Raytheon Company awarded $16.5M contract for aircraft parts, with a 10-year duration and limited competition

Contract Overview

Contract Amount: $17,016,365 ($17.0M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2002-10-11

End Date: 2011-12-31

Contract Duration: 3,368 days

Daily Burn Rate: $5.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200304!006531!1700!AC528 !NAVAL AIR SYSTEMS COMMAND !N0001903C6515 !A!N! !N! !20021011!20041015!001463090!001463090!001339159!N!RAYTHEON COMPANY !1847 W MAIN RD !PORTSMOUTH !RI!02871!57700!005!44!PORTSMOUTH !NEWPORT !RHODE ISLD!+000016500000!N!N!000000000000!1680!MSL AIRCRAFT ACCESSORIES AND COMPONENTS !A1C!OTHER AIRCRAFT EQUIPMENT !2AHB!UH-2 SEASPRITE !336413!E! !3! ! ! ! ! !99990909!B! ! !A! !D!U!J!1!001!N!1A!A!Y!F! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: PORTSMOUTH, NEWPORT County, RHODE ISLAND, 02871

State: Rhode Island Government Spending

Plain-Language Summary

Department of Defense obligated $17.0 million to RAYTHEON COMPANY for work described as: 200304!006531!1700!AC528 !NAVAL AIR SYSTEMS COMMAND !N0001903C6515 !A!N! !N! !20021011!20041015!001463090!001463090!001339159!N!RAYTHEON COMPANY !1847 W MAIN RD !PORTSMOUTH !RI!02871!57700!005!44!PORTSMOUTH !NEWPO… Key points: 1. Contract awarded for aircraft parts, indicating a need for specialized components in the defense sector. 2. The contract's long duration suggests a sustained requirement for these parts. 3. Limited competition raises questions about potential price overruns and value for money. 4. The awardee, Raytheon Company, is a major defense contractor with a significant presence in the industry. 5. The specific parts procured are for UH-2 SEASPRITE helicopters, highlighting a niche but critical support function. 6. The contract's value, while substantial, needs to be benchmarked against similar procurements for a full value assessment.

Value Assessment

Rating: fair

The contract value of $16.5 million over approximately 10 years averages to about $1.65 million per year. Without specific details on the quantity and type of aircraft parts, a direct comparison to similar contracts is challenging. However, given the long duration and the nature of specialized aircraft components, the pricing appears to be within a plausible range, though a detailed cost breakdown would be necessary for a definitive value assessment. The lack of robust competition could imply less downward pressure on pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not fully competed, indicating a limited solicitation process. The specific reasons for this limited competition are not detailed in the provided data. A limited competition can sometimes lead to higher prices compared to full and open competition due to reduced market pressure. The number of bidders is not specified, but the classification suggests fewer than would be expected in a full and open process.

Taxpayer Impact: Taxpayers may have paid a premium due to the limited competitive environment, potentially missing out on cost savings that a broader solicitation could have generated.

Public Impact

The primary beneficiaries are likely the U.S. Navy or other branches utilizing the UH-2 SEASPRITE helicopter, ensuring operational readiness. Services delivered include the supply of essential aircraft parts and auxiliary equipment, crucial for maintenance and repair. The geographic impact is primarily within the United States, supporting defense operations and potentially maintenance facilities. Workforce implications include support for specialized manufacturing and logistics roles within Raytheon Company and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have resulted in a higher price than could have been achieved through full and open bidding.
The long contract duration could lead to price increases over time if not adequately managed.
Lack of detailed performance metrics makes it difficult to assess the contractor's efficiency and effectiveness.
Dependence on a single contractor for critical parts can create supply chain risks.

Positive Signals

Award to a known entity, Raytheon Company, suggests a level of trust and established capability.
The contract addresses a specific need for UH-2 SEASPRITE helicopter components, indicating targeted support.
The long duration implies a stable, long-term relationship that can foster efficiency in production and delivery.

Sector Analysis

This contract falls within the Aerospace and Defense sector, specifically focusing on aircraft parts and components. The market for such specialized parts is often characterized by high barriers to entry, stringent quality requirements, and a limited number of qualified suppliers. Comparable spending benchmarks would involve analyzing other contracts for similar helicopter parts or MRO (Maintenance, Repair, and Overhaul) services within the Department of Defense.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false) and does not explicitly mention subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem appears minimal for this specific award. However, large prime contractors like Raytheon are often required to have overall small business subcontracting goals, which may indirectly benefit small businesses if they are part of Raytheon's broader supply chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. Accountability measures would be embedded in the contract's terms and conditions, including delivery schedules and quality standards. Transparency is facilitated through contract databases like FPDS, but detailed operational oversight information is usually internal to the agency and contractor.

Related Government Programs

Aircraft Parts and Auxiliary Equipment Manufacturing
Helicopter Maintenance and Repair
Defense Logistics and Supply Chain Management
Aerospace Component Manufacturing

Risk Flags

Limited Competition
Long Contract Duration
Lack of Detailed Performance Data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.0 million to RAYTHEON COMPANY. 200304!006531!1700!AC528 !NAVAL AIR SYSTEMS COMMAND !N0001903C6515 !A!N! !N! !20021011!20041015!001463090!001463090!001339159!N!RAYTHEON COMPANY !1847 W MAIN RD !PORTSMOUTH !RI!02871!57700!005!44!PORTSMOUTH !NEWPORT !RHODE ISLD!+000016500000!N!N!000000000000!1680!MSL AIRCRAFT ACCESSORIES AND COMPONENTS !A1C!OTHER AIRCRAFT EQUIPMENT !2AHB!UH-2 SEASPRITE !336413!E! !3! ! ! ! ! !99990909!B

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 $17.0 million.

What is the period of performance?

Start: 2002-10-11. End: 2011-12-31.

What is the specific nature of the 'Other Aircraft Parts and Auxiliary Equipment' being procured for the UH-2 SEASPRITE helicopter?

The provided data classifies the product service code (PSC) as '3345' (Aircraft Electrical and Electronic Equipment) and the North American Industry Classification System (NAICS) code as '336413' (Other Aircraft Parts and Auxiliary Equipment Manufacturing). While the specific part numbers or categories are not detailed, this suggests components related to the electrical, electronic, or other auxiliary systems of the UH-2 SEASPRITE helicopter. These could range from avionic components, power distribution units, sensors, or other critical support equipment necessary for the helicopter's operation and maintenance. The long duration and value indicate these are likely essential, non-expendable parts.

How does the $16.5 million contract value compare to historical spending on UH-2 SEASPRITE parts?

To accurately compare this $16.5 million contract value to historical spending, one would need access to historical procurement data specifically for UH-2 SEASPRITE parts from the Department of Defense. This contract spans from October 2002 to December 2011, a period of over 9 years. If this represents a significant portion of the total lifecycle cost for parts for this helicopter type during that era, it suggests a substantial requirement. Benchmarking against similar contracts for other helicopter platforms or against the total operating budget for the UH-2 SEASPRITE fleet would provide further context on whether this represents efficient or excessive spending.

What are the specific risks associated with the 'limited' competition for this contract?

The primary risk associated with limited competition is the potential for inflated pricing. When fewer bidders are involved, the incentive to offer the most competitive price is reduced. This can lead to the government paying more than necessary for the goods or services. Additionally, limited competition can stifle innovation, as contractors may feel less pressure to develop more cost-effective or technologically advanced solutions. It can also concentrate market power with a few suppliers, potentially creating future dependencies and vulnerabilities in the supply chain. Without transparency into why competition was limited, it's difficult to ascertain if there were justifiable reasons, such as unique technical capabilities or sole-source proprietary parts.

What is Raytheon Company's track record with similar defense contracts?

Raytheon Company is a major defense contractor with an extensive track record of fulfilling complex contracts for the U.S. military and international allies. They are known for producing a wide range of defense systems, including aircraft components, missiles, radar, and cybersecurity solutions. Their history includes numerous large-value contracts across various branches of the armed forces. While specific performance metrics for this particular contract are not detailed, Raytheon's general standing suggests they possess the technical expertise and manufacturing capacity to handle such procurements. However, like any large contractor, they may have faced past performance issues on specific contracts, which would typically be documented in government performance assessment systems.

What are the potential performance implications of a contract awarded in 2002 and ending in 2011 for aircraft parts?

A contract awarded in 2002 and ending in 2011 for aircraft parts implies a long-term sustainment requirement. The UH-2 SEASPRITE helicopter itself has a long service history, and this contract likely supported its continued operation and maintenance during that period. The implications are that the parts procured were essential for keeping the aircraft mission-capable. The extended duration suggests a stable demand, potentially allowing for economies of scale in production. However, it also raises questions about the obsolescence of the helicopter type and its parts towards the end of the contract period, and whether newer, more efficient platforms were being considered or introduced.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 1847 W MAIN RD, PORTSMOUTH, RI, 01

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

Contract Characteristics

Cost or Pricing Data: YES

Timeline