Raytheon Company awarded $11.7M for IGF Special Tooling and Test Equipment by the Department of the Navy

Contract Overview

Contract Amount: $11,741,258 ($11.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2017-09-26

End Date: 2020-12-18

Contract Duration: 1,179 days

Daily Burn Rate: $10.0K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF SPECIAL TOOLING AND TEST EQUIPMENT

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85701

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $11.7 million to RAYTHEON COMPANY for work described as: IGF::OT::IGF SPECIAL TOOLING AND TEST EQUIPMENT Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. The contract type is Cost Plus Fixed Fee, which can incentivize cost overruns. 3. Performance period spans over three years, indicating a long-term need. 4. The contract is for specialized tooling and test equipment, crucial for missile and space vehicle manufacturing. 5. The award was made to Raytheon Company, a major defense contractor. 6. The contract was issued as a delivery order under a larger contract vehicle.

Value Assessment

Rating: fair

The contract value of $11.7 million for specialized tooling and test equipment appears reasonable given the nature of the goods. However, without specific benchmarks for similar tooling or detailed cost breakdowns, a precise value-for-money assessment is challenging. The Cost Plus Fixed Fee (CPFF) contract type carries inherent risks of cost escalation, which could impact the final value. Comparing this to other contracts for similar specialized equipment within the Department of Defense would provide better context.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This typically occurs when a specific contractor possesses unique capabilities or proprietary technology essential for the requirement. The lack of competition means that taxpayers did not benefit from potential price reductions that could arise from a competitive bidding process.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible price, potentially leading to higher costs for taxpayers compared to a competed contract.

Public Impact

The Department of the Navy benefits from the acquisition of essential tooling and test equipment for its guided missile and space vehicle programs. This contract supports the manufacturing and maintenance capabilities for advanced defense systems. The primary beneficiary is the defense industrial base, specifically Raytheon Company, which will perform the work. The geographic impact is concentrated in Arizona, where Raytheon's operations are located.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type may lead to higher costs than anticipated.
Sole-source award limits competitive pressure on pricing.
Lack of detailed cost breakdown makes independent value assessment difficult.

Positive Signals

Contract supports critical defense manufacturing capabilities.
Awarded to a known, experienced defense contractor.
Long performance period suggests a sustained need for the equipment.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically supporting the manufacturing of guided missiles and space vehicles. The market for specialized tooling and test equipment for such advanced systems is often concentrated among a few key defense contractors. Spending in this area is driven by national security requirements and the need for cutting-edge technological capabilities. Comparable spending benchmarks would likely be found within other major defense procurement programs requiring similar specialized manufacturing support.

Small Business Impact

There is no indication that this contract included small business set-asides. As a sole-source award to a large prime contractor, it is unlikely to have direct subcontracting opportunities specifically mandated for small businesses within this award. The impact on the small business ecosystem would be indirect, potentially through Raytheon's existing supply chain relationships.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. The Inspector General for the Department of Defense would have jurisdiction to investigate any potential fraud, waste, or abuse. Transparency is limited due to the sole-source nature and the proprietary aspects of specialized tooling.

Related Government Programs

Guided Missile and Space Vehicle Manufacturing
Defense Industrial Base
Specialized Tooling and Test Equipment Procurement

Risk Flags

Sole-source award limits competition.
Cost Plus Fixed Fee contract type carries risk of cost overruns.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.7 million to RAYTHEON COMPANY. IGF::OT::IGF SPECIAL TOOLING AND TEST EQUIPMENT

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 $11.7 million.

What is the period of performance?

Start: 2017-09-26. End: 2020-12-18.

What is Raytheon Company's track record with the Department of Defense for similar tooling and test equipment contracts?

Raytheon Company has a long and extensive history of contracting with the Department of Defense, including for specialized tooling and test equipment. As a major defense contractor, they are involved in numerous programs across various military branches. Their track record typically includes delivering complex systems and associated support equipment. However, specific performance metrics, past issues, or successes related to prior tooling contracts would require a deeper dive into contract performance reports and historical data. Without access to that granular information, it's difficult to provide a definitive assessment of their track record specifically for this type of equipment beyond their general reputation as a large, established defense supplier.

How does the $11.7 million contract value compare to similar specialized tooling contracts awarded by the Navy or other DoD branches?

Benchmarking the $11.7 million contract value for specialized tooling and test equipment is challenging without access to a comprehensive database of comparable contracts. The uniqueness of 'special tooling and test equipment' means that each requirement can be highly specific, varying significantly in complexity, technology, and scope. Generally, costs for such specialized items can be substantial due to research, development, and precision manufacturing involved. If this contract is for unique, mission-critical equipment for advanced missile systems, the price might be within a reasonable range for the defense sector. However, a definitive comparison would necessitate identifying contracts with similar technical specifications, production volumes, and performance periods within the DoD.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for specialized tooling?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract for specialized tooling is the potential for cost overruns. In a CPFF structure, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. While the fee is fixed, the contractor has less incentive to control costs compared to fixed-price contracts, as they are guaranteed to cover their expenses. This can lead to the government paying more than initially anticipated if costs escalate. For specialized tooling, where development and manufacturing processes can be complex and unpredictable, this risk is amplified. Effective oversight and robust cost accounting by the government are crucial to mitigate these risks.

What is the strategic importance of this contract for the Department of the Navy's guided missile and space vehicle programs?

This contract is strategically important as it provides the essential specialized tooling and test equipment required for the manufacturing and maintenance of guided missiles and space vehicles. These systems are critical components of national defense capabilities. Having the right tools and testing apparatus ensures that these complex weapons systems can be produced to specification, function reliably, and be maintained effectively throughout their lifecycle. The availability of this specialized equipment directly supports the Navy's readiness and its ability to project power. Delays or deficiencies in acquiring this tooling could impact production schedules and the overall effectiveness of these vital defense assets.

How has the Department of the Navy's spending on guided missile and space vehicle manufacturing support equipment evolved over the past five years?

Analyzing the evolution of the Department of the Navy's spending on guided missile and space vehicle manufacturing support equipment over the past five years requires access to historical procurement data. Generally, spending in this area is influenced by modernization programs, new platform development, and sustainment requirements for existing fleets. Given the ongoing strategic importance of naval aviation and missile defense, it is likely that spending in this category has remained significant, potentially increasing with the introduction of new technologies or upgrades to existing systems. Fluctuations may also occur based on specific program milestones and budget allocations. A detailed trend analysis would involve aggregating spending data across relevant contract vehicles and fiscal years.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001915R0004

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

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: $11,741,258

Exercised Options: $11,741,258

Current Obligation: $11,741,258

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0001915D0031

IDV Type: IDC

Timeline