Raytheon Company awarded $27.19M for Interim Contractor Support, with a significant portion allocated to custom computer programming

Contract Overview

Contract Amount: $27,190,816 ($27.2M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2017-02-28

End Date: 2023-02-23

Contract Duration: 2,186 days

Daily Burn Rate: $12.4K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS INCENTIVE FEE

Sector: IT

Official Description: IGF::CL,CT::IGF PURSUANT TO DFARS CLAUSE 252.216-7006, ORDERING, AND THE TERMS AND CONDITIONS OF CONTRACT W15P7T-14-D-C006, TASK ORDER KZ03 IS HEREBY ISSUED ON A COST PLUS FIXED FEE BASIS IN THE AMOUNT OF $2,392,236. ALL WORK SHALL BE IN ACCORDANCE WITH THE ATTACHED PERFORMANCE WORK STATEMENT ENTITLED, "INTERIM CONTRACTOR SUPPORT (ICS)" DATED 8 FEBRUARY 2017, LOCATED IN SECTION J, ATTACHMENT 0001.

Place of Performance

Location: FORT WAYNE, ALLEN County, INDIANA, 46808

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $27.2 million to RAYTHEON COMPANY for work described as: IGF::CL,CT::IGF PURSUANT TO DFARS CLAUSE 252.216-7006, ORDERING, AND THE TERMS AND CONDITIONS OF CONTRACT W15P7T-14-D-C006, TASK ORDER KZ03 IS HEREBY ISSUED ON A COST PLUS FIXED FEE BASIS IN THE AMOUNT OF $2,392,236. ALL WORK SHALL BE IN ACCORDANCE WITH THE ATTACHED PERFORMANCE … Key points: 1. Contract awarded on a Cost Plus Fixed Fee basis, indicating potential for cost overruns if not managed closely. 2. The contract spans over six years, suggesting a long-term need for the services provided. 3. Full and open competition was utilized, which typically fosters competitive pricing. 4. The primary NAICS code (541511) points to custom computer programming services, a critical area for defense modernization. 5. The contract's value is substantial, reflecting the importance of the support services to the Department of the Army. 6. The task order was issued under a larger indefinite-delivery/indefinite-quantity contract, suggesting a framework for ongoing support needs.

Value Assessment

Rating: fair

The contract's Cost Plus Fixed Fee (CPFF) structure, while common, requires diligent oversight to ensure value for money. Benchmarking against similar custom computer programming services contracts is challenging without more granular data on the specific tasks performed. However, the duration and scope suggest a significant investment. The fixed fee component provides some cost certainty, but the 'cost plus' element means actual costs incurred by the contractor are reimbursed, necessitating robust auditing.

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 had the opportunity to submit proposals. This competitive environment is generally expected to drive down prices and encourage innovation. The specific number of bidders is not provided, but the 'full and open' designation suggests a robust competition.

Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which aims to secure the best possible price for the required services and reduce the risk of overpayment.

Public Impact

The Department of the Army benefits from continuous support for critical systems, ensuring operational readiness. Services include custom computer programming, likely supporting the development, maintenance, or enhancement of defense software and systems. The contract's duration implies a sustained impact on the operational capabilities of the Army. Workforce implications may include the need for specialized IT and programming skills, potentially impacting both government personnel and contractor employment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize contractors to incur costs, requiring strong oversight to manage expenditures.
The long duration of the contract (over 6 years) increases the risk of scope creep or evolving requirements not being adequately managed.
Lack of specific performance metrics in the provided data makes it difficult to assess the contractor's efficiency and effectiveness.
The 'Interim Contractor Support' designation might imply a temporary solution, raising questions about long-term strategy and potential for vendor lock-in.

Positive Signals

Awarded under full and open competition, suggesting a competitive process that should yield fair pricing.
The contract specifies a fixed fee, providing a degree of cost predictability for the government.
The task order is issued under an existing IDIQ contract, indicating a pre-established framework and potentially streamlined procurement.
The contract specifies a clear performance work statement, outlining the expected deliverables and scope of work.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically custom computer programming services. The market for such services within the defense industry is substantial, driven by the continuous need for advanced software solutions to maintain technological superiority. Comparable spending benchmarks would typically involve analyzing other large-scale IT support contracts awarded by the Department of Defense or other federal agencies for similar custom development and maintenance services.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a set-aside. However, the prime contractor, Raytheon Company, may engage small businesses as subcontractors, which would be detailed in their subcontracting plan, not present in this data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army, with potential involvement from the Department of Defense Inspector General. The Cost Plus Fixed Fee (CPFF) structure necessitates rigorous financial oversight to audit incurred costs and ensure the fixed fee is justified. Transparency is facilitated by the contract's public award data, but detailed performance reporting and audits would be internal oversight mechanisms.

