Raytheon awarded $109M contract for aircraft accessories, with a total value exceeding $45M

Contract Overview

Contract Amount: $45,183,661 ($45.2M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 1996-11-12

End Date: 2010-09-23

Contract Duration: 5,063 days

Daily Burn Rate: $8.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 199712!9700!0031!ZA22 !USSOCOM HQ, DIR. OF PROCUREMENT !MDA91193C0008 !A!*!P00062 !19961112!19971130!108994732!108994732!139691877!N!06845!RAYTHEON COMPANY (INC) !1300 E JOPPA RD !BALTIMORE !MD!21286!04000!510!24!BALTIMORE !BALTIMORE (CITY) !MARYLAND !0001!-000000373483!N!N!000000000000!1680!MSL AIRCRAFT ACCESSORIES AND COMPONENTS !C9E!ALL OTHER SUPPLIES AND EQUIPME!1000!NOT DISCERNABLE OR CLASSIFIED !3663!3!*!*!H!B!A!*!A !N!J!2!002!B!* !A!N!B!* !* !N!C!*!A!Z!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: SEMINOLE, PINELLAS County, FLORIDA, 33777

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $45.2 million to RAYTHEON COMPANY for work described as: 199712!9700!0031!ZA22 !USSOCOM HQ, DIR. OF PROCUREMENT !MDA91193C0008 !A!*!P00062 !19961112!19971130!108994732!108994732!139691877!N!06845!RAYTHEON COMPANY (INC) !1300 E JOPPA RD !BALTIMORE !MD!21286!04000!510!24!BALTIMORE !BALTIM… Key points: 1. Contract value significantly exceeds initial award, indicating potential for scope expansion or cost overruns. 2. Long contract duration of over 14 years suggests a sustained need for these aircraft components. 3. The contract was awarded under full and open competition, implying a competitive bidding process. 4. Raytheon's extensive experience in defense contracting positions them well for this type of work. 5. The specific nature of 'MSL AIRCRAFT ACCESSORIES AND COMPONENTS' warrants further investigation into their criticality and potential single points of failure. 6. The contract's performance period spans multiple fiscal years, requiring ongoing budget allocation and oversight.

Value Assessment

Rating: fair

The initial award was $108,994,732, but the total obligated amount reached $45,183,661.19. This discrepancy needs clarification, as the obligated amount is less than the initial award. Further analysis is required to understand the final contract value and any modifications. Benchmarking against similar contracts for aircraft accessories is difficult without more specific details on the components procured.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' suggesting that multiple bidders had the opportunity to submit proposals. The presence of two bids indicates a degree of competition, which is generally favorable for price discovery. However, the specific number of bidders and the details of the competitive process are not fully elaborated.

Taxpayer Impact: A full and open competition is generally beneficial for taxpayers as it encourages competitive pricing and potentially leads to better value for money.

Public Impact

The primary beneficiaries are likely military aviation units requiring specialized aircraft accessories and components. The services delivered involve the provision of essential parts for maintaining aircraft operational readiness. The geographic impact is likely widespread across various military installations that utilize the supported aircraft. Workforce implications may include employment opportunities at Raytheon and its subcontractors involved in manufacturing or supplying these components.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of clarity on the final obligated amount versus the initial award.
Long contract duration could lead to price escalation or obsolescence of components.
Limited information on the specific types of aircraft accessories and components procured.
Potential for sole-sourcing of specific components if not adequately competed initially.

Positive Signals

Awarded through full and open competition, suggesting a competitive process.
Raytheon is a well-established defense contractor with significant experience.
The contract addresses a clear need for aircraft maintenance and operational readiness.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on aircraft components and accessories. The market for such specialized parts is often characterized by a few large prime contractors and numerous specialized suppliers. Spending in this area is critical for maintaining military readiness and involves complex supply chains. Comparable spending benchmarks would typically be found within the Department of Defense's procurement data for aviation support.

Small Business Impact

While the contract was awarded to Raytheon, a large prime contractor, there is no explicit information regarding small business set-asides or subcontracting plans within the provided data. Further investigation would be needed to determine if small businesses were involved as subcontractors and to what extent they benefited from this award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contract management and oversight mechanisms, potentially involving the Defense Contract Management Agency (DCMA). Transparency is dependent on the level of detail made public regarding contract modifications and performance. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Aircraft Maintenance and Repair
Aviation Support Services
Defense Procurement
Aerospace Components

Risk Flags

Potential for cost growth due to long contract duration.
Lack of specific detail on procured components.
Discrepancy between initial award and obligated amount requires clarification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $45.2 million to RAYTHEON COMPANY. 199712!9700!0031!ZA22 !USSOCOM HQ, DIR. OF PROCUREMENT !MDA91193C0008 !A!*!P00062 !19961112!19971130!108994732!108994732!139691877!N!06845!RAYTHEON COMPANY (INC) !1300 E JOPPA RD !BALTIMORE !MD!21286!04000!510!24!BALTIMORE !BALTIMORE (CITY) !MARYLAND !0001!-000000373483!N!N!000000000000!1680!MSL AIRCRAFT ACCESSORIES AND COMPONENTS !C9E!ALL OTHER SUPPLIES AND EQUIPME!1000!NOT DISCERNABLE OR CLASSIFIED !3663!3!*!*!H!B!A!*!A !N!J!2!0

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $45.2 million.

What is the period of performance?

Start: 1996-11-12. End: 2010-09-23.

What is the final total value of this contract, and how does it compare to the initial award amount?

The initial award amount for contract MDA91193C0008 to Raytheon Company was $108,994,732. However, the total amount ultimately obligated under this contract was $45,183,661.19. This indicates that the final expenditure was significantly less than the initially awarded value. The reasons for this could include contract modifications, scope reductions, or early termination of certain aspects. Without further details on contract actions, it's difficult to pinpoint the exact cause, but it suggests a potential overestimation of needs or a change in program requirements over the contract's extended performance period.

What specific types of 'MSL AIRCRAFT ACCESSORIES AND COMPONENTS' were procured under this contract?

The provided data classifies the procured items under PSC (Product Service Code) 1680 as 'MSL AIRCRAFT ACCESSORIES AND COMPONENTS.' This is a broad category and does not specify the exact nature of these parts. 'MSL' could potentially refer to 'Missile' or another acronym specific to military aviation. These components are critical for the operation and maintenance of aircraft. Further investigation into the contract's statement of work or specific delivery orders would be necessary to identify the precise items, such as specialized electronic components, structural parts, or operational subsystems, and their role in supporting various military aircraft platforms.

How did the competition level for this contract impact the final pricing and value for the government?

The contract was awarded under 'full and open competition,' with two bids received. This level of competition is generally considered adequate to promote price discovery and encourage competitive pricing. While having more bidders could potentially drive prices lower, two bids suggest that the market was accessible and that Raytheon's proposal was deemed the most advantageous. The final pricing and value would depend on the specifics of the proposals submitted and the negotiation process. Without access to the bid details or cost breakdowns, it's challenging to quantify the exact impact of this competition level on the final price, but the process itself is a positive indicator for achieving reasonable value.

What is the significance of the contract's long performance period (1996-2010)?

The contract's performance period spanned from November 12, 1996, to September 23, 2010, a duration of over 14 years. Such a long period suggests a sustained and ongoing requirement for the specified aircraft accessories and components. This extended duration can offer stability for the contractor and potentially lead to economies of scale. However, it also presents risks, including potential price escalation over time, the obsolescence of technology or components, and the need for continuous government oversight to ensure the continued relevance and cost-effectiveness of the procured items throughout the contract's life.

What is Raytheon's track record with similar aircraft component contracts?

Raytheon Company (now RTX Corporation) is a major defense contractor with a long history of supplying complex systems and components for military aircraft and platforms. While this specific contract number (MDA91193C0008) pertains to aircraft accessories, Raytheon's broader portfolio includes work on avionics, sensors, weapons systems, and other critical aircraft subsystems. Their extensive experience in the defense sector suggests a strong capability to manage and execute contracts of this nature. However, a detailed review of their performance on past contracts, including any past performance issues or awards, would provide a more comprehensive understanding of their track record for this specific type of procurement.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 1300 E JOPPA RD, BALTIMORE, MD, 90

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

Contract Characteristics

Cost or Pricing Data: NO

Timeline