Raytheon Company awarded $49.5M for Search, Detection, Navigation, Guidance, Aeronautical, and Nautical Systems

Contract Overview

Contract Amount: $49,490,723 ($49.5M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2003-01-23

End Date: 2014-07-30

Contract Duration: 4,206 days

Daily Burn Rate: $11.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Place of Performance

Location: PORTSMOUTH, NEWPORT County, RHODE ISLAND, 02871

State: Rhode Island Government Spending

Plain-Language Summary

Department of Defense obligated $49.5 million to RAYTHEON COMPANY for work described as: Key points: 1. Value for money is difficult to assess due to limited competition and lack of detailed cost breakdowns. 2. The contract was awarded on a sole-source basis, raising concerns about price discovery and potential overpayment. 3. The long duration of the contract (over 11 years) suggests a need for ongoing support or development. 4. Performance context is limited as the specific systems and their criticality are not detailed. 5. This contract falls within the Defense sector, specifically supporting system manufacturing. 6. The firm fixed-price contract type aims to control costs, but the sole-source nature may negate this benefit.

Value Assessment

Rating: questionable

Benchmarking the value of this $49.5 million contract is challenging due to the sole-source award and the absence of detailed cost information. Without comparable contracts or market data for these specific systems, it's difficult to definitively assess if the pricing is competitive or represents good value for the taxpayer. The long contract duration could indicate significant investment or a sustained need, but without more context, it's hard to justify the expenditure solely on this basis.

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 is available or when there is a compelling justification for not seeking competition. The lack of multiple bidders means there was no competitive pressure to drive down prices or encourage innovative solutions. This limits the government's ability to ensure it is receiving the best possible value.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive bidding process to ensure the lowest possible price. This can result in less efficient use of public funds.

Public Impact

The primary beneficiaries are likely the Department of Defense, which receives critical navigation and guidance systems. The services delivered are related to the manufacturing and potentially the maintenance of specialized system components. The geographic impact is primarily centered around the contractor's facilities in Rhode Island, where the contract was awarded. Workforce implications would include employment opportunities for skilled labor in the defense manufacturing sector at Raytheon.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices.
Limited transparency on system specifics and performance metrics.
Long contract duration without clear performance benchmarks.
Sole-source award raises questions about necessity and alternatives.

Positive Signals

Firm fixed-price contract type aims to provide cost certainty.
Award to an established defense contractor suggests potential for reliable delivery.
Contract supports critical defense systems, indicating national security relevance.

Sector Analysis

This contract falls within the broader 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' industry. This sector is a critical component of the defense industrial base, characterized by high technological sophistication and significant government procurement. Market size is substantial, driven by defense spending globally. Comparable spending benchmarks are difficult to establish without knowing the specific systems, but defense electronics and systems manufacturing represent billions in annual federal outlays.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is also no information provided regarding subcontracting plans for small businesses. This suggests that the primary awardee, Raytheon Company, will likely perform the majority of the work, potentially limiting opportunities for small businesses within the supply chain for this specific contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver goods or services at a predetermined price. Transparency is limited due to the sole-source nature and the lack of publicly available detailed performance reports or cost breakdowns.

Related Government Programs

Defense Procurement
Navigation Systems
Guidance Systems
Aeronautical Systems Manufacturing
Nautical Systems Manufacturing
Raytheon Contracts

Risk Flags

Sole-source award
Lack of competition
Long contract duration
Limited performance data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $49.5 million to RAYTHEON COMPANY. See the official description on USAspending.

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 $49.5 million.

What is the period of performance?

Start: 2003-01-23. End: 2014-07-30.

What specific systems are being procured under this contract, and what is their operational significance?

The contract NAICS code 334511 covers 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing.' While the contract is with Raytheon Company, the specific systems procured are not detailed in the provided data. These systems are likely critical components for military platforms, potentially including radar, sonar, GPS receivers, inertial navigation systems, or flight control instruments. Their operational significance would be tied to the mission capabilities of the platforms they are integrated into, such as enhancing situational awareness, enabling precise navigation, or guiding munitions. Without more specific information, it's difficult to ascertain the exact impact on military operations.

How does the $49.5 million award compare to historical spending on similar systems by the Department of Defense?

Comparing the $49.5 million award to historical spending requires identifying specific system categories and looking at past contract awards. Given the broad NAICS code and the sole-source nature, direct historical comparisons are challenging. However, the Department of Defense consistently spends billions annually on navigation, guidance, and detection systems across various platforms (air, sea, land). This $49.5 million contract, spanning over 11 years, represents a significant but not exceptionally large sum in the context of overall defense procurement for such technologies. To provide a precise comparison, one would need to track Raytheon's or other contractors' awards for comparable systems over time.

What are the primary risks associated with a sole-source award of this magnitude and duration?

The primary risks associated with a sole-source award of this magnitude ($49.5 million) and duration (over 11 years) include potential cost overruns and reduced innovation. Without competition, the government lacks leverage to negotiate the best possible price, potentially leading to the contractor charging more than necessary. The long duration increases the risk of scope creep, changing requirements, or technological obsolescence without opportunities to re-evaluate the contract. Furthermore, reliance on a single source can create supply chain vulnerabilities if the contractor faces production issues or financial instability. There's also a risk that the government may not be receiving the most advanced or cost-effective solutions available on the market.

What is Raytheon Company's track record with the Department of Defense for similar contracts?

Raytheon Company (now RTX) has a long and extensive track record as a major defense contractor for the Department of Defense. They are a leading provider of a wide range of defense systems, including radar, missiles, sensors, and command and control systems, many of which fall under the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' category. Historically, Raytheon has been awarded numerous large-value contracts by the DoD. While specific performance metrics for individual contracts are not always public, their continued success in securing significant defense contracts suggests a generally positive track record in terms of capability and delivery, though like any large contractor, they may have faced scrutiny or performance issues on specific programs.

How does the firm fixed-price contract type mitigate risks for the government in this sole-source scenario?

The firm fixed-price (FFP) contract type is designed to shift cost risk from the government to the contractor. Under an FFP agreement, the contractor is obligated to complete the work for a predetermined price, regardless of their actual costs. This provides the government with cost certainty, as the total expenditure is known upfront. In this sole-source scenario, while the FFP structure offers predictability, it doesn't inherently guarantee value for money because the initial price was not determined through competition. However, it does protect the government from unexpected cost increases that might occur if the contractor experiences cost overruns during performance.

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: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: RTX Corp

Address: 1847 W MAIN RD, PORTSMOUTH, RI, 02871

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline