DoD Awards Raytheon $4.5M for Aircraft Parts Repair, Lacking Competition

Contract Overview

Contract Amount: $4,544,769 ($4.5M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2022-08-25

End Date: 2026-06-30

Contract Duration: 1,405 days

Daily Burn Rate: $3.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: REPAIR OF REPAIRABLES & SUPPORT SERVICES

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $4.5 million to RAYTHEON COMPANY for work described as: REPAIR OF REPAIRABLES & SUPPORT SERVICES Key points: 1. Significant contract value of $4.5 million awarded to a single large business. 2. Lack of competition raises concerns about potential overpricing and reduced innovation. 3. Contract type (Cost Plus Fixed Fee) can incentivize higher costs. 4. Sector focus on aircraft parts manufacturing is critical for defense readiness.

Value Assessment

Rating: questionable

The Cost Plus Fixed Fee contract type, combined with a lack of competition, suggests potential for higher-than-necessary costs. Benchmarking against similar contracts for aircraft parts repair is difficult without competitive data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and may lead to less favorable terms for the government compared to a competitive process.

Taxpayer Impact: The absence of competition could result in taxpayers paying more for these repair services than if multiple vendors had vied for the contract.

Public Impact

Taxpayers may be overpaying for essential aircraft repair services due to the lack of competitive bidding. Dependence on a single contractor for critical parts could pose supply chain risks. The Department of the Navy's procurement process for this service warrants closer examination for future opportunities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Lack of transparency in pricing

Positive Signals

Supports critical defense infrastructure
Awarded to established defense contractor

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts and auxiliary equipment. Spending in this area is crucial for maintaining military readiness, but competitive procurement is vital to ensure cost-effectiveness.

Small Business Impact

The contract was awarded to Raytheon Company, a large business. There is no indication that small businesses were involved in this specific award, missing an opportunity to support the small business industrial base.

Oversight & Accountability

The sole-source nature of this award suggests a potential gap in oversight regarding competitive sourcing strategies. Further review is needed to ensure the Department of the Navy is maximizing competition where feasible.

Related Government Programs

Other Aircraft Parts and Auxiliary Equipment Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competition
Potential for cost overruns (CPFF)
Limited transparency in pricing
No small business participation
Sole-source award justification unclear

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $4.5 million to RAYTHEON COMPANY. REPAIR OF REPAIRABLES & SUPPORT SERVICES

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 $4.5 million.

What is the period of performance?

Start: 2022-08-25. End: 2026-06-30.

What is the justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of market availability. Without specific details, it's difficult to assess the validity of this decision. The Department of the Navy should provide clear documentation demonstrating why competition was not feasible or beneficial for this requirement.

How does the Cost Plus Fixed Fee structure impact the final cost compared to other contract types for similar services?

Cost Plus Fixed Fee contracts reimburse the contractor for allowable costs plus a predetermined fixed fee. While providing flexibility, this structure can incentivize cost overruns as the government bears the risk of increased expenses. A fixed-price contract might offer better cost control if the scope of work is well-defined.

What measures are in place to ensure the quality and timeliness of repairs under this sole-source contract?

Despite the lack of competition, robust quality assurance surveillance plans (QASPs) and performance metrics should be actively managed by the contracting officer's representative. Regular performance reviews and adherence to delivery schedules are crucial to ensure the government receives the expected value and maintains operational readiness.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

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: $4,544,769

Exercised Options: $4,544,769

Current Obligation: $4,544,769

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001920G0007

IDV Type: BOA

Timeline