Raytheon Company awarded $34.3M contract for AIDATS EMD PHASE by the Department of the Navy

Contract Overview

Contract Amount: $34,344,368 ($34.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2015-02-27

End Date: 2020-10-29

Contract Duration: 2,071 days

Daily Burn Rate: $16.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AIDATS EMD PHASE

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75071

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $34.3 million to RAYTHEON COMPANY for work described as: AIDATS EMD PHASE Key points: 1. Contract value of $34.3M for a 5-year period suggests significant investment in advanced defense technology. 2. The award was made under full and open competition, indicating a competitive bidding process. 3. The definitive contract type with a firm fixed price suggests clear scope and cost controls. 4. The contract is for the EMD (Engineering and Manufacturing Development) phase, crucial for developing new capabilities. 5. The geographic location of performance in Texas may indicate a concentration of specialized defense manufacturing in the region.

Value Assessment

Rating: good

The contract value of $34.3M for a 5-year duration (2071 days) for an EMD phase appears reasonable given the complexity of developing advanced optical instruments for defense applications. Benchmarking against similar EMD contracts for complex systems would provide further context, but the firm fixed-price structure suggests an effort to manage costs effectively. The number of bids (5) indicates some level of competition, which generally supports fair pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with five bids received. This indicates a robust bidding environment where multiple qualified contractors had the opportunity to compete. The presence of five bidders suggests that the market for this type of specialized defense technology is sufficiently developed and that the government was able to solicit a range of proposals, likely leading to a more competitive price discovery process.

Taxpayer Impact: A competitive bidding process like this generally benefits taxpayers by driving down costs and ensuring the government receives the best value for its investment in advanced defense systems.

Public Impact

The primary beneficiaries are the Department of Defense and the U.S. Navy, who will receive advanced optical instruments for defense purposes. The contract supports the development of critical defense capabilities, potentially enhancing national security. The performance location in Texas may provide a boost to the local economy and the specialized defense manufacturing workforce in that state. This contract contributes to the advancement of optical instrument and lens manufacturing technology within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if EMD phase complexities are underestimated.
Dependence on a single contractor (Raytheon) for a critical development phase.
Risk of technological obsolescence if development timelines are not met.

Positive Signals

Firm fixed-price contract provides cost certainty.
Full and open competition suggests a competitive market and potential for value.
Multiple bidders (5) indicate industry interest and capability.

Sector Analysis

This contract falls within the Optical Instrument and Lens Manufacturing sector, a specialized area within the broader manufacturing and defense industries. The market for advanced defense optics is characterized by high R&D costs, stringent performance requirements, and significant government investment. Comparable spending benchmarks would likely be found in other major defense acquisition programs involving complex sensor or imaging systems, where EMD phases can represent substantial portions of the total program cost.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large definitive contract awarded to Raytheon Company, a major defense contractor, it is unlikely that small businesses would be direct awardees. However, Raytheon may engage small businesses as subcontractors for specialized components or services, contributing to the broader small business defense ecosystem. Further analysis of subcontracting plans would be needed to assess the direct impact on small businesses.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. The firm fixed-price nature of the contract provides a degree of cost control. Transparency is facilitated by the public nature of contract awards. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse. Regular program reviews and milestone assessments are standard oversight mechanisms for EMD phases.

Related Government Programs

Defense Advanced Research Projects Agency (DARPA) programs
Naval Sea Systems Command (NAVSEA) contracts
Advanced Technology Development programs
Optical Sensor Development Contracts
Aerospace and Defense Manufacturing

Risk Flags

Potential for cost overruns in EMD phase
Technical feasibility risks
Schedule slippage risks

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.3 million to RAYTHEON COMPANY. AIDATS EMD PHASE

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 $34.3 million.

What is the period of performance?

Start: 2015-02-27. End: 2020-10-29.

What is the historical spending pattern for Raytheon Company with the Department of the Navy for similar optical instrument development?