Related Government Programs

Defense IT Modernization Programs
Custom Software Development Services
Interim Contractor Support Contracts
Department of the Army IT Services
Cost Plus Fixed Fee Contracts

Risk Flags

Cost Plus Fixed Fee structure requires diligent oversight.
Long contract duration increases risk of scope creep.
Performance metrics not detailed in summary data.
Potential for 'Interim' support to become long-term dependency.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.2 million to RAYTHEON COMPANY. IGF::CL,CT::IGF PURSUANT TO DFARS CLAUSE 252.216-7006, ORDERING, AND THE TERMS AND CONDITIONS OF CONTRACT W15P7T-14-D-C006, TASK ORDER KZ03 IS HEREBY ISSUED ON A COST PLUS FIXED FEE BASIS IN THE AMOUNT OF $2,392,236. ALL WORK SHALL BE IN ACCORDANCE WITH THE ATTACHED PERFORMANCE WORK STATEMENT ENTITLED, "INTERIM CONTRACTOR SUPPORT (ICS)" DATED 8 FEBRUARY 2017, LOCATED IN SECTION J, ATTACHMENT 0001.

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $27.2 million.

What is the period of performance?

Start: 2017-02-28. End: 2023-02-23.

What is the historical spending pattern for Interim Contractor Support (ICS) by the Department of the Army under contract W15P7T-14-D-C006?

The provided data focuses on a single task order (KZ03) issued under the larger contract W15P7T-14-D-C006. This specific task order was awarded for $2,392,236 on a Cost Plus Fixed Fee basis with an estimated total amount of $27,190,815.74 and a duration of 2186 days (approximately 6 years). To understand the historical spending pattern for ICS under this specific IDIQ contract, one would need to examine all issued task orders against W15P7T-14-D-C006. This would involve analyzing the total value of all task orders, their respective award dates, fee structures (CPFF, CPIF, etc.), and the services rendered under each. Without access to the full contract history and all task orders, a comprehensive spending pattern cannot be determined solely from this single task order data.

How does the fixed fee component of this Cost Plus Fixed Fee (CPFF) contract compare to industry benchmarks for similar custom computer programming services?

Determining the precise benchmark for the fixed fee in this CPFF contract requires detailed knowledge of the contractor's proposed costs, the complexity of the custom computer programming services, and the specific risks involved. CPFF contracts reimburse the contractor for allowable costs plus a fixed fee representing profit. The fixed fee is negotiated upfront and generally remains constant regardless of the final cost of performance. Industry benchmarks for fixed fees in IT services can range significantly, often between 5% to 15% of the estimated cost, depending on factors like contract type (incentive vs. fixed fee), competition, and the level of technical difficulty and risk. Without the estimated cost of performance and the specific details of the services, a direct comparison is difficult. However, the fact that it's a fixed fee provides some predictability for the government regarding the contractor's profit margin.

What are the key performance indicators (KPIs) used to measure the success of the 'Interim Contractor Support (ICS)' services provided under this task order?

The provided data does not explicitly list the Key Performance Indicators (KPIs) for the 'Interim Contractor Support (ICS)' services under task order KZ03. Typically, for custom computer programming and IT support contracts, KPIs would focus on aspects such as system uptime, response times for technical support, software defect rates, on-time delivery of development milestones, and adherence to security protocols. The Performance Work Statement (PWS) referenced in the data (Section J, Attachment 0001) would contain the detailed requirements and expected performance standards. Effective oversight would involve tracking these KPIs regularly to ensure the contractor is meeting its obligations and delivering value.

What is Raytheon Company's track record with Cost Plus Fixed Fee (CPFF) contracts within the Department of Defense?

Raytheon Company (now RTX) has a long and extensive history of performing contracts with the Department of Defense (DoD), including numerous Cost Plus Fixed Fee (CPFF) arrangements. As a major defense contractor, they regularly engage in complex, long-term projects that often utilize CPFF structures due to the inherent uncertainties in research, development, and integration of advanced systems. While specific performance metrics for all their CPFF contracts are not publicly detailed in this context, their continued success in winning and executing large DoD contracts suggests a generally positive track record in managing such agreements. CPFF contracts require robust government oversight to manage costs effectively, and Raytheon's experience implies familiarity with these oversight requirements.

How does the total value of this task order ($27.19M) compare to the overall IT spending of the Department of the Army in fiscal year 2017?

The total value of this task order is approximately $27.19 million. In fiscal year 2017, the Department of the Army's overall IT spending was substantial, often measured in the billions of dollars. For instance, reports from sources like the Government Accountability Office (GAO) and the DoD's own IT budget documents indicate that the Army's IT budget typically ranges from $5 billion to over $10 billion annually, covering a wide array of services including infrastructure, cybersecurity, software development, and end-user support. Therefore, while $27.19 million represents a significant investment for a single task order, it constitutes a relatively small fraction of the Army's total IT expenditure for that year. This context highlights that the contract, while large in absolute terms, is likely one of many supporting the Army's vast IT ecosystem.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming 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

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 1010 PRODUCTION RD, FORT WAYNE, IN, 46808

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $27,190,816

Exercised Options: $27,190,816

Current Obligation: $27,190,816

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $407,663

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15P7T14DC006

IDV Type: IDC

Timeline