Raytheon Company awarded $30.3M contract for DSMAC Phase II by the Department of the Navy

Contract Overview

Contract Amount: $30,301,795 ($30.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2023-08-01

End Date: 2026-01-31

Contract Duration: 914 days

Daily Burn Rate: $33.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: DSMAC PHASE II

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85734

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $30.3 million to RAYTHEON COMPANY for work described as: DSMAC PHASE II Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. The contract duration of 914 days suggests a significant project scope. 3. The cost-plus-fixed-fee pricing structure may incentivize cost overruns. 4. The contract is for aircraft parts, falling under the broader aerospace and defense sector. 5. Performance is located in Arizona, potentially impacting local workforce and economy. 6. No small business set-aside was indicated for this procurement.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without more detailed cost breakdowns or comparisons to similar sole-source procurements for aircraft parts. The cost-plus-fixed-fee (CPFF) structure, while common for R&D or uncertain scope projects, carries inherent risks of cost escalation. The fixed fee component provides some predictability for the contractor's profit, but the overall cost to the government is variable. Further analysis would require understanding the specific deliverables and the government's cost estimates.

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 approach is typically used when only one vendor possesses the necessary capabilities, technology, or when urgency dictates a direct award. The lack of competition means that the government did not benefit from the price discovery mechanisms that open competition provides, potentially leading to higher costs than if multiple bids were solicited.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive bidding. Without competing offers, there is less pressure on the contractor to offer the most cost-effective solution.

Public Impact

The Department of the Navy benefits from the acquisition of critical aircraft parts for its operations. The contract supports advanced manufacturing and technology development within the aerospace sector. The geographic impact is concentrated in Arizona, where the contractor is located. The contract is likely to support a specialized workforce in aerospace engineering and manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost-plus-fixed-fee structure can lead to cost overruns.
Lack of transparency in sole-source justifications requires scrutiny.
Potential for contractor to leverage unique position for favorable terms.

Positive Signals

Award to a known entity (Raytheon) suggests established capability.
Contract supports critical defense needs for the Navy.
Fixed fee provides some level of profit predictability for the contractor.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts. The North American Industry Classification System (NAICS) code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' indicates a specialized segment of this industry. Spending in this sector is substantial, driven by government defense procurement. Comparable spending benchmarks would involve analyzing other contracts for similar aircraft components awarded by the Department of Defense or other military branches.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it appear to involve significant subcontracting opportunities for small businesses based on the information provided. This suggests that the primary contractor, Raytheon Company, will likely perform the majority of the work. The absence of small business participation could limit opportunities for smaller firms within the aerospace supply chain for this specific procurement.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures would be tied to the contract's performance metrics and deliverables. Transparency may be limited due to the sole-source nature of the award, though contract details and performance reports are typically available through federal procurement databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Aircraft Procurement
Naval Aviation Support Contracts
Aerospace Component Manufacturing
Sole-Source Defense Contracts

Risk Flags

Sole-source award limits competition.
Cost-plus-fixed-fee pricing structure carries cost overrun risk.
Lack of public detail on specific deliverables.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.3 million to RAYTHEON COMPANY. DSMAC PHASE II

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 $30.3 million.

What is the period of performance?

Start: 2023-08-01. End: 2026-01-31.

What specific aircraft systems or platforms does the DSMAC Phase II contract support?

The provided data does not specify the exact aircraft systems or platforms that the DSMAC Phase II contract supports. DSMAC typically refers to the Defense Microelectronics Activity, suggesting the contract may involve microelectronic components or related services for various defense aircraft. To determine the specific platforms, one would need to consult the detailed contract award documents or the Department of the Navy's program descriptions. These components are often critical for avionics, control systems, or other advanced functionalities on military aircraft, implying a broad potential application across different naval aviation assets.

What is the historical spending pattern for DSMAC-related contracts with Raytheon Company?

Historical spending patterns for DSMAC-related contracts with Raytheon Company are not detailed in the provided data. To assess this, a comprehensive review of federal procurement databases (like FPDS or USAspending) would be necessary. This would involve searching for all contracts awarded to Raytheon Company under the DSMAC designation or related NAICS codes over several fiscal years. Analyzing this historical data would reveal trends in contract values, types (e.g., R&D, production, services), and the frequency of awards, providing context for the current $30.3 million contract and identifying any significant shifts in spending or program focus.

What are the key performance indicators (KPIs) for this contract, and how is performance being measured?

The provided data does not specify the key performance indicators (KPIs) or the methods used to measure performance for the DSMAC Phase II contract. Typically, for contracts involving aircraft parts or manufacturing, KPIs might include on-time delivery rates, quality defect rates, adherence to technical specifications, and cost control. The Department of the Navy's contracting officers and technical representatives would be responsible for monitoring Raytheon's performance against these metrics, which are usually detailed in the contract's statement of work or performance clauses. Regular performance reviews and acceptance of deliverables would form the basis of oversight.

What justification was provided for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED,' implying a sole-source justification was used. Common justifications for sole-source awards include the unique capability of a single contractor, urgent and compelling needs where competition is not feasible, or when the contract is a follow-on to a previously competed effort where only one source can provide the necessary services or supplies. Specific details of the justification would be found in the contract award documentation, such as a Justification and Approval (J&A) document, which is typically required for sole-source procurements exceeding certain value thresholds.

How does the $30.3 million contract value compare to other similar aircraft parts procurements by the Navy?

Comparing the $30.3 million contract value for DSMAC Phase II to other similar aircraft parts procurements by the Navy requires access to broader contract data. This specific award amount is moderate within the context of large defense procurements. To establish a benchmark, one would need to analyze recent Navy contracts for aircraft components, particularly those under NAICS code 336413 or similar classifications. Factors such as the complexity of the parts, the quantity ordered, and the specific technological requirements would influence comparability. Without this comparative data, it's difficult to definitively state whether $30.3 million represents a high, low, or average value for such procurements.

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: Rockwell Collins Australia PTY Limited

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: $30,301,795

Exercised Options: $30,301,795

Current Obligation: $30,301,795

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $480,351

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