Raytheon Company awarded $13.3M for CV-22 SKR JASS instrumentation and software, a sole-source contract

Contract Overview

Contract Amount: $13,349,745 ($13.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2022-10-28

End Date: 2026-08-31

Contract Duration: 1,403 days

Daily Burn Rate: $9.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: CV-22 SKR JASS INSTRUMENTATION AND JASS PORT FORWARD SOFTWARE

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46219

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $13.3 million to RAYTHEON COMPANY for work described as: CV-22 SKR JASS INSTRUMENTATION AND JASS PORT FORWARD SOFTWARE Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. The contract is for specialized instrumentation and software for the CV-22 aircraft. 3. Performance period extends over three years, indicating a long-term need. 4. The contract type is Cost Plus Fixed Fee, which can incentivize cost overruns. 5. The award is a delivery order under a larger contract vehicle. 6. The North American Industry Classification System (NAICS) code is 336413, indicating aircraft parts manufacturing.

Value Assessment

Rating: questionable

Benchmarking the value of this specific delivery order is challenging without access to the parent contract's details and historical performance. However, the Cost Plus Fixed Fee (CPFF) contract type, especially when not competitively bid, carries inherent risks of higher costs compared to fixed-price arrangements. The absence of competition suggests that the government may not have achieved the most favorable pricing. Further analysis would require comparing the labor rates and overhead applied to this order against industry standards and similar government contracts for specialized aerospace components and software development.

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. This typically occurs when only one responsible source can provide the required goods or services. The lack of competition means that the government did not benefit from the price discovery mechanisms that arise from multiple bidders vying for the contract. This can lead to higher prices than might be achieved in a competitive environment.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. Without multiple offers, there is less pressure on the contractor to offer the lowest possible price.

Public Impact

The primary beneficiaries are the Department of the Navy and potentially other branches utilizing the CV-22 Osprey aircraft. The contract delivers critical instrumentation and software essential for the operational capabilities of the CV-22. The geographic impact is likely concentrated around naval aviation facilities and the operational theaters where the CV-22 is deployed. The contract supports specialized technical roles within Raytheon Company, contributing to the aerospace and defense workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost Plus Fixed Fee contract type can lead to cost escalation if not closely managed.
Lack of detailed public information on the parent contract makes comprehensive value assessment difficult.

Positive Signals

Award supports critical national defense capabilities for the CV-22 aircraft.
Contract ensures continued availability of specialized instrumentation and software.
Delivery order structure suggests it's part of an existing, potentially well-managed, program.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft parts and auxiliary equipment manufacturing, as indicated by NAICS code 336413. The market for specialized avionics, instrumentation, and software for military aircraft is characterized by high barriers to entry due to technological complexity and stringent certification requirements. Spending in this area is driven by the need to maintain and upgrade aging fleets, as well as to equip new platforms with advanced capabilities. Comparable spending benchmarks would typically involve other sole-source or limited-competition awards for similar specialized components and software for high-value military platforms.

Small Business Impact

This contract does not appear to involve a small business set-aside, as indicated by 'sb': false. Furthermore, the 'ss' flag is also false, suggesting it's not a small business prime contractor. Therefore, the direct impact on small businesses as prime contractors is likely minimal. However, Raytheon Company, as a large defense contractor, may engage small businesses as subcontractors for specific components or services, though this is not explicitly 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 delivery order under a larger contract, oversight mechanisms established for the parent contract would likely apply. Transparency is limited due to the sole-source nature and the lack of detailed public reporting on the specific justifications for the award and the cost build-up. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

CV-22 Osprey Program
Department of Defense Aircraft Procurement
Aerospace Instrumentation and Avionics
Defense Software Development Contracts

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.3 million to RAYTHEON COMPANY. CV-22 SKR JASS INSTRUMENTATION AND JASS PORT FORWARD SOFTWARE

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 $13.3 million.

What is the period of performance?

Start: 2022-10-28. End: 2026-08-31.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED' and is 'sole-source'. While the specific justification is not detailed, common reasons for sole-source awards in defense contracting include unique technical capabilities, proprietary technology, urgent and compelling needs where only one source can meet the requirement, or if the original competition yielded no acceptable offers. For the CV-22 SKR JASS instrumentation and software, it's plausible that Raytheon Company possesses unique intellectual property, specialized manufacturing processes, or essential integration knowledge for this specific aircraft system that cannot be replicated by other vendors. A formal Justification for Other Than Full and Open Competition (JOFOC) would typically be required and documented by the agency.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other contract types in terms of cost efficiency for this type of procurement?

Cost Plus Fixed Fee (CPFF) contracts are often used when the scope of work is not precisely defined, or when there is significant uncertainty in the cost of performance, such as in research and development or complex system integration. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. While this structure allows for flexibility and can be suitable for novel or evolving requirements, it carries a higher risk of cost overruns compared to fixed-price contracts. The contractor has less incentive to control costs, as the fee is fixed regardless of the final cost. For specialized instrumentation and software, if the requirements are well-defined and performance can be clearly specified, a fixed-price contract (like FFP or FP-EPA) might offer better cost control and value for the government. However, if the development involves significant unknowns or requires extensive testing and adaptation, CPFF might be deemed necessary.

What is the historical spending trend for CV-22 SKR JASS instrumentation and software, and how does this award compare?

The provided data only includes details for this specific delivery order ($13.3 million with an end date of August 2026). To assess historical spending trends, one would need access to a broader contract database or agency procurement records that track all awards related to 'CV-22 SKR JASS instrumentation and software' or similar components over previous fiscal years. Without this historical context, it is impossible to determine if this $13.3 million award represents an increase, decrease, or stable level of spending for this particular capability. Analyzing past awards, including their values, contract types, and competition levels, would be crucial for understanding the long-term investment in this system and identifying any significant shifts in procurement strategy or cost.

What are the potential risks associated with the contractor, Raytheon Company, in executing this contract?

Raytheon Company is a major defense contractor with extensive experience in aerospace and defense systems, including complex aircraft components and software. Generally, their track record is strong in delivering sophisticated technologies. However, potential risks, common to large contractors, could include performance issues related to schedule delays or technical challenges in integrating the JASS instrumentation and software with the CV-22 platform. Given the CPFF contract type and sole-source nature, risks related to cost control and potential for scope creep are also present, requiring diligent government oversight. Past performance reviews and any documented issues on similar contracts would provide a more granular risk assessment, but based solely on the provided data, the primary risks revolve around the contract structure rather than the contractor's inherent capability.

How does the geographic location of the contractor (Indiana) influence the contract's execution and cost?

The data indicates the contractor's location is Indiana ('sn': 'INDIANA'). While the specific facility location within Indiana isn't provided, it suggests that the work will be performed there. For a sole-source contract of this nature, the contractor's location primarily influences indirect costs (overhead) and potentially labor rates, which are factored into the overall cost. Indiana has a presence in the aerospace and defense manufacturing sector. The cost implications would depend on whether Indiana's labor market and overhead structures are more or less expensive than alternative locations Raytheon might have utilized. However, for a specialized, sole-source award, the government's primary concern is likely the contractor's capability rather than optimizing for the lowest cost location, assuming Raytheon's Indiana facility is the most suitable or only option.

Industry Classification

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

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

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: $13,349,745

Exercised Options: $13,349,745

Current Obligation: $13,349,745

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $1,304,866

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