Raytheon awarded $619.5M for fire control systems, with a 2001 start date and 2012 end date

Contract Overview

Contract Amount: $619,523,376 ($619.5M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2001-12-31

End Date: 2012-06-30

Contract Duration: 3,834 days

Daily Burn Rate: $161.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200205!020381!1700!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002402C5100 !A!N! !N! !20011231!20051231!001410539!001410539!001339159!N!RAYTHEON COMPANY !528 BOSTON POST RD !SUDBURY !MA!01776!68260!017!25!SUDBURY !MIDDLESEX !MASS !+000095743359!N!N!000000000000!1265!FIRE CONTROL TRANSMITTING & RECEIVING EQ !A3 !SHIPS !2SCY!DESTROYER DDG-51 !334511!E! !3! ! ! ! ! !99990909!B! ! !N!Z!B!N!J!2!002!N!5A!A!Y!A! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!Y! ! ! ! ! ! !0001!

Place of Performance

Location: SUDBURY, MIDDLESEX County, MASSACHUSETTS, 01776, UNITED STATES OF AMERICA

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $619.5 million to RAYTHEON COMPANY for work described as: 200205!020381!1700!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002402C5100 !A!N! !N! !20011231!20051231!001410539!001410539!001339159!N!RAYTHEON COMPANY !528 BOSTON POST RD !SUDBURY !MA!01776!68260!017!25!SUDBURY !MIDDLESEX !MASS !+000095743359!N!N!000000000000!1265!FIRE CONTROL TRANSMIT… Key points: 1. The contract's value of over $619 million represents a significant investment in naval defense capabilities. 2. Awarded as 'NOT COMPETED', this suggests potential limitations in market exploration and price discovery. 3. The long performance period of over 10 years indicates a sustained need for these specialized systems. 4. The specific product code '334511' points to a niche market within the broader defense sector. 5. The contract's focus on fire control systems highlights its critical role in naval combat readiness.

Value Assessment

Rating: fair

The total contract value of $619.5 million for fire control transmitting and receiving equipment is substantial. Without comparable contract data or detailed cost breakdowns, a precise value-for-money assessment is challenging. However, the 'NOT COMPETED' nature raises concerns about whether the government secured the best possible price. The duration of the contract (over 10 years) suggests a long-term need, but also a potential for cost overruns if not managed tightly. Benchmarking against similar systems for naval platforms would be necessary for a more definitive evaluation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as 'NOT COMPETED', indicating that a full and open competition was not conducted. This typically occurs when only one source is capable of meeting the requirement, or in situations deemed urgent or necessary for national security. The lack of competition means that potential alternative suppliers were not considered, and the government did not benefit from the price reductions that can arise from a competitive bidding process.

Taxpayer Impact: The absence of competition means taxpayers may not have received the most cost-effective solution. Without multiple bids, there is less pressure on the contractor to offer the lowest possible price, potentially leading to higher overall expenditure.

Public Impact

Naval forces, specifically those operating Destroyer DDG-51 class ships, are the primary beneficiaries of this contract. The contract delivers essential fire control transmitting and receiving equipment, crucial for the operational effectiveness of these vessels. The geographic impact is primarily within the United States, with the contractor, Raytheon Company, located in Sudbury, MA. The contract supports specialized manufacturing jobs within the defense industry, particularly in areas related to advanced electronics and systems integration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition could lead to higher prices for taxpayers.
Long contract duration may increase risk of cost escalation without strong oversight.
Sole-source award limits opportunities for small businesses to participate as prime contractors.

Positive Signals

Award to a known defense contractor (Raytheon) suggests a level of established capability.
Specific product code indicates a focused and potentially specialized requirement.
Contract supports critical naval defense systems, contributing to national security.

Sector Analysis

The contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector, a specialized area within the broader defense industrial base. This sector is characterized by high technological barriers to entry, significant R&D investment, and long product development cycles. The market is often dominated by a few large, established defense contractors. Comparable spending benchmarks would likely involve other naval combat system procurements, which can range from tens to hundreds of millions of dollars depending on system complexity and quantity.

Small Business Impact

This contract was not set aside for small businesses, and the prime contractor, Raytheon Company, is a large corporation. There is no explicit information provided regarding subcontracting plans or goals for small businesses. The sole-source nature of the award further limits the direct opportunities for small businesses to participate as prime contractors on this specific contract. However, Raytheon may engage small businesses as subcontractors for specific components or services, but this is not detailed in the provided data.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. Accountability measures would include adherence to the 'FIRM FIXED PRICE' contract type, which places the cost risk on the contractor. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Naval Combat Systems
Fire Control Systems
Defense Electronics Manufacturing
Shipboard Systems
Raytheon Company Contracts

Risk Flags

Sole-source award
Lack of competition
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $619.5 million to RAYTHEON COMPANY. 200205!020381!1700!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002402C5100 !A!N! !N! !20011231!20051231!001410539!001410539!001339159!N!RAYTHEON COMPANY !528 BOSTON POST RD !SUDBURY !MA!01776!68260!017!25!SUDBURY !MIDDLESEX !MASS !+000095743359!N!N!000000000000!1265!FIRE CONTROL TRANSMITTING & RECEIVING EQ !A3 !SHIPS !2SCY!DESTROYER DDG-51 !334511!E! !3! ! ! ! ! !99990909!B! ! !N!Z!B!N!J!2!002!N!5A!A!Y!A! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!Y! ! ! ! ! ! !0001!

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $619.5 million.

What is the period of performance?

Start: 2001-12-31. End: 2012-06-30.

What is the historical spending trend for fire control systems by the Naval Sea Systems Command?

Analyzing historical spending trends for fire control systems by the Naval Sea Systems Command (NAVSEA) requires access to comprehensive contract databases and procurement histories. While this specific contract (N0002402C5100) represents a significant outlay of over $619 million, understanding the broader trend involves examining similar awards over multiple fiscal years. Factors influencing spending include fleet modernization programs, technological advancements in threat detection and engagement, and geopolitical security requirements. Without specific historical data for this particular system type, it's difficult to ascertain if this award is an anomaly, part of a consistent procurement strategy, or indicative of increasing investment in naval defense capabilities. A detailed analysis would involve identifying all contracts for fire control systems, their values, durations, and the specific platforms they support, to identify patterns of growth, decline, or cyclical investment by NAVSEA.

How does the per-unit cost of this fire control system compare to similar systems on other naval platforms?

Determining the per-unit cost comparison for this fire control system is challenging without specific unit quantities and detailed cost breakdowns within the contract data. The total award of $619.5 million over a period of more than 10 years makes a simple division by the number of ships or systems difficult, especially if the contract covers development, integration, and sustainment rather than just unit production. To perform a meaningful comparison, one would need to identify the number of fire control systems procured under this contract and benchmark this against the per-unit cost of similar systems acquired for other naval platforms, such as aircraft carriers, submarines, or different classes of destroyers. Factors like system complexity, technological sophistication, and integration requirements significantly influence per-unit costs. The 'NOT COMPETED' status also raises questions about whether the price achieved is competitive with what might have been obtained through a bidding process.

What are the key performance metrics and success criteria for this fire control system contract?

The provided data does not explicitly detail the key performance metrics (KPMs) or success criteria for this fire control system contract. Typically, for defense systems, KPMs would revolve around reliability, availability, maintainability, and operational effectiveness. For a fire control system, this could include metrics such as target acquisition time, accuracy of engagement, system uptime, mean time between failures (MTBF), and successful integration with other shipboard combat systems. The 'FIRM FIXED PRICE' contract type suggests that the contractor is incentivized to meet defined performance standards to achieve profitability. However, the specific thresholds and measurement methodologies would be outlined in the contract's Statement of Work (SOW) and performance specifications, which are not included here. Without these details, assessing the contractor's performance against defined success criteria is not possible.

What is Raytheon Company's track record with similar sole-source defense contracts?

Raytheon Company, now part of RTX, has a long and extensive history of securing defense contracts, many of which have been sole-source or non-competitively awarded due to the specialized nature of their offerings and their position as a prime defense contractor. The company is a major provider of advanced defense systems, including radar, missile systems, and command and control solutions, which often require unique technological capabilities. Analyzing Raytheon's track record with similar sole-source contracts would involve reviewing their portfolio of awards for complex defense systems, particularly those involving fire control, radar, and integrated combat systems. This would likely reveal a pattern of securing significant, long-term contracts where competition is limited by technical expertise, existing platform integration, or national security considerations. Evaluating the performance and cost-effectiveness of these past sole-source awards would provide context for this specific contract.

What are the potential risks associated with a sole-source award for critical naval defense equipment?

Sole-source awards for critical naval defense equipment, such as this fire control system contract, carry several potential risks. Firstly, the primary risk is a lack of price competition, which can lead to the government paying a premium compared to a competitively bid contract. This can result in inefficient use of taxpayer funds. Secondly, there's a risk of reduced innovation and complacency from the contractor, as the absence of competitive pressure may lessen the incentive to improve efficiency or develop more cost-effective solutions. Thirdly, sole-source awards can create vendor lock-in, making it difficult and costly to switch providers or integrate alternative technologies in the future. Finally, without the scrutiny of multiple bidders, there's a heightened need for robust government oversight to ensure the contractor meets all performance requirements and manages costs effectively, as the government has fewer external benchmarks for comparison.

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: FIRE CONTROL EQPT.

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 528 BOSTON POST RD, SUDBURY, MA, 01776

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline