Raytheon Company awarded $11.6M contract for AESA radar depot stand-up program by the Department of Defense

Contract Overview

Contract Amount: $11,602,620 ($11.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2006-11-15

End Date: 2009-11-30

Contract Duration: 1,111 days

Daily Burn Rate: $10.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: AN/APG-79 AESA DEPOT STAND UP PROGRAM

Place of Performance

Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $11.6 million to RAYTHEON COMPANY for work described as: AN/APG-79 AESA DEPOT STAND UP PROGRAM Key points: 1. Contract awarded to a single, large defense contractor, indicating a specialized need or established relationship. 2. The contract duration of 1111 days suggests a significant, multi-year effort for depot operations. 3. Awarded under a definitive contract type, implying a clear scope of work and established terms. 4. The program aims to establish depot capabilities for advanced radar systems, crucial for military readiness. 5. Geographic location in California may indicate specific facility requirements or existing infrastructure. 6. The absence of small business set-asides suggests the scope or nature of the work is not conducive to smaller enterprise participation.

Value Assessment

Rating: fair

The total award amount of $11.6 million for establishing a depot stand-up program is difficult to benchmark without specific details on the scope of services and equipment involved. As a definitive contract, the pricing structure is likely based on negotiated rates for labor and materials. Further analysis would require comparing this to similar depot stand-up initiatives for comparable defense systems, considering factors like facility size, personnel required, and the complexity of the systems being supported. The cost-plus-fixed-fee structure suggests that while costs are reimbursed, a fixed profit margin is applied, which can incentivize efficiency but also carries some risk of cost overruns if not managed tightly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. However, with only one awardee, Raytheon Company, it suggests that either only one bid was received, or Raytheon's proposal was deemed the most advantageous. The level of competition is not explicitly detailed beyond the 'full and open' designation, making it hard to assess the breadth of market interest. This competitive process, in theory, should drive price discovery and ensure the government receives competitive offers.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best value through a wide range of potential providers, potentially leading to lower prices and higher quality services.

Public Impact

The primary beneficiaries are the Department of Defense, specifically units relying on AN/APG-79 AESA radar systems, ensuring their operational readiness and maintenance. The services delivered include the establishment of depot-level maintenance and support capabilities for advanced radar technology. The geographic impact is centered in California, where the depot operations will be physically located. Workforce implications include the creation of specialized technical and maintenance jobs within the defense sector in California.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can sometimes lead to higher overall costs if not meticulously managed and monitored for efficiency.
The lack of specific details on the number of bidders in the 'full and open' competition makes it difficult to fully assess the competitive pressure on pricing.
The long contract duration could present risks if technology or operational requirements change significantly over time.

Positive Signals

Awarded through full and open competition, suggesting a robust process to identify the best value provider.
The contract addresses a critical need for depot-level support of advanced radar systems, enhancing military capabilities.
The definitive contract type provides a clear framework for the services to be rendered.

Sector Analysis

The defense electronics sector, particularly radar systems manufacturing and maintenance, is a highly specialized and technologically advanced market. Companies like Raytheon are key players, often holding significant intellectual property and manufacturing capabilities. This contract fits within the broader defense industrial base, focusing on sustainment and operational readiness of critical airborne radar systems. Benchmarking this specific contract is challenging without comparative data on similar depot stand-up programs for advanced radar systems, but it represents a significant investment in maintaining high-tech military assets.

Small Business Impact

This contract does not appear to have a small business set-aside, as indicated by 'sb: false'. The nature of establishing a depot for advanced radar systems likely requires specialized facilities, certifications, and a scale of operations typically handled by larger prime contractors. There is no explicit information regarding subcontracting plans for small businesses within this award notice, though it is common for large prime contractors to engage small businesses for various support services.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance with contract terms. As a definitive contract, accountability is established through the defined scope of work and payment milestones. Transparency is facilitated through contract award databases, though detailed operational performance metrics may not be publicly available. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

AN/APG-79 AESA Radar Systems
Defense Depot Maintenance Programs
Airborne Radar Systems Sustainment
Naval Aviation Support Contracts

Risk Flags

Cost-Plus-Fixed-Fee contract type requires careful monitoring to prevent cost overruns.
Limited public information on the number of bidders in the full and open competition.
Long contract duration may pose risks if requirements evolve.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.6 million to RAYTHEON COMPANY. AN/APG-79 AESA DEPOT STAND UP PROGRAM

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 $11.6 million.

What is the period of performance?

Start: 2006-11-15. End: 2009-11-30.

What is the specific scope of services included in the 'depot stand up' for the AN/APG-79 AESA radar system?

The 'depot stand up' for the AN/APG-79 AESA radar system likely encompasses establishing the necessary infrastructure, equipment, trained personnel, and processes required for comprehensive maintenance, repair, overhaul, and testing of these advanced radar systems at a depot level. This could include setting up specialized calibration stations, diagnostic equipment, secure storage facilities, and implementing quality control procedures. The goal is to ensure the long-term operational readiness and reliability of the radar systems, which are critical components for various naval aviation platforms. The specific details of the services would be elaborated in the contract's Statement of Work (SOW).

How does the cost-plus-fixed-fee (CPFF) pricing structure impact the overall cost-effectiveness for the government?

The Cost-Plus-Fixed-Fee (CPFF) structure reimburses the contractor for allowable costs incurred plus a predetermined fixed fee representing profit. This structure is often used when the scope of work is not precisely defined or is subject to change, as is common in complex system development or support programs. For the government, CPFF offers flexibility but carries the risk of cost overruns if the contractor's actual costs exceed estimates. The fixed fee provides the contractor with an incentive to control costs to maximize their profit margin, but the government bears the primary risk of cost escalation. Effective oversight and robust cost accounting standards are crucial to ensure cost-effectiveness under a CPFF arrangement.

What are the key performance indicators (KPIs) used to measure the success of this depot stand-up program?

Key Performance Indicators (KPIs) for a depot stand-up program like this would typically focus on operational readiness, efficiency, and quality. Examples could include Mean Time Between Failures (MTBF) for repaired systems, Mean Time To Repair (MTTR), turnaround time for depot-level maintenance tasks, accuracy of diagnostic testing, adherence to budget for operational costs, and personnel training completion rates. The government would likely establish specific, measurable, achievable, relevant, and time-bound (SMART) KPIs in the contract's Performance Work Statement (PWS) to monitor the contractor's performance and ensure the depot meets the required standards for supporting the AN/APG-79 AESA radar systems.

What is the historical spending trend for AN/APG-79 AESA radar system support and maintenance by the Department of Defense?

Analyzing historical spending trends for AN/APG-79 AESA radar system support and maintenance requires access to detailed contract databases and budget allocations over several fiscal years. Without specific data, it's challenging to provide precise figures. However, the AN/APG-79 is a sophisticated radar system used on advanced platforms like the F/A-18E/F Super Hornet. As such, its sustainment and depot-level support would likely represent a significant and ongoing investment for the Department of Defense, potentially in the tens to hundreds of millions of dollars annually, depending on the fleet size, operational tempo, and technological upgrades. This contract for depot stand-up is a foundational investment for future sustainment spending.

What is Raytheon Company's track record in managing similar large-scale defense depot operations?

Raytheon Company, now part of RTX, has an extensive track record in managing complex defense programs, including the development, production, and sustainment of advanced radar systems like the AN/APG-79. They have historically been involved in various depot-level maintenance and support contracts for military platforms and systems across different branches of the U.S. military. Their experience likely includes establishing and operating specialized facilities, managing supply chains for spare parts, providing technical expertise, and ensuring compliance with stringent military standards. While specific details of past depot operations for this exact radar system would require deeper investigation, Raytheon's overall profile as a major defense contractor suggests a strong capability in managing such endeavors.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 2000 EAST EL SEGUNDO BLVD., EL SEGUNDO, CA, 90245

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $11,760,020

Exercised Options: $11,760,020

Current Obligation: $11,602,620

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline