Raytheon Company awarded $437.9M for JPALS SDD by the Department of the Navy

Contract Overview

Contract Amount: $437,905,725 ($437.9M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2008-07-17

End Date: 2016-11-30

Contract Duration: 3,058 days

Daily Burn Rate: $143.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: JPALS SDD

Place of Performance

Location: FULLERTON, ORANGE County, CALIFORNIA, 92833

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $437.9 million to RAYTHEON COMPANY for work described as: JPALS SDD Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Incentive Fee (CPIF), which can incentivize cost control but also carries inherent risk. 3. The duration of the contract is substantial at 3058 days, indicating a long-term project. 4. The award was made by the Department of the Navy, a major defense procurement agency. 5. The North American Industry Classification System (NAICS) code 334511 points to the manufacturing of search, detection, and navigation instruments. 6. The contract value of over $437 million represents a significant investment in this system. 7. The contract was awarded in 2008 and completed in 2016, providing historical performance data.

Value Assessment

Rating: fair

The contract value of $437.9 million for the JPALS SDD program is substantial. Without specific benchmarks for similar System Development and Demonstration (SDD) contracts for advanced navigation systems, a precise value-for-money assessment is challenging. The CPIF contract type means the final cost could deviate from the initial estimate based on performance. Further analysis would require comparing the delivered capabilities and performance against the initial objectives and the costs incurred by similar programs within the Department of Defense.

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 presence of two bids suggests a degree of competition, but the exact number of interested parties and the nature of the proposals would be needed for a comprehensive analysis. A competitive process generally aims to achieve better pricing and terms for the government.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it is intended to drive down costs through market forces and encourage innovation among bidders.

Public Impact

The primary beneficiaries are the U.S. Navy personnel who will utilize the JPALS (Joint Precision Approach and Landing System) for enhanced operational capabilities. The contract delivered System Development and Demonstration (SDD) for a critical navigation and guidance system. The geographic impact is primarily within the Department of the Navy's operational theaters and bases. The contract likely supported a workforce skilled in aerospace engineering, software development, and systems integration within Raytheon Company and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Incentive Fee contracts can lead to cost overruns if not managed rigorously.
The long contract duration (3058 days) increases the risk of scope creep and evolving technological requirements.
Limited competition (2 bidders) might indicate high barriers to entry or a specialized market, potentially impacting price.

Positive Signals

Awarded through full and open competition, suggesting a robust market engagement.
The contract addresses a critical defense capability (navigation and landing systems).
The specific NAICS code indicates a focus on advanced technological manufacturing.

Sector Analysis

The contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector, a specialized area within the broader aerospace and defense industry. This sector is characterized by high R&D investment, stringent quality requirements, and significant government procurement. Comparable spending benchmarks would involve analyzing other SDD contracts for advanced avionics and navigation systems within the Department of Defense and other federal agencies.

Small Business Impact

There is no indication from the provided data that this contract included small business set-asides or specific subcontracting goals. As a large-scale defense contract, it is possible that Raytheon Company engaged small businesses as subcontractors, but this information is not detailed here. Further investigation into subcontracting reports would be necessary to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would have been managed by the Department of the Navy's contracting and program management offices. Inspector General (IG) jurisdiction would apply for investigations into fraud, waste, or abuse. Transparency is typically managed through contract reporting mechanisms and public contract databases, though detailed performance metrics may be sensitive.

Related Government Programs

Joint Precision Approach and Landing System (JPALS)
Naval Air Systems Command (NAVAIR) Contracts
Defense System Development Contracts
Aerospace Navigation Systems

Risk Flags

Cost Plus Incentive Fee contract type requires careful monitoring to manage costs.
Long contract duration increases potential for scope creep and requirement changes.
Limited competition (2 bidders) may warrant scrutiny for potential price impacts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $437.9 million to RAYTHEON COMPANY. JPALS SDD

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 $437.9 million.

What is the period of performance?

Start: 2008-07-17. End: 2016-11-30.

What was the final contract value upon completion, and how did it compare to the initial award amount?

The initial award amount for the JPALS SDD contract was $437,905,725. The provided data does not include the final contract value upon completion, only the initial award. For Cost Plus Incentive Fee (CPIF) contracts, the final cost can vary based on the contractor's performance against established targets for cost, schedule, and performance. Without the final expenditure data, it's impossible to determine if the contract was completed within budget or if incentives were earned or penalties incurred. Further analysis would require accessing contract modification history and final payment records.

How did Raytheon Company's performance on this contract compare to its historical track record with the Department of the Navy?

Assessing Raytheon Company's performance on this specific JPALS SDD contract requires detailed performance metrics, such as on-time delivery, adherence to technical specifications, and cost control, which are not fully detailed in the provided summary data. Raytheon is a major defense contractor with extensive experience, and its overall track record with the Department of the Navy is generally robust, involving numerous complex programs. However, performance can vary significantly between individual contracts. A comparative analysis would involve reviewing past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) for this specific contract and comparing it against other similar SDD contracts awarded to Raytheon by the Navy to identify any trends or anomalies.

What were the key performance objectives and deliverables for the JPALS SDD contract?

The JPALS SDD contract focused on the System Development and Demonstration phase for the Joint Precision Approach and Landing System. Key objectives likely included the design, development, integration, testing, and demonstration of a system capable of providing highly accurate and reliable precision approach and landing guidance for various naval aircraft in diverse operational environments. Deliverables would typically encompass system design documents, software code, hardware prototypes, test reports, integration plans, and a demonstrated, functional system meeting specified performance requirements. The 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' NAICS code further suggests the development of sophisticated hardware and software components critical for safe and effective aircraft operations.

Were there any significant risks or challenges encountered during the execution of this contract?

Given the nature of System Development and Demonstration (SDD) contracts, particularly in complex defense systems like JPALS, significant risks and challenges are common. Potential risks include technological hurdles in achieving required precision and reliability, integration issues between different system components and existing platforms, schedule delays due to unforeseen technical difficulties or testing complexities, and cost overruns, especially with a CPIF contract type where cost targets are crucial. The long duration of the contract (3058 days) also increases the likelihood of encountering evolving requirements or external factors impacting execution. Specific details on encountered risks would typically be found in program management reviews, contractor performance reports, and potentially IG audits if issues were severe.

How does the $437.9 million award for JPALS SDD compare to historical spending on similar navigation and guidance systems by the Department of the Navy?

The $437.9 million award for the JPALS SDD contract represents a substantial investment in advanced navigation and landing systems. To benchmark this against historical spending, one would need to analyze the Department of the Navy's procurement history for similar systems, such as other precision landing systems, advanced avionics suites, or guidance and control systems developed over the past decade or two. Factors like inflation, technological advancements, and the specific scope (SDD vs. full production) would need to be considered. Without access to a comprehensive database of historical Navy procurements for comparable systems, a precise comparison is difficult. However, given the complexity and critical nature of precision landing systems, this value is likely within the expected range for a major SDD effort in the defense sector.

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

Solicitation ID: N0001907R0044

Offers Received: 2

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 1801 HUGHES DR, FULLERTON, CA, 92833

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $444,358,853

Exercised Options: $439,358,853

Current Obligation: $437,905,725

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline