DoD Awards Raytheon $91.7M for Navigation Systems, Lacking Competition
Contract Overview
Contract Amount: $91,676,539 ($91.7M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2024-09-27
End Date: 2027-12-31
Contract Duration: 1,190 days
Daily Burn Rate: $77.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: IT
Official Description: MBX NRE
Place of Performance
Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245
Plain-Language Summary
Department of Defense obligated $91.7 million to RAYTHEON COMPANY for work described as: MBX NRE Key points: 1. Significant contract value of $91.7 million awarded to Raytheon. 2. Lack of competition raises concerns about potential overpricing and value. 3. Contract is for critical navigation systems, essential for naval operations. 4. Sector is IT/Defense, with high potential for cost overruns.
Value Assessment
Rating: questionable
The contract's cost-plus incentive fee structure, combined with a lack of competition, makes a definitive pricing assessment difficult. Without competitive bids, it's hard to benchmark against market rates.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and may lead to higher costs for taxpayers.
Taxpayer Impact: The absence of competition suggests taxpayers may be paying a premium for these navigation systems.
Public Impact
Taxpayers may be overpaying due to the lack of competitive bidding. Dependence on a single contractor for critical defense systems poses a long-term risk. The advanced nature of the systems could lead to unforeseen cost increases. Ensuring the effectiveness and reliability of these systems is paramount for national security.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of Competition
- Cost-Plus Contract Type
- Potential for Cost Overruns
Positive Signals
- Critical Defense Technology
- Long-Term Contract Duration
Sector Analysis
This contract falls within the IT/Defense sector, specifically for navigation systems. Spending in this area is often high due to technological complexity and national security requirements. Benchmarks are difficult without competitive data.
Small Business Impact
There is no indication of small business participation in this contract award. The focus appears to be on a large, established defense contractor.
Oversight & Accountability
The 'NOT COMPETED' status warrants further oversight to ensure the justification for a sole-source award is robust and that pricing is scrutinized rigorously.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award lacks competitive pressure.
- Cost-plus contract type can lead to cost overruns.
- Potential for inflated pricing due to lack of competition.
- Dependency on a single contractor for critical systems.
- Limited transparency on pricing justification.
Tags
search-detection-navigation-guidance-aer, department-of-defense, ca, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $91.7 million to RAYTHEON COMPANY. MBX NRE
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 $91.7 million.
What is the period of performance?
Start: 2024-09-27. End: 2027-12-31.
What is the justification for awarding this contract on a sole-source basis, and how will the government ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. The government will likely rely on detailed cost analysis, independent government cost estimates, and potentially negotiation with the contractor to ensure fair and reasonable pricing, though the absence of competition inherently limits the government's leverage.
What are the potential risks associated with a sole-source, cost-plus incentive fee contract for critical navigation systems?
Risks include potential cost overruns as the contractor is incentivized to incur costs, limited innovation due to lack of competitive pressure, and a higher likelihood of paying above market rates. For critical systems, a sole-source award also creates a dependency that could be exploited or become a vulnerability if the contractor faces issues.
How will the effectiveness and performance of these navigation systems be independently verified given the lack of competitive benchmarks?
Effectiveness will be verified through rigorous testing, validation, and acceptance procedures outlined in the contract. Performance metrics and milestones will be closely monitored by the Department of the Navy. Independent verification may involve third-party assessments or government-run testing facilities to ensure the systems meet all specified requirements and operational needs.
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: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0001923R0126
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
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: $192,018,389
Exercised Options: $192,018,389
Current Obligation: $91,676,539
Subaward Activity
Number of Subawards: 19
Total Subaward Amount: $11,119,881
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2024-09-27
Current End Date: 2027-12-31
Potential End Date: 2027-12-31 00:00:00
Last Modified: 2025-11-20
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