DoD Awards Raytheon $27M Cost Plus Fixed Fee Contract for Custom Computer Programming Services

Contract Overview

Contract Amount: $27,079,146 ($27.1M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2018-04-27

End Date: 2021-03-31

Contract Duration: 1,069 days

Daily Burn Rate: $25.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: PURSUANT TO DFARS CLAUSE 252.216-7006, ORDERING, AND THE TERMS AND CONDITIONS OF CONTRACT W15P7T-14-D-C006, TASK ORDER KZ04 IS HEREBY ISSUED ON A COST PLUS FIXED FEE BASIS.

Place of Performance

Location: FORT WAYNE, ALLEN County, INDIANA, 46808

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $27.1 million to RAYTHEON COMPANY for work described as: PURSUANT TO DFARS CLAUSE 252.216-7006, ORDERING, AND THE TERMS AND CONDITIONS OF CONTRACT W15P7T-14-D-C006, TASK ORDER KZ04 IS HEREBY ISSUED ON A COST PLUS FIXED FEE BASIS. Key points: 1. Contract awarded to Raytheon Company for custom computer programming services. 2. Significant value of $27.1 million over a 3-year period. 3. Awarded under full and open competition, suggesting market availability. 4. Cost Plus Fixed Fee (CPFF) pricing structure can incentivize cost overruns. 5. Sector: Information Technology (Custom Computer Programming).

Value Assessment

Rating: questionable

The Cost Plus Fixed Fee (CPFF) structure, while common, carries inherent risks. It can incentivize contractors to increase costs to achieve a higher fixed fee, potentially leading to less favorable pricing for the government compared to fixed-price contracts, especially if cost controls are not robust.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This method generally promotes competitive pricing and allows the government to select the best value offering.

Taxpayer Impact: While competition is positive, the CPFF structure requires diligent oversight to ensure taxpayer funds are used efficiently and effectively, mitigating potential cost escalations.

Public Impact

Custom computer programming services are essential for modern defense operations. The contract duration of over 3 years suggests a long-term need for these services. Raytheon's involvement indicates reliance on established defense contractors. The CPFF structure necessitates strong government oversight to manage costs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) pricing structure
Lack of specific performance metrics in provided data
Potential for cost overruns with CPFF

Positive Signals

Awarded under Full and Open Competition
Long contract duration suggests critical need
Established contractor (Raytheon)

Sector Analysis

This contract falls within the Information Technology sector, specifically custom computer programming services. Spending in this area is critical for modernizing government systems and maintaining technological superiority. Benchmarks for similar contracts vary widely based on complexity and scope.

Small Business Impact

The data indicates this contract was not awarded to a small business (ss: false, sb: false). This suggests the scope or nature of the services required may have favored larger, established companies with specialized capabilities.

Oversight & Accountability

The Cost Plus Fixed Fee (CPFF) structure necessitates robust government oversight to ensure cost control and prevent contractor inefficiencies. DFARS clause 252.216-7006 outlines ordering procedures, but detailed oversight mechanisms for this specific task order are not provided.

Related Government Programs

Custom Computer Programming Services
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Cost Plus Fixed Fee (CPFF) pricing structure
Potential for cost overruns
Lack of detailed performance metrics
No small business participation noted
Limited insight into specific service deliverables

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.1 million to RAYTHEON COMPANY. PURSUANT TO DFARS CLAUSE 252.216-7006, ORDERING, AND THE TERMS AND CONDITIONS OF CONTRACT W15P7T-14-D-C006, TASK ORDER KZ04 IS HEREBY ISSUED ON A COST PLUS FIXED FEE BASIS.

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 $27.1 million.

What is the period of performance?

Start: 2018-04-27. End: 2021-03-31.

What specific programming services are being procured, and how do they align with current defense modernization goals?

The provided data specifies 'Custom Computer Programming Services' under NAICS code 541511. While essential for IT infrastructure, the exact nature of these services and their direct contribution to specific defense modernization goals are not detailed. Further analysis would require understanding the project's objectives, such as software development, system integration, or legacy system modernization, to assess its strategic value.

How effectively will the government manage cost risks associated with the Cost Plus Fixed Fee (CPFF) structure over the contract's duration?

Managing cost risks in a CPFF contract hinges on stringent government oversight, including detailed cost audits, performance monitoring, and clear communication channels with the contractor. The government must actively track expenditures, validate costs, and ensure the fixed fee remains appropriate for the effort expended. Without robust oversight processes, there's a heightened risk of cost overruns and reduced value for taxpayer money.

What is the expected impact of these custom programming services on the Department of the Army's operational effectiveness?

The impact on operational effectiveness depends entirely on the specific functions the custom programming services will support. If these services enhance critical command and control systems, improve data analysis capabilities, or streamline logistical operations, the impact could be significant. Conversely, if the services address less critical IT functions, the operational impact might be marginal. A clear understanding of the project's intended use is necessary for a precise assessment.

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 FIXED FEE (U)

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: $27,079,146

Exercised Options: $27,079,146

Current Obligation: $27,079,146

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $99,000

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