Navy Awards Raytheon $39.3M for Common Software Corrections, Lacking Competition

Contract Overview

Contract Amount: $39,280,602 ($39.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2024-09-24

End Date: 2027-05-31

Contract Duration: 979 days

Daily Burn Rate: $40.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: MV/CMV/CV COMMON SOFTWARE CORRECTIONS

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46240

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $39.3 million to RAYTHEON COMPANY for work described as: MV/CMV/CV COMMON SOFTWARE CORRECTIONS Key points: 1. Significant contract value of $39.3 million for software corrections. 2. Sole-source award to Raytheon Company raises competition concerns. 3. Potential for inflated costs due to lack of competitive bidding. 4. The contract falls under 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector.

Value Assessment

Rating: questionable

The contract is a Cost Plus Fixed Fee type, which can lead to cost overruns if not managed tightly. Without competitive benchmarks, assessing the value for money is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Raytheon Company. This limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The lack of competition may result in the government paying more than necessary for these software corrections, impacting taxpayer funds.

Public Impact

Taxpayers may be overpaying for essential software maintenance due to a lack of competitive bidding. The reliance on a single vendor for critical software corrections could pose long-term supply chain risks. Transparency in pricing and performance is reduced in sole-source contracts, making public scrutiny harder.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

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

Positive Signals

Essential software maintenance
Long-term contract duration

Sector Analysis

This contract is in the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector. Spending in this area is critical for defense readiness, but competitive sourcing is vital to ensure cost-effectiveness.

Small Business Impact

There is no indication that small businesses were involved in this sole-source award, missing an opportunity to support small business participation in defense contracting.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure costs are reasonable and performance meets requirements. The Department of the Navy must justify the lack of competition.

Related Government Programs

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

Risk Flags

Lack of competition
Cost-plus contract type
Potential for cost overruns
Limited transparency
No small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.3 million to RAYTHEON COMPANY. MV/CMV/CV COMMON SOFTWARE CORRECTIONS

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 $39.3 million.

What is the period of performance?

Start: 2024-09-24. End: 2027-05-31.

What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one vendor can fulfill the requirement. The Department of the Navy should have conducted a price analysis, potentially using historical data or independent cost estimates, to ensure the fixed fee and cost reimbursement are fair and reasonable despite the lack of competition.

What are the potential risks associated with relying on a single vendor for critical software corrections over a nearly three-year period?

Risks include vendor lock-in, potential price increases in future contracts, and reduced innovation. If Raytheon faces financial difficulties or strategic shifts, it could disrupt the availability of essential software support. Furthermore, the government lacks leverage to negotiate better terms or explore alternative solutions.

How will the effectiveness and value for money of this Cost Plus Fixed Fee contract be measured and ensured, given the absence of competition?

Effectiveness will be measured against defined performance metrics and deliverables outlined in the contract. Value for money will be assessed through rigorous monitoring of costs against the fixed fee and by comparing actual expenditures to any pre-negotiated ceilings. Regular audits and performance reviews by the Navy are crucial to ensure accountability.

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

Solicitation ID: N0001923R0140

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: $44,492,517

Exercised Options: $39,280,602

Current Obligation: $39,280,602

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