Raytheon Company awarded $57.8M contract for optical instruments, with a significant portion allocated to Texas

Contract Overview

Contract Amount: $57,757,959 ($57.8M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2006-07-25

End Date: 2009-05-29

Contract Duration: 1,039 days

Daily Burn Rate: $55.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75071

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $57.8 million to RAYTHEON COMPANY for work described as: Key points: 1. Contract value of $57.8M indicates substantial investment in specialized optical equipment. 2. Awarded to Raytheon Company, a major defense contractor, suggesting a need for advanced technological capabilities. 3. The contract duration of 1039 days points to a long-term requirement for these optical instruments. 4. Fixed-price contract type suggests a clear scope and budget, potentially mitigating cost overruns. 5. The absence of small business set-asides may indicate a focus on large-scale, specialized production capabilities. 6. The contract's origin in 2006 suggests it may be part of a larger, ongoing defense modernization effort.

Value Assessment

Rating: good

The contract value of $57.8 million for optical instruments appears reasonable given the duration and the prime contractor's specialization. Benchmarking against similar defense contracts for advanced optical systems would provide a more precise value-for-money assessment. The firm fixed-price nature suggests that the initial pricing was deemed acceptable for the defined scope.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of 4 bidders suggests a competitive environment for this type of specialized equipment. This level of competition is generally favorable for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best possible price for high-value optical instruments.

Public Impact

The Department of the Navy is the primary beneficiary, acquiring critical optical instruments for its operations. The contract supports the manufacturing and delivery of advanced optical instruments, likely for defense applications. The award to a Texas-based facility indicates a potential economic impact and job creation within that state. The workforce involved would likely include skilled technicians, engineers, and manufacturing personnel specializing in optics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for long-term reliance on a single contractor for specialized optical systems.
The contract's age (awarded in 2006) may mean current market prices or technologies have evolved significantly.
Lack of small business participation could limit opportunities for smaller, innovative firms in this niche.

Positive Signals

Full and open competition suggests a robust bidding process.
Firm fixed-price contract provides cost certainty.
Award to a reputable contractor like Raytheon implies a focus on quality and reliability.

Sector Analysis

The contract falls within the Optical Instrument and Lens Manufacturing sector, a critical component of the defense industrial base. This sector is characterized by high technological barriers to entry and significant R&D investment. Spending in this area is often driven by national security requirements for advanced surveillance, targeting, and imaging systems. Comparable spending benchmarks would typically be found within broader defense procurement data for electro-optical systems.

Small Business Impact

This contract did not include small business set-asides, as indicated by 'sb: false'. This suggests that the requirement was likely beyond the scope or capability of typical small business set-aside programs, or that the competition favored larger, established firms. There is no explicit information on subcontracting plans for small businesses, which could be a missed opportunity for broader economic participation.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting oversight mechanisms, including the Defense Contract Management Agency (DCMA). The firm fixed-price nature provides a degree of accountability by locking in costs. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive.

Related Government Programs

Defense Procurement
Optical and Electro-Optical Systems
Naval Technology
Advanced Manufacturing Contracts

Risk Flags

Contract awarded in 2006 may not reflect current market conditions or technological relevance.
Lack of small business participation could indicate limited market reach or specialized requirements.
Long contract duration increases risk of obsolescence and requirement changes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $57.8 million to RAYTHEON COMPANY. See the official description on USAspending.

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 $57.8 million.

What is the period of performance?

Start: 2006-07-25. End: 2009-05-29.

What specific types of optical instruments were procured under this contract?

The provided data indicates the contract is for 'Optical Instrument and Lens Manufacturing' (NAICS code 333314). However, the specific types of instruments are not detailed. Given the contractor (Raytheon) and the awarding agency (Department of the Navy), these instruments are likely advanced systems for military applications. This could include components for targeting pods, surveillance equipment, night vision devices, or specialized imaging systems crucial for naval operations. Further investigation into the contract details or related defense budgets would be necessary to identify the precise nature of the optical instruments.

How does the $57.8 million contract value compare to similar procurements for optical instruments by the Department of Defense?

The $57.8 million contract value for optical instruments, awarded in 2006 and spanning over 1000 days, represents a significant but not extraordinary investment for a major defense contractor like Raytheon. To benchmark effectively, one would need to compare it against other Department of Defense (DoD) contracts for similar electro-optical/infrared (EO/IR) systems, targeting pods, or advanced optics procured around the same period. Contracts for complex military optics can range from tens to hundreds of millions of dollars, depending on the system's sophistication, quantity, and integration requirements. The firm fixed-price nature suggests a well-defined scope, which can influence the overall value. Without specific details on the instrument type, a precise comparison is challenging, but the value aligns with substantial defense procurement needs.

What are the potential risks associated with a long-duration contract (1039 days) for specialized equipment?

Long-duration contracts, such as this 1039-day award, carry several potential risks. Technological obsolescence is a primary concern; by the time the equipment is delivered, newer or more effective technologies might be available. Cost escalation, despite the firm fixed-price structure, can occur if unforeseen issues arise during manufacturing or if material costs increase significantly beyond initial projections, potentially leading to contract modifications or disputes. Contractor performance risk is also present; a long timeline increases the chance of production delays, quality control issues, or changes in the contractor's financial stability or strategic focus. Furthermore, the government's requirements might evolve over the contract period, necessitating costly changes or rendering the procured items less relevant to current operational needs.

What is the significance of the contract being awarded to Raytheon Company?

The award to Raytheon Company is significant because Raytheon is a major, well-established defense contractor with extensive expertise in aerospace and defense systems, including advanced optics and electronics. This suggests the Department of the Navy required highly specialized, technologically advanced optical instruments that only a prime contractor of Raytheon's caliber could likely provide. It implies a high degree of confidence in Raytheon's technical capabilities, manufacturing capacity, and ability to meet stringent military specifications. Such awards often reflect strategic sourcing decisions by the DoD, prioritizing established relationships and proven performance for critical defense capabilities.

How has spending in the 'Optical Instrument and Lens Manufacturing' sector evolved since this contract was awarded in 2006?

Spending in the 'Optical Instrument and Lens Manufacturing' sector (NAICS 333314) has likely seen significant evolution since 2006, driven by advancements in technology and changing defense priorities. Post-2006, there has been a continued emphasis on electro-optical/infrared (EO/IR) systems, sensor fusion, and miniaturization for various platforms (air, ground, sea). Increased demand for intelligence, surveillance, and reconnaissance (ISR) capabilities, as well as precision-guided munitions, would have sustained or increased spending in this sector. Furthermore, the rise of commercial technologies, such as advanced imaging sensors and photonics, may have influenced both the capabilities and the competitive landscape, potentially leading to shifts in government procurement strategies and spending patterns towards more integrated or software-defined optical solutions.

Industry Classification

NAICS: Manufacturing › Commercial and Service Industry Machinery Manufacturing › Optical Instrument and Lens Manufacturing

Product/Service Code: FIRE CONTROL EQPT.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2501 W UNIVERSITY DRIVE M, MC KINNEY, TX, 03

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

Contract Characteristics

Cost or Pricing Data: NO

Timeline