DoD Spends $256M on Raytheon CONFIG D Kits, Lacking Competition

Contract Overview

Contract Amount: $256,211,673 ($256.2M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2017-06-27

End Date: 2022-06-22

Contract Duration: 1,821 days

Daily Burn Rate: $140.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FY 17 CONFIG D KITS

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $256.2 million to RAYTHEON COMPANY for work described as: FY 17 CONFIG D KITS Key points: 1. Significant spending on a single vendor, Raytheon, for essential defense components. 2. Lack of competition raises concerns about potential overpricing and reduced innovation. 3. Long contract duration (5 years) may limit flexibility and market responsiveness. 4. The 'Other Support Activities for Air Transportation' category suggests a critical but potentially niche requirement.

Value Assessment

Rating: questionable

The contract value of $256M over five years for 'CONFIG D KITS' is substantial. Without competitive benchmarking, it's difficult to assess if this price is optimal compared to potential alternatives or market rates for similar support activities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Raytheon Company. This lack of competition limits price discovery and may result in higher costs for the government.

Taxpayer Impact: The absence of competition likely means taxpayers are not benefiting from the most cost-effective solution available.

Public Impact

Essential components for defense operations are being procured without competitive bidding. Taxpayers may be overpaying for these 'CONFIG D KITS' due to the sole-source nature of the contract. The long contract period could stifle innovation in the supply chain for these critical parts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Long contract duration
High contract value

Positive Signals

Definitive contract awarded
Firm Fixed Price contract type

Sector Analysis

This spending falls under defense procurement, specifically related to air transportation support activities. Benchmarks for such specialized kits are hard to establish without competitive data, but large sole-source contracts warrant scrutiny.

Small Business Impact

The data indicates this contract was awarded to Raytheon Company and does not specify any small business participation. Given the sole-source nature, opportunities for small businesses to compete or subcontract may have been missed.

Oversight & Accountability

The 'Defense Contract Management Agency' is listed as the administering agency. Oversight is crucial for sole-source contracts to ensure fair pricing and performance, especially given the significant value and duration.

Related Government Programs

Other Support Activities for Air Transportation
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competition
Potential for overpricing
Supply chain dependency
Limited innovation incentive
Long-term commitment without market validation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $256.2 million to RAYTHEON COMPANY. FY 17 CONFIG D KITS

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 $256.2 million.

What is the period of performance?

Start: 2017-06-27. End: 2022-06-22.

What specific technical capabilities or unique intellectual property does Raytheon possess that justified a sole-source award for these CONFIG D KITS?

A sole-source justification typically requires demonstrating that only one responsible source can provide the supplies or services. This could be due to unique technical expertise, proprietary technology, or critical interoperability requirements. Without this specific justification, the decision to not compete raises questions about the government's procurement strategy and potential missed savings.

How was the 'fair and reasonable' price determined for this $256M sole-source contract, and what mechanisms are in place to ensure continued price reasonableness over the five-year period?

For sole-source contracts, price reasonableness is often determined through cost analysis, price analysis based on historical data, or comparison to similar commercial items if available. The contracting officer must have performed such an analysis. However, without competition, the government lacks the strongest tool for price validation. Ongoing monitoring and potential price adjustments based on market shifts or cost changes are vital.

What is the strategic importance of these 'CONFIG D KITS,' and what are the risks associated with relying solely on Raytheon for their supply over a five-year period?

These kits are likely critical for maintaining the operational readiness of specific air platforms within the Department of Defense. The primary risks of sole-source reliance include supply chain vulnerability (disruptions affecting Raytheon could halt DoD operations), potential for price escalation without competitive pressure, and a lack of incentive for Raytheon to innovate or improve efficiency. This dependence could also limit the DoD's strategic flexibility.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001917RBKS1

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 2000 E EL SEGUNDO BLVD, EL SEGUNDO, CA, 90245

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: $256,211,673

Exercised Options: $256,211,673

Current Obligation: $256,211,673

Subaward Activity

Number of Subawards: 50

Total Subaward Amount: $20,831,899

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline