Raytheon Company awarded $297M R&D contract for physical, engineering, and life sciences research

Contract Overview

Contract Amount: $29,688,143 ($29.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2018-07-03

End Date: 2022-06-03

Contract Duration: 1,431 days

Daily Burn Rate: $20.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: IGF::CT::IGF

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $29.7 million to RAYTHEON COMPANY for work described as: IGF::CT::IGF Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can incentivize cost overruns. 3. Performance period spans over 3 years, indicating a significant research undertaking. 4. The contract is for Research and Development in Physical, Engineering, and Life Sciences. 5. The awardee, Raytheon Company, is a major defense contractor with extensive R&D experience. 6. The contract was awarded by the Department of Defense, likely for national security applications.

Value Assessment

Rating: fair

Benchmarking the value of this R&D contract is challenging without specific deliverables. However, the Cost Plus Fixed Fee (CPFF) structure carries inherent risks of cost escalation compared to fixed-price contracts. While CPFF can be appropriate for R&D where scope is uncertain, it requires robust oversight to ensure value for money. The contract's total award value of $297 million over approximately 3.5 years suggests a substantial investment, but its true value depends on the successful development of the research outcomes.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. The number of bidders is not specified, but this method generally promotes a competitive environment. A competitive process is expected to drive down costs and encourage innovation as contractors vie for the award. The specific details of the competition, such as the number of proposals received and the evaluation criteria, would provide further insight into the effectiveness of the competition.

Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it increases the likelihood of obtaining the best value through a robust bidding process, potentially leading to lower overall costs for the government.

Public Impact

The primary beneficiaries are likely the Department of Defense and its associated research initiatives, aiming to advance technological capabilities. The contract supports research and development in physical, engineering, and life sciences, potentially leading to advancements in various scientific fields. The geographic impact is primarily within Arizona, where the contractor is located, but the research outcomes could have national or global implications. The contract may indirectly impact the scientific and engineering workforce through employment opportunities at Raytheon and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not closely monitored.
Lack of specific details on deliverables makes it difficult to assess the true value for money.
The significant award amount warrants close scrutiny of project milestones and outcomes.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that should yield better value.
Raytheon Company is a large, established defense contractor with a proven track record in R&D.
The contract duration allows for substantial research and development efforts.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences. This is a critical area for defense innovation, aiming to maintain technological superiority. The market for defense R&D is substantial, with significant government investment annually. Comparable spending benchmarks would involve looking at other large-scale R&D contracts awarded by the Department of Defense or other federal agencies for similar scientific domains.

Small Business Impact

The data indicates that small business participation (sb) was false, and there was no small business set-aside (ss). This suggests that the contract was not specifically targeted towards small businesses. Consequently, the primary award went to a large corporation, Raytheon Company. There may be opportunities for small businesses to participate as subcontractors, but this is not explicitly detailed in the provided data. Further investigation into subcontracting plans would be necessary to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Defense, likely through the Defense Contract Management Agency (DCMA), which is listed as the servicing agency. Accountability measures would be tied to the Cost Plus Fixed Fee contract terms, requiring Raytheon to report on costs incurred and progress made towards research objectives. Transparency would depend on the DoD's policies regarding the public disclosure of R&D contract details, especially those related to national security. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Research and Development Programs
Advanced Technology Development Contracts
Physical Sciences Research Grants
Engineering Research Initiatives
Life Sciences Research Funding

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage potential cost escalations.
The broad nature of R&D in physical, engineering, and life sciences can lead to undefined scope and potential delays.
Lack of specific performance metrics in the provided data makes value assessment challenging.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.7 million to RAYTHEON COMPANY. IGF::CT::IGF

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 $29.7 million.

What is the period of performance?

Start: 2018-07-03. End: 2022-06-03.

What specific research objectives does this contract aim to achieve within the physical, engineering, and life sciences?

The provided data does not specify the exact research objectives. However, given the awardee (Raytheon Company) and the awarding agency (Department of Defense), the research likely pertains to areas critical for national security and defense applications. This could encompass advancements in materials science, propulsion systems, sensor technology, artificial intelligence, cybersecurity, or biomedical research relevant to military personnel. Without access to the contract's statement of work or technical details, a precise definition of the research outcomes remains speculative. Further inquiry would require accessing non-public contract documentation or official project summaries released by the DoD.

How does the Cost Plus Fixed Fee (CPFF) structure for this R&D contract compare to other R&D contracts of similar scope and value?

Cost Plus Fixed Fee (CPFF) contracts are common in R&D where the scope of work is not fully defined at the outset, allowing for flexibility as research progresses. Compared to fixed-price contracts, CPFF shifts more cost risk to the government but can be essential for exploratory research. For R&D contracts of similar value (around $300 million), CPFF is a prevalent choice, especially when dealing with novel technologies or uncertain development paths. However, it necessitates stringent oversight to manage costs effectively. Benchmarking would involve analyzing the profit margins (fixed fee) and cost growth experienced in comparable DoD R&D CPFF contracts to assess if Raytheon's fee is within an acceptable range and if cost performance is well-managed.

What is Raytheon Company's track record with Cost Plus Fixed Fee R&D contracts awarded by the Department of Defense?

Raytheon Company, now part of RTX Corporation, has an extensive history of securing and executing large-scale R&D contracts with the Department of Defense, many of which have likely utilized Cost Plus Fixed Fee (CPFF) structures due to the nature of defense innovation. While specific performance metrics for all past CPFF contracts are not publicly detailed, Raytheon is a major defense contractor with significant experience in complex R&D projects. Their track record generally indicates a capacity to manage large budgets and deliver on technological advancements, though like any large contractor, specific contract performance can vary. A thorough review would involve examining past performance evaluations and any documented issues or successes on similar CPFF R&D awards.

What are the potential risks associated with the 'Research and Development in the Physical, Engineering, and Life Sciences' category for a defense contract?

The primary risks associated with R&D contracts in these fields for defense purposes include technological uncertainty, where breakthroughs may not occur as planned, leading to schedule delays or failure to meet objectives. Cost overruns are also a significant risk, particularly with CPFF contracts, as research often encounters unforeseen challenges requiring additional resources. Programmatic risks include the potential for the developed technology to become obsolete before deployment or to be surpassed by adversaries' advancements. Furthermore, there's a risk of scope creep if research objectives are not clearly defined and managed. Ensuring effective project management, robust technical oversight, and clear communication channels are crucial to mitigate these risks.

How has federal spending in the 'Research and Development in the Physical, Engineering, and Life Sciences' sector evolved over the past five years?

Federal spending in the R&D sector, particularly in physical, engineering, and life sciences, has generally seen consistent or increasing investment over the past five years, driven by national security priorities, technological competition, and public health needs. The Department of Defense is consistently one of the largest federal funders of R&D, with significant allocations towards advanced technologies. While specific year-over-year figures fluctuate based on budget appropriations and strategic shifts, the overall trend indicates a sustained commitment to scientific and technological advancement. This particular contract, awarded in 2018, aligns with this broader pattern of substantial federal investment in cutting-edge research.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0001418SB001

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

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: $29,688,143

Exercised Options: $29,688,143

Current Obligation: $29,688,143

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $208,010

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline