Raytheon Company awarded $14.9M for AN/SPS-49 kits, a sole-source contract for LHD-8

Contract Overview

Contract Amount: $14,925,000 ($14.9M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2002-12-30

End Date: 2007-05-30

Contract Duration: 1,612 days

Daily Burn Rate: $9.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AN/SPS-49 KIT FOR LHD-8

Place of Performance

Location: SUDBURY, MIDDLESEX County, MASSACHUSETTS, 01776

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $14.9 million to RAYTHEON COMPANY for work described as: AN/SPS-49 KIT FOR LHD-8 Key points: 1. Contract awarded for specialized radar kits, indicating a need for specific equipment upgrades. 2. Sole-source award suggests limited market availability or a strategic decision to use a specific vendor. 3. The contract duration of over 4 years points to a significant integration or deployment timeline. 4. Fixed-price contract type aims to control costs, but the sole-source nature may limit price negotiation. 5. Awarded by the Department of the Navy, highlighting defense procurement for naval assets. 6. The contract value of $14.9M is substantial for a specific equipment kit.

Value Assessment

Rating: fair

Benchmarking the value of this specific AN/SPS-49 kit is challenging without comparable sole-source awards for similar systems. The firm fixed-price structure provides cost certainty for the government, but the absence of competition limits the ability to assess if the price reflects the best possible value. The contract's value appears reasonable for a specialized defense system, but a competitive process would offer greater assurance of optimal pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Raytheon Company, was solicited. This approach is typically used when only one responsible source is available or when there is a compelling justification for excluding competition. The lack of competition means there was no opportunity for other companies to bid, potentially limiting price discovery and innovation.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as the government cannot leverage competitive bidding to secure the lowest possible cost.

Public Impact

Naval forces benefit from upgraded radar capabilities on LHD-8, enhancing operational effectiveness. The contract supports the maintenance and modernization of critical naval assets. The geographic impact is primarily on naval bases and deployment areas where LHD-8 operates. Workforce implications may include specialized technicians for installation and maintenance of the radar systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially impacting long-term cost-effectiveness.
Lack of transparency in the justification for sole-sourcing could obscure potential alternatives.
Dependence on a single supplier for critical components can create supply chain risks.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award to an established defense contractor suggests a degree of reliability in delivery.
Contract addresses a specific, identified need for naval radar system enhancement.

Sector Analysis

The defense electronics sector is characterized by high research and development costs, long product lifecycles, and significant government procurement. Companies like Raytheon operate within a market driven by technological advancement and national security requirements. This contract for radar kits fits within the broader category of defense systems manufacturing, a substantial segment of the aerospace and defense industry. Comparable spending benchmarks would typically involve other sole-source or competitively awarded contracts for similar electronic warfare or radar systems for naval platforms.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss' field is also false, suggesting no specific subcontracting goals for small businesses were mandated within this award. The prime contractor, Raytheon Company, is a large defense firm, and the nature of the specialized equipment may not lend itself to extensive subcontracting opportunities for small businesses.

Oversight & Accountability

Oversight for this contract would fall under the Department of the Navy's contracting and program management offices. As a sole-source award, the justification for this procurement method would be subject to review by relevant oversight bodies within the Department of Defense. Transparency regarding the specific reasons for the sole-source designation and the pricing negotiation process would be key areas for accountability assessment. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Radar Systems Procurement
Defense Electronics Manufacturing
Shipboard Combat Systems
AN/SPS Radar Family

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns due to lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.9 million to RAYTHEON COMPANY. AN/SPS-49 KIT FOR LHD-8

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 $14.9 million.

What is the period of performance?

Start: 2002-12-30. End: 2007-05-30.

What is the specific justification provided by the Department of the Navy for awarding this contract on a sole-source basis to Raytheon Company?

The provided data does not explicitly state the justification for the sole-source award. Typically, sole-source procurements are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source is capable of providing the required supplies or services, or when there is a compelling urgency. For this AN/SPS-49 kit for LHD-8, the justification might relate to unique technical requirements, proprietary technology held by Raytheon, or a lack of viable alternative suppliers for this specific radar system configuration. A thorough review of the contract's Justification and Approval (J&A) document would be necessary to ascertain the precise rationale.

How does the $14.9 million contract value compare to historical spending on similar AN/SPS-49 kits or related radar systems?

Without access to historical spending data for this specific AN/SPS-49 kit or directly comparable radar systems, a precise comparison is difficult. However, $14.9 million for a specialized defense electronic system, especially when procured sole-source, is a significant investment. The contract duration of over 1600 days (approximately 4.4 years) suggests this value encompasses not just the hardware but potentially integration, testing, and initial support. If this award represents a sole-source procurement for a system that could have been competitively bid, the value might be higher than if competition were present. Further analysis would require benchmarking against similar sole-source awards or competitive bids for radar systems of comparable complexity and function within the naval domain.

What are the potential risks associated with a sole-source award for critical defense equipment like the AN/SPS-49 kit?

Sole-source awards for critical defense equipment carry several potential risks. Firstly, the absence of competition can lead to inflated prices, as the government lacks the leverage of multiple bids to drive down costs. Secondly, it can reduce the incentive for the sole provider to innovate or improve efficiency, as there is no competitive pressure. Thirdly, it creates a dependency on a single supplier, which can pose supply chain risks if the contractor experiences production issues, financial instability, or changes its business strategy. Finally, it can limit the government's options if the awarded system becomes obsolete or requires significant upgrades, as switching providers might be technically complex and costly.

What is the expected performance impact or benefit of the AN/SPS-49 kit for the LHD-8 (Wasp-class amphibious assault ship)?

The AN/SPS-49 is a long-range, two-dimensional air search radar system. Its primary function is to detect and track airborne targets, providing crucial situational awareness for naval vessels. For the LHD-8, an amphibious assault ship, this radar system is vital for air defense, enabling the ship and its embarked air wing to identify and respond to potential threats. The installation or upgrade of the AN/SPS-49 kit is expected to enhance the ship's ability to detect aircraft, missiles, and other aerial threats at significant distances, thereby improving its survivability and operational effectiveness in complex threat environments. This directly contributes to the ship's mission of projecting power and supporting amphibious operations.

What is Raytheon Company's track record with the AN/SPS-49 system and similar naval radar procurements?

Raytheon Company, through its predecessor companies like Hughes Aircraft, has a long history with the AN/SPS-49 radar system. It has been a primary provider and integrator of this system for various naval platforms for decades. Raytheon has extensive experience in developing, manufacturing, and supporting complex radar and electronic warfare systems for the U.S. Navy and allied nations. Their track record with the AN/SPS-49 specifically suggests a deep understanding of its technical requirements and operational nuances. This extensive experience positions them as a likely incumbent and potentially the only qualified source for specific upgrades or kits related to this established system, which often underpins sole-source justifications.

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 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, 05

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: $14,925,000

Exercised Options: $14,925,000

Current Obligation: $14,925,000

Contract Characteristics

Cost or Pricing Data: YES

Timeline