Raytheon Company awarded $19.3M contract for logistics consulting services by the Department of the Navy

Contract Overview

Contract Amount: $19,304,991 ($19.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2007-11-08

End Date: 2009-09-30

Contract Duration: 692 days

Daily Burn Rate: $27.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: REMANUFACTURE-

Place of Performance

Location: LEXINGTON, MIDDLESEX County, MASSACHUSETTS, 02421

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $19.3 million to RAYTHEON COMPANY for work described as: REMANUFACTURE- Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract's fixed-price nature aims to control costs for the government. 3. Duration of 692 days indicates a medium-term engagement for services. 4. The award falls under professional services, specifically logistics consulting. 5. The specific NAICS code 541614 points to a niche consulting area. 6. The contract was awarded by the Department of the Navy, a major defense agency.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without more granular data on the scope of 'Process, Physical Distribution, and Logistics Consulting Services'. However, the total award of $19.3 million over approximately two years suggests a significant investment in specialized expertise. The fixed-price structure is generally favorable for cost control, but the ultimate value depends on the effectiveness and efficiency of the consulting provided. Comparing this to other similar logistics consulting contracts within the Department of Defense would provide a clearer picture of whether the pricing is competitive for the services rendered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. The number of bidders is not specified, but this method generally fosters a competitive environment, which can lead to better pricing and service offerings for the government. The open nature of the competition suggests that the Department of the Navy sought the best possible solution from the market.

Taxpayer Impact: A full and open competition typically benefits taxpayers by driving down prices through market forces and ensuring that the government receives the most advantageous offer available.

Public Impact

The Department of the Navy benefits from enhanced logistics and distribution processes. Improved efficiency in physical distribution and supply chain management. Potential for cost savings and operational improvements within naval logistics. The contract supports specialized consulting services, contributing to the professional services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it difficult to assess the true impact of the consulting services.
The broad nature of 'logistics consulting' could lead to scope creep if not tightly managed.
Reliance on external consultants may not build long-term internal capabilities for the Navy.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that could yield good value.
Fixed-price contract type helps to control costs and provides budget certainty.
The contract addresses a critical area of defense operations: logistics and distribution.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically focusing on management and technical consulting. The market for logistics consulting is substantial, driven by the need for efficiency and cost-effectiveness in complex supply chains, particularly within government and defense. Comparable spending in this area often involves optimizing distribution networks, inventory management, and transportation strategies. The Department of Defense, as a major consumer of such services, frequently engages consultants to refine its vast logistical operations.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a result, small businesses were likely not the primary focus of this award. There is no explicit information on subcontracting requirements for small businesses. The impact on the small business ecosystem is likely minimal unless Raytheon Company actively engages small businesses as subcontractors for specialized support within this logistics consulting engagement.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the Department of the Navy. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver specified services within the agreed-upon price. Transparency is generally facilitated through contract award databases, though the detailed performance and deliverables are often internal. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Logistics Modernization Programs
Naval Supply Systems Command Services
Defense Logistics Agency Consulting Contracts
Professional Services Schedule (PSS) Contracts

Risk Flags

Potential for undefined scope leading to cost overruns or reduced value.
Risk of contractor prioritizing profit over optimal service delivery in a fixed-price model.
Dependence on external expertise may not foster long-term internal capability development.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.3 million to RAYTHEON COMPANY. REMANUFACTURE-

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 Navy).

What is the total obligated amount?

The obligated amount is $19.3 million.

What is the period of performance?

Start: 2007-11-08. End: 2009-09-30.

What was the specific scope of work for Raytheon Company's logistics consulting services?

The provided data indicates the contract is for 'Process, Physical Distribution, and Logistics Consulting Services' under NAICS code 541614. However, the precise scope of work is not detailed. Typically, such services could encompass analysis of existing distribution networks, identification of inefficiencies, recommendations for process improvements, implementation support for new logistics strategies, inventory management optimization, and supply chain risk assessment. The Department of the Navy would have defined specific deliverables and objectives within the contract's statement of work, which would detail the exact nature of the consulting provided.

How does the $19.3 million award compare to typical spending on logistics consulting by the Department of the Navy?

Direct comparison of this $19.3 million award to typical Department of the Navy spending on logistics consulting requires access to historical spending data and contract databases. However, for a contract spanning approximately two years (November 2007 to September 2009), this figure represents a substantial investment. The Department of Defense, in general, spends billions annually on various support services, including logistics. The value of this contract relative to others would depend on the complexity of the issues addressed, the duration, and the specific expertise required. Without comparative data on similar-sized engagements or the overall budget allocated for such consulting, it's difficult to definitively state if it's high or low, but it signifies a significant engagement.

What are the potential risks associated with a firm-fixed-price contract for consulting services?

While firm-fixed-price (FFP) contracts are designed to provide cost certainty, they can introduce risks for both the government and the contractor, especially in consulting. For the government, the primary risk is that the contractor may cut corners on quality or scope to maximize profit if the fixed price is too low or the scope is poorly defined, leading to suboptimal outcomes. Conversely, if the scope is underestimated by the contractor, they may incur losses. For consulting, there's also the risk that the 'best' solutions might be difficult to quantify upfront, making the fixed price potentially misaligned with the actual value delivered. Effective oversight and clear performance metrics are crucial to mitigate these risks.

What is the significance of NAICS code 541614 in understanding this contract?

NAICS code 541614, 'Process, Physical Distribution, and Logistics Consulting Services,' specifically categorizes the type of professional services rendered. This code indicates that the contract is focused on improving the efficiency and effectiveness of how goods and materials are moved, stored, and managed throughout a supply chain. Companies bidding on and performing under this code typically possess expertise in areas such as warehousing, transportation management, inventory control, supply chain network design, and operational process optimization. Understanding this code helps to contextualize the contract's purpose and the specialized knowledge expected from the contractor.

What does the 'DO' award action code signify for this contract?

The 'DO' award action code typically signifies a 'Definitive Contract' or 'Delivery Order' issued against a contract. In this context, it indicates that this was the final award document for the specified services and price. For a contract like this, it means the terms and conditions, including the firm-fixed price and period of performance, were finalized and obligated. It's a standard code used in federal procurement to denote the issuance of a contract or a specific order under a contract vehicle.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Process, Physical Distribution, and Logistics Consulting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 141 SPRING ST, LEXINGTON, MA, 05

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $19,304,991

Exercised Options: $19,304,991

Current Obligation: $19,304,991

Parent Contract

Parent Award PIID: GS10F0229L

IDV Type: FSS

Timeline