Raytheon Company awarded $25.2M for IMPLC P15 Production and Support by the Department of the Navy

Contract Overview

Contract Amount: $25,283,720 ($25.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2021-08-09

End Date: 2025-02-28

Contract Duration: 1,299 days

Daily Burn Rate: $19.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IMPLC P15 PRODUCTION AND SUPPORT

Place of Performance

Location: GOLETA, SANTA BARBARA County, CALIFORNIA, 93117

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $25.3 million to RAYTHEON COMPANY for work described as: IMPLC P15 PRODUCTION AND SUPPORT Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Long-term contract duration (1299 days) suggests a need for sustained support. 3. Firm Fixed Price contract type shifts risk to the contractor. 4. The contract falls under the Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing sector. 5. Awarded by the Department of the Navy, indicating a defense-related procurement. 6. The contract value is substantial, requiring careful oversight of performance and costs.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more detailed cost breakdowns or comparisons to similar sole-source procurements for specialized systems. The firm fixed price structure is generally favorable for cost control, but the lack of competition means the government may not have achieved the lowest possible price. The total award amount of $25.2 million over its duration suggests a significant investment in production and support for the IMPLC P15 system.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or is the sole provider of a required item or service. The lack of competition limits the government's ability to leverage market forces to drive down prices and may indicate a reliance on a single supplier for this critical system.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. Without competing offers, there is less assurance that the price reflects the best possible value achievable in a competitive market.

Public Impact

The Department of the Navy benefits from the continued production and support of the IMPLC P15 system, crucial for its operational capabilities. This contract ensures the availability of specialized systems for national defense purposes. The contract's impact is primarily within the defense sector, supporting military readiness. Workforce implications may include continued employment for specialized engineers and technicians at Raytheon Company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Lack of transparency in cost breakdown for sole-source contracts.
Potential for vendor lock-in with specialized systems.

Positive Signals

Firm Fixed Price contract shifts cost overrun risk to the contractor.
Long-term contract provides stability for production and support.
Award to a known defense contractor with established capabilities.

Sector Analysis

This contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' industry, a specialized segment of the broader aerospace and defense sector. This sector is characterized by high technological complexity, significant R&D investment, and often long product development cycles. Spending in this area is critical for maintaining national security and technological superiority. Comparable spending benchmarks would typically involve other large-scale defense contracts for similar complex systems, often awarded to major defense contractors.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. There is no explicit information regarding subcontracting plans for small businesses. The award to a large prime contractor like Raytheon Company suggests that opportunities for small businesses would likely be through subcontracting, the extent of which is not detailed in the provided data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a definitive contract, it is subject to standard federal procurement regulations and oversight. The firm fixed price nature of the contract provides a degree of accountability for the contractor to deliver within the agreed-upon price. Transparency regarding performance metrics and cost adherence would be managed through regular reporting requirements stipulated in the contract.

Related Government Programs

Naval Systems
Defense Electronics
Radar Systems
Navigation Systems

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns not borne by contractor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.3 million to RAYTHEON COMPANY. IMPLC P15 PRODUCTION AND SUPPORT

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 $25.3 million.

What is the period of performance?

Start: 2021-08-09. End: 2025-02-28.

What is the specific nature of the IMPLC P15 system and its role within the Department of the Navy's operations?

The IMPLC P15 system is related to 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing.' While the exact acronym 'IMPLC' is not publicly defined without further context, systems in this category are critical for naval operations. They typically involve advanced radar, sonar, or electronic warfare capabilities that enable ships and aircraft to detect targets, navigate effectively, and guide munitions. The 'P15' likely denotes a specific version or generation of this system. Its production and support are essential for maintaining the operational readiness and effectiveness of naval platforms, ensuring the U.S. Navy can perform its missions in diverse environments.

How does the firm fixed price (FFP) contract type benefit the government in this sole-source scenario?

In a sole-source scenario, a Firm Fixed Price (FFP) contract offers significant benefits to the government by shifting the majority of cost risk to the contractor. Unlike cost-plus contracts, the contractor is obligated to complete the work for the agreed-upon price, regardless of their actual costs. This incentivizes the contractor to manage their expenses efficiently and avoid cost overruns. While the absence of competition means the initial price might not be the absolute lowest, the FFP structure provides cost certainty for the government and simplifies financial management. It also reduces the need for extensive government oversight of the contractor's detailed costs, focusing instead on performance and delivery.

What are the potential risks associated with a sole-source award for a system like IMPLC P15?

The primary risk of a sole-source award is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government has less leverage to negotiate the best possible price. This can lead to higher costs for taxpayers. Another risk is vendor lock-in, where the government becomes dependent on a single supplier for critical systems, potentially limiting future flexibility in upgrades, maintenance, or sourcing alternatives. This dependency can also reduce the incentive for the sole-source provider to innovate or improve efficiency over time, as competition is not a driving factor.

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

Raytheon Company (now RTX) is a major defense contractor with extensive experience in producing and supporting complex defense systems, including those related to radar, sensors, and guidance. They have a long history of working with the Department of Defense and other government agencies on large-scale, high-technology programs. Their track record typically involves delivering sophisticated hardware and integrated systems, often under challenging technical requirements and tight deadlines. While specific performance details for every contract vary, Raytheon is generally recognized for its capabilities in areas relevant to the IMPLC P15 system's classification.

How does the contract duration of 1299 days impact the overall value and risk?

A contract duration of 1299 days (approximately 3.5 years) indicates a long-term commitment for the production and support of the IMPLC P15 system. This extended period provides stability for both the government and the contractor, ensuring continuity of essential services or product availability. For the government, it means a predictable supply chain for a critical component. For the contractor, it allows for better resource planning and investment. The extended duration, coupled with a firm fixed price, means the contractor assumes the risk of cost fluctuations (labor, materials) over the entire period, which could be factored into the initial pricing.

What are the implications of this contract for the broader defense industrial base?

This contract contributes to the stability and capabilities of the defense industrial base by supporting a major prime contractor, Raytheon Company, and potentially its supply chain. The production of advanced systems like the IMPLC P15 requires specialized manufacturing capabilities, skilled labor, and technological expertise. Awards like this help maintain these critical competencies within the U.S. defense sector, ensuring the nation has the capacity to develop and produce necessary defense technologies. It also reinforces the importance of companies specializing in navigation, detection, and guidance systems within the overall defense ecosystem.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001920R0079

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 6380 HOLLISTER AVE, GOLETA, CA, 93117

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: $25,283,720

Exercised Options: $25,283,720

Current Obligation: $25,283,720

Subaward Activity

Number of Subawards: 27

Total Subaward Amount: $3,533,489

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline