Raytheon Company awarded $21.6M contract for Task 1 - Requirements & Architecture by the Department of the Navy

Contract Overview

Contract Amount: $21,646,085 ($21.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2023-01-03

End Date: 2025-10-31

Contract Duration: 1,032 days

Daily Burn Rate: $21.0K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: TASK 1 - REQUIREMENTS & ARCHITECTURE

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $21.6 million to RAYTHEON COMPANY for work described as: TASK 1 - REQUIREMENTS & ARCHITECTURE Key points: 1. Contract awarded as a sole-source delivery order, raising questions about potential price efficiencies. 2. The contract's duration of over 1000 days suggests a significant, long-term requirement. 3. The 'Cost Plus Fixed Fee' pricing structure may incentivize cost overruns. 4. The specific product service code (PSC) is missing, hindering detailed benchmarking. 5. The contract is not set aside for small businesses, indicating a focus on larger prime contractors. 6. The geographic location in Arizona (AZ) may have implications for local economic impact.

Value Assessment

Rating: questionable

The contract value of $21.6 million for 'TASK 1 - REQUIREMENTS & ARCHITECTURE' is difficult to benchmark without a specific product service code (PSC) or comparison to similar sole-source awards. The 'Cost Plus Fixed Fee' (CPFF) contract type, while common for R&D or uncertain scope, can lead to higher costs compared to fixed-price contracts if not managed tightly. The absence of competition further limits the ability to assess if the pricing represents fair market value. Without more granular data on the specific services rendered and comparable market rates for similar architectural and requirements definition tasks, a definitive value-for-money assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source delivery order, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities, intellectual property, or when urgency dictates a direct award. The lack of competition means there was no opportunity for price discovery through a bidding process, potentially leading to higher costs for the government compared to a fully competed contract. The rationale for the sole-source award is not detailed in the provided data.

Taxpayer Impact: Sole-source awards limit taxpayer value by removing the downward pressure on pricing that competition provides. This can result in higher overall spending for the same goods or services.

Public Impact

The Department of the Navy benefits from specialized services related to requirements and architecture. The contract supports the development and definition of critical systems or programs. The primary beneficiary is the defense sector, specifically naval operations. Work is likely to be performed in Arizona, potentially impacting the local workforce and economy in that state.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential savings.
Cost Plus Fixed Fee structure may not incentivize cost control.
Lack of specific PSC hinders detailed performance and cost analysis.
Long contract duration could indicate potential for scope creep or evolving requirements.

Positive Signals

Award to a known entity, Raytheon Company, suggests established capabilities.
Delivery order structure implies a defined need within a larger framework.
Fixed fee component provides some level of cost certainty for the contractor's profit.

Sector Analysis

The contract falls within the Defense Industrial Base sector, specifically related to ordnance and accessories manufacturing, though the task description points towards systems architecture and requirements definition. This is a critical area for defense modernization and capability development. The market for such services is dominated by large defense contractors with specialized expertise. Benchmarking this specific 'Requirements & Architecture' task is difficult without more context, but overall defense spending on R&D and systems integration is substantial, often involving multi-billion dollar programs.

Small Business Impact

The contract data indicates that this award was not set aside for small businesses (sb: false) and the prime contractor is Raytheon Company, a large defense corporation. This suggests that the scope of work is likely beyond the capacity or specialization of most small businesses, or that the government specifically sought the capabilities of a large prime. There is no information provided regarding subcontracting plans, so the extent to which small businesses might participate indirectly through subcontracts is unknown.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Given the sole-source nature and CPFF structure, robust oversight would be crucial to monitor costs, ensure adherence to the defined scope, and verify the necessity of expenditures. Inspector General (IG) jurisdiction would apply in cases of fraud, waste, or abuse. Transparency is limited by the sole-source award and the lack of detailed public reporting on specific deliverables.

Related Government Programs

Department of Defense Research and Development
Naval Systems Engineering
Defense Acquisition Programs
Ordnance and Weapons Systems Development

Risk Flags

Sole-source award
Cost-plus contract type
Missing Product Service Code (PSC)
Lack of detailed scope description

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.6 million to RAYTHEON COMPANY. TASK 1 - REQUIREMENTS & ARCHITECTURE

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 $21.6 million.

What is the period of performance?

Start: 2023-01-03. End: 2025-10-31.

What is the specific nature of 'TASK 1 - REQUIREMENTS & ARCHITECTURE' being procured by the Department of the Navy?

The provided data identifies the task as 'TASK 1 - REQUIREMENTS & ARCHITECTURE' under contract number 332994 awarded to Raytheon Company. While the task name suggests activities related to defining system needs, functionalities, and the overall design blueprint for a particular defense system or program, the specifics are not detailed. This could encompass activities like feasibility studies, user needs analysis, system specifications development, and high-level architectural design. Without further documentation or context from the Department of the Navy, the precise deliverables and objectives of this task remain ambiguous. This ambiguity is common in early-stage defense acquisition phases where foundational work is being laid.

How does the 'Cost Plus Fixed Fee' (CPFF) pricing structure compare to other contract types for similar services?

The 'Cost Plus Fixed Fee' (CPFF) contract type is often used when the scope of work is not well-defined or involves significant research and development, making it difficult to estimate costs accurately upfront. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing their profit. Compared to fixed-price contracts, CPFF generally offers less incentive for the contractor to control costs, as the fee is fixed regardless of the final cost. However, it provides greater flexibility for the government to adapt requirements during performance. For services like requirements definition and architecture, where innovation and adaptation are key, CPFF can be appropriate, but it necessitates stringent government oversight to manage costs effectively and prevent overruns. Fixed-price incentive fee contracts or even firm-fixed-price contracts might be considered if requirements were more stable and measurable.

What are the potential risks associated with a sole-source award for this contract?

The primary risk of a sole-source award is the lack of price competition, which can lead to the government paying a higher price than if multiple vendors had bid. Without competitive pressure, the contractor may have less incentive to offer the most cost-effective solution. There's also a risk that the government may not be aware of alternative, potentially superior, solutions available from other vendors. Furthermore, sole-source awards can sometimes indicate a lack of adequate market research or planning by the procuring agency. In this case, for 'TASK 1 - REQUIREMENTS & ARCHITECTURE', the government is relying entirely on Raytheon Company's capabilities and pricing without an external benchmark, increasing the risk of suboptimal value.

What is Raytheon Company's track record with the Department of the Navy for similar services?

Raytheon Company, now part of RTX, has a long and extensive history of contracting with the Department of the Navy and the broader Department of Defense. They are a major defense contractor involved in a wide array of programs, including missile systems, radar, command and control, and various other defense technologies. While the specific data provided does not detail Raytheon's performance on this particular contract (as it just began), their overall track record with the Navy is generally characterized by large-scale, complex system development and integration projects. Performance can vary across contracts, but their established presence suggests they possess the necessary infrastructure and expertise for defense-related architecture and requirements tasks. Detailed performance reviews for specific past contracts would be needed for a comprehensive assessment.

How does the $21.6 million contract value compare to historical spending on requirements and architecture definition within the Navy?

Comparing the $21.6 million contract value for 'TASK 1 - REQUIREMENTS & ARCHITECTURE' to historical Navy spending on similar activities is challenging without a specific Product Service Code (PSC) or a more detailed description of the services. Requirements definition and architectural design are often integral parts of larger acquisition programs, and their costs can vary significantly based on the complexity, scale, and technological maturity of the system being developed. For major defense platforms (e.g., aircraft carriers, submarines, advanced aircraft), the initial requirements and architecture phases can indeed run into tens of millions of dollars. However, without knowing if this contract represents a standalone effort or a component of a much larger program, a direct historical comparison is speculative. The duration (over 3 years) suggests a substantial undertaking.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms, Ordnance, and Ordnance Accessories Manufacturing

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: M6785421R0005

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 1151 E HERMANS RD, TUCSON, AZ, 85756

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: $21,646,085

Exercised Options: $21,646,085

Current Obligation: $21,646,085

Actual Outlays: $4,342,214

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $159,345

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: M6785421D0073

IDV Type: IDC

Timeline