmarking for definitive assessment.

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, suggesting that multiple vendors had the opportunity to bid. The specific number of bidders is not provided, but this procurement method generally fosters price discovery and encourages competitive offers. The agency likely sought the best value through a broad solicitation.

Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it increases the likelihood of obtaining competitive pricing and potentially better terms due to vendor rivalry.

Public Impact

Benefits the Department of Defense by providing essential sensor payload units. Delivers 24 common sensor payload units critical for navigation and guidance systems. Geographic impact is centered in Texas, where the contractor is located. Workforce implications may include specialized manufacturing roles within Raytheon's operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if initial estimates do not fully capture complexities.
Dependence on a single contractor for specialized components could create supply chain risks.
Longer-than-average contract duration (953 days) may introduce risks related to technological obsolescence or changing requirements.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Full and open competition suggests a robust bidding process.
Award to a known defense contractor like Raytheon may indicate a level of confidence in their capabilities.

Sector Analysis

This contract falls within the Navigation, Detection, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing sector. This industry is characterized by high technological sophistication and significant government procurement, particularly from defense agencies. The market size is substantial, driven by ongoing defense modernization efforts and the need for advanced sensing and control systems. This specific procurement aligns with broader trends in enhancing military operational capabilities through improved sensor technology.

Small Business Impact

The contract indicates that small business participation was not a primary set-aside consideration, as indicated by 'sb: false'. There is no explicit mention of subcontracting goals for small businesses within the provided data. Further analysis would be needed to determine if any small business subcontracting opportunities were mandated or voluntarily pursued by the prime contractor.

Oversight & Accountability

Oversight for this contract is managed by the Defense Contract Management Agency (DCMA). Accountability measures are inherent in the firm-fixed-price structure, which places cost risk on the contractor. Transparency is facilitated by the contract award data being publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Advanced GPS Receiver Technology
Advanced Navigation Systems
Sensor Technology Development
Military Aircraft Systems
Guidance and Control Systems

Risk Flags

Potential for long-term sustainment costs not fully captured.
Integration risks with existing or future defense platforms.
Technological obsolescence risk due to contract duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.7 million to RAYTHEON COMPANY. THIS DELIVERY ORDER IS FOR THE PROCUREMENT OF 24 COMMON SENSOR PAYLOAD UNITS.

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $22.7 million.

What is the period of performance?

Start: 2016-03-22. End: 2018-10-31.

What is Raytheon Company's track record with similar sensor payload procurements for the Department of Defense?

Raytheon Company, now part of RTX Corporation, has a long-standing history as a major defense contractor involved in numerous sensor and avionics systems. Their track record with similar sensor payload procurements is extensive, encompassing a wide range of platforms and applications, including air, land, and sea systems. Historically, Raytheon has been a key supplier for advanced radar, electro-optical/infrared (EO/IR) systems, and navigation components. While specific performance metrics for past, directly comparable contracts are not detailed here, their consistent selection for complex defense programs suggests a generally reliable performance history. However, like any large contractor, they have faced scrutiny and performance reviews on various programs over the years, necessitating ongoing oversight by agencies like the DCMA.

How does the per-unit cost of these common sensor payloads compare to industry benchmarks?

The per-unit cost for these 24 common sensor payload units is approximately $945,968 ($22,703,136 / 24). Benchmarking this figure requires detailed comparison with similar advanced sensor systems procured by the DoD or other government agencies. Factors influencing this cost include the specific technological capabilities (e.g., resolution, range, processing power), the level of customization, the maturity of the technology, and the volume of the order. Without access to specific technical specifications and a broader market analysis of comparable systems, it is difficult to definitively state whether this cost is high or low. However, given the advanced nature typically associated with 'common sensor payloads' for defense applications, this price point may fall within the expected range for sophisticated military-grade equipment.

What are the primary risks associated with this specific delivery order?

The primary risks associated with this delivery order include potential schedule delays, cost overruns (though mitigated by the firm-fixed-price structure), and technological obsolescence. The duration of the contract (953 days, approximately 2.6 years) increases the likelihood of encountering unforeseen technical challenges or shifts in operational requirements. Dependence on a single contractor, Raytheon, for these specialized units also presents a supply chain risk. Furthermore, the 'common sensor payload' designation implies integration into larger systems; any issues with the payload's performance or compatibility could impact the broader defense platforms they are intended for. Ensuring the technology remains relevant throughout the development and deployment phases is also a consideration.

What is the expected program effectiveness or impact of these sensor payloads?

The expected program effectiveness hinges on the 'common sensor payload' units enhancing the situational awareness, navigation, and targeting capabilities of the defense platforms they are integrated into. By providing standardized, advanced sensing capabilities, these payloads aim to improve operational efficiency, reduce reliance on disparate systems, and potentially lower lifecycle costs through commonality. Their effectiveness will be measured by their reliability, accuracy, and contribution to mission success across various defense scenarios. Successful deployment should lead to improved intelligence gathering, more precise navigation, and enhanced combat effectiveness for the end-users within the Department of Defense.

How does this award fit into the broader historical spending patterns for navigation and sensor systems by the DoD?

This $22.7 million award for 24 sensor payloads fits within the Department of Defense's consistent and substantial historical spending on navigation, guidance, and sensor systems. The DoD is a primary driver of innovation and procurement in this sector, allocating billions annually to maintain and modernize its technological edge. Spending in this area is driven by the need for advanced capabilities in intelligence, surveillance, reconnaissance (ISR), electronic warfare, and precision guidance. Awards like this, even if for a specific set of units, reflect the ongoing investment in upgrading foundational components that underpin a wide array of military operations. The trend is towards more integrated, multi-functional, and intelligent sensor systems, making procurements like this a regular feature of defense acquisition.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: FIRE CONTROL EQPT.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2501 W UNIVERSITY DR, MC KINNEY, TX, 75071

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $22,703,136

Exercised Options: $22,703,136

Current Obligation: $22,703,136

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15P7T08DS602

IDV Type: IDC

Timeline