Raytheon Company awarded $6.7M Navy order for ordnance accessories, a sole-source action

Contract Overview

Contract Amount: $6,699,008 ($6.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2023-11-30

End Date: 2026-01-31

Contract Duration: 793 days

Daily Burn Rate: $8.4K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THE PURPOSE OF THIS ACTION IS TO PLACE AN ORDER FOR ATAL - FRP LOT 2.

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $6.7 million to RAYTHEON COMPANY for work described as: THE PURPOSE OF THIS ACTION IS TO PLACE AN ORDER FOR ATAL - FRP LOT 2. Key points: 1. This order represents a specific procurement within a larger contract vehicle. 2. The firm-fixed-price contract type suggests predictable costs for the government. 3. The duration of the order extends over two fiscal years, indicating a sustained need. 4. The procurement is for ordnance accessories, a critical component for defense operations. 5. The contract was not competed, raising questions about potential price efficiencies. 6. The award is being made to a large, established defense contractor.

Value Assessment

Rating: fair

The awarded amount of $6.7 million for ordnance accessories is difficult to benchmark without specific item details and quantities. As a sole-source action, there is no direct comparison to other bids to assess value for money. The firm-fixed-price structure provides cost certainty, but the absence of competition means the government may not have secured the lowest possible price. Further analysis would require understanding the specific items procured and their market rates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in cases of urgent need. The lack of competition limits the government's ability to leverage market forces to drive down prices and may result in a higher cost than if multiple bids were solicited.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. Without a competitive process, there is less assurance that the price reflects the best value achievable in the market.

Public Impact

The Department of the Navy benefits from the acquisition of essential ordnance accessories. This order supports the readiness and operational capabilities of naval forces. The services delivered are critical for the maintenance and deployment of military equipment. The geographic impact is primarily within the Department of the Navy's operational theaters. Workforce implications are likely within Raytheon Company's manufacturing and supply chain operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source awards can reduce transparency in pricing.
Dependence on a single supplier could create future supply chain risks.

Positive Signals

Firm-fixed-price contract provides cost certainty.
Award to an established contractor may indicate reliability of supply.
Order duration suggests a predictable and sustained requirement.

Sector Analysis

The defense sector, particularly ordnance manufacturing, is characterized by high barriers to entry, specialized technology, and significant government investment. This contract for ordnance accessories fits within the broader defense industrial base, supplying critical components for military hardware. Spending in this area is often driven by national security priorities and long-term modernization programs. Comparable spending benchmarks are difficult to establish without specific item details, but the defense sector generally involves substantial, long-term contracts.

Small Business Impact

This contract was not awarded to a small business, nor does it appear to have a small business set-aside. There is no explicit information provided regarding subcontracting plans for small businesses. Without a competitive process that includes small business participation goals, the direct impact on the small business ecosystem for this specific award is likely minimal, though the prime contractor may engage small businesses in their supply chain.

Oversight & Accountability

Oversight for this contract would fall under the Department of the Navy's contracting and program management offices. As a delivery order under an existing contract, the initial award process would have undergone review. Transparency is limited due to the sole-source nature. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Procurement
Ordnance and Ammunition Procurement
Naval Weapons Systems
Defense Industrial Base Contracts

Risk Flags

Sole-source award
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $6.7 million to RAYTHEON COMPANY. THE PURPOSE OF THIS ACTION IS TO PLACE AN ORDER FOR ATAL - FRP LOT 2.

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 $6.7 million.

What is the period of performance?

Start: 2023-11-30. End: 2026-01-31.

What specific ordnance accessories are being procured under this order, and what are their unit costs?

The provided data does not specify the exact ordnance accessories being procured under this $6.7 million order. The North American Industry Classification System (NAICS) code 332994, 'Small Arms, Ordnance, and Ordnance Accessories Manufacturing,' indicates a broad category. Without a detailed list of items, quantities, and their respective unit prices, it is impossible to perform a granular cost analysis or benchmark against market rates. The firm-fixed-price nature of the contract means the total price is set, but the underlying cost breakdown per item is not publicly available in this summary.

Why was this contract awarded on a sole-source basis instead of being competed?

The data indicates the contract was 'NOT COMPETED,' implying a sole-source award. Common justifications for sole-source procurements include situations where only one responsible source can provide the required supplies or services, or when there is an urgent and compelling need that precludes full and open competition. Without further details from the awarding agency, the specific rationale for this sole-source decision remains unknown. This lack of competition limits the government's ability to ensure it is receiving the best possible price and value.

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

Raytheon Company is a major defense contractor with extensive experience in producing a wide range of defense systems, including ordnance. While specific details on their past performance for 'ordnance accessories' under similar contract vehicles are not provided here, their established presence in the defense sector suggests a significant history of fulfilling complex military requirements. A deeper dive into contract databases and performance reports would be necessary to assess their specific track record, including on-time delivery, quality, and adherence to budget on comparable previous contracts.

How does the $6.7 million award compare to historical spending on similar ordnance accessories by the Department of the Navy?

Comparing this $6.7 million order to historical spending requires identifying specific, comparable ordnance accessories and their procurement history. The provided data is too general to facilitate such a comparison. The Department of the Navy procures a vast array of ordnance, and spending can fluctuate significantly based on operational tempo, modernization efforts, and specific program requirements. Without knowing the precise items and quantities, it's impossible to state whether this award is higher or lower than previous spending patterns for similar items.

What are the potential risks associated with a sole-source award for critical ordnance accessories?

The primary risk of a sole-source award for critical ordnance accessories is the potential for inflated pricing due to the lack of competitive pressure. Taxpayers may bear a higher cost than if the contract were competed. Additionally, sole-source awards can reduce transparency in the procurement process. There's also a risk of vendor lock-in, where the government becomes dependent on a single supplier, potentially limiting future flexibility and negotiation leverage. Ensuring adequate oversight and fair pricing becomes even more critical in such scenarios.

Industry Classification

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

Product/Service Code: WEAPONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: M6785421R0005

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

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: $6,699,008

Exercised Options: $6,699,008

Current Obligation: $6,699,008

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