Analyzing Raytheon's historical spending with the Department of the Navy for optical instrument development requires accessing detailed contract databases. However, given Raytheon's established position as a major defense contractor, it is highly probable they have been involved in numerous similar contracts over the years. The $34.3M value for this EMD phase suggests a significant, but not unprecedented, investment. Historical data would reveal trends in contract values, durations, and the specific types of optical systems developed, providing context for the current award's scale and scope. Without specific historical data, we infer that Raytheon possesses a strong track record in this domain, justifying their selection for this critical development phase.

How does the $34.3M contract value compare to industry benchmarks for Engineering and Manufacturing Development (EMD) phases of advanced optical systems?

The $34.3M contract value for the EMD phase of advanced optical instruments appears to be within a reasonable range for complex defense systems. EMD phases are inherently costly due to the research, design, prototyping, and testing involved. Benchmarking requires comparing this contract to similar EMD efforts for systems with comparable technological sophistication and mission requirements. For instance, EMD phases for advanced radar systems, missile guidance systems, or sophisticated surveillance platforms can range from tens to hundreds of millions of dollars. The firm fixed-price nature of this contract suggests a well-defined scope, which can help control costs compared to cost-plus contracts often seen in early R&D. The five bids received also suggest market validation of the estimated cost.

What are the key performance indicators (KPIs) expected for the AIDATS EMD PHASE contract and how will they be measured?

While specific KPIs are not detailed in the provided data, typical performance indicators for an Engineering and Manufacturing Development (EMD) phase of an advanced optical system would focus on technical performance, schedule adherence, and cost control. Technical KPIs might include achieving specific resolution, sensitivity, or operational range targets for the optical instruments. Schedule adherence would be measured against key milestones for design reviews, prototype delivery, and testing phases. Cost control would be monitored against the firm fixed-price budget. The Department of the Navy would likely have detailed performance work statements (PWS) outlining these KPIs and the methods for measuring contractor performance, potentially including government acceptance testing and regular progress reports.

What is the potential risk associated with the firm fixed-price (FFP) contract type for an EMD phase, and how is it mitigated?

The primary risk with a Firm Fixed-Price (FFP) contract for an Engineering and Manufacturing Development (EMD) phase is that the contractor may face significant financial strain if unforeseen technical challenges or scope creep occur, potentially leading to quality compromises or contractor default. However, FFP contracts also offer the government cost certainty. Mitigation strategies employed by the Department of the Navy likely include a thorough pre-award review of the contractor's technical approach and cost estimates, clear definition of contract scope in the Performance Work Statement (PWS), and robust oversight during the EMD phase. The inclusion of five bidders suggests that Raytheon likely presented a well-reasoned proposal, and the government's selection process would have assessed their capability to manage the risks associated with the FFP structure for this development effort.

How does the geographic performance location in Texas (st: TX) impact the contract's execution and potential for small business subcontracting?

The performance location in Texas (st: TX) suggests that Raytheon Company will utilize facilities and potentially a workforce within that state for the AIDATS EMD PHASE contract. Texas has a significant aerospace and defense industry presence, which could mean access to specialized infrastructure, skilled labor, and a network of supporting businesses. For small business subcontracting, this location might offer opportunities within the Texas defense industrial base. However, without specific subcontracting plans, it's difficult to quantify the direct impact. The presence of established defense contractors in Texas could lead to subcontracting opportunities, but the primary awardee's internal capabilities and subcontracting strategy will ultimately determine the extent of small business involvement.

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

Solicitation ID: M6785414R6002

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2501 W UNIVERSITY DR, MCKINNEY, TX, 75071

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

Financial Breakdown

Contract Ceiling: $96,182,908

Exercised Options: $34,344,368

Current Obligation: $34,344,368

Subaward Activity

Number of Subawards: 17

Total Subaward Amount: $1,500,820

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline