DoD's $26.8M Engineering Services Contract with Raytheon: A 14-Year Sole-Source Award

Contract Overview

Contract Amount: $26,839,078 ($26.8M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2003-06-20

End Date: 2017-05-05

Contract Duration: 5,068 days

Daily Burn Rate: $5.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Place of Performance

Location: MARLBOROUGH, MIDDLESEX County, MASSACHUSETTS, 01752

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $26.8 million to RAYTHEON COMPANY for work described as: Key points: 1. Significant long-term award to a major defense contractor. 2. Lack of competition raises questions about price discovery. 3. Potential for cost overruns given the Cost Plus Fixed Fee structure. 4. Engineering services sector is critical for defense capabilities.

Value Assessment

Rating: questionable

The contract's duration and sole-source nature make direct pricing comparisons difficult. Without competitive bidding, it's hard to ascertain if Raytheon's pricing reflects market value or if taxpayers received the best possible deal.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This significantly limits price discovery and may lead to higher costs for the government.

Taxpayer Impact: The absence of competition over a 14-year period likely resulted in higher taxpayer costs than if the contract had been competitively bid.

Public Impact

Long-term reliance on a single contractor for critical engineering services. Potential for reduced innovation due to lack of competitive pressure. Taxpayer funds committed over an extended period without guaranteed best value.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost Plus Fixed Fee contract type
Long contract duration (14 years)
No indication of small business participation

Positive Signals

Award to a well-established defense contractor
Provided essential engineering services

Sector Analysis

This contract falls within the engineering services sector, which is vital for the Department of Defense's research, development, and sustainment activities. Spending in this sector is often characterized by long-term relationships and specialized expertise.

Small Business Impact

The data indicates this contract was not awarded to small businesses (sb: false). There is no information provided on subcontracting opportunities for small businesses.

Oversight & Accountability

The long duration and sole-source nature of this contract warrant scrutiny regarding oversight. Regular performance reviews and cost audits would be crucial to ensure accountability and prevent potential waste.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competition
Potential for cost overruns
Extended contract duration
Limited transparency on justification for sole-source
No small business participation noted

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.8 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 $26.8 million.

What is the period of performance?

Start: 2003-06-20. End: 2017-05-05.

What was the justification for the sole-source award, and were alternatives considered?

The justification for a sole-source award is critical for understanding the necessity of bypassing competition. Agencies typically require detailed documentation demonstrating why only one source can meet the requirement, such as unique capabilities or urgent needs. Without this information, it's difficult to assess if the government truly received the best value or if competitive processes were overlooked.

How were cost controls and profit margins managed under the Cost Plus Fixed Fee structure over 14 years?

Cost Plus Fixed Fee contracts can incentivize contractors to increase costs to maximize their fixed fee profit. Over a 14-year period, robust oversight mechanisms, including detailed cost audits and performance metrics, would be essential to ensure Raytheon managed expenses effectively and that the fixed fee remained reasonable relative to the services provided and market conditions.

What was the impact of this long-term sole-source award on technological advancement and innovation within the DoD?

Sole-source contracts, especially over extended periods, can potentially stifle innovation by limiting exposure to new technologies and approaches from competing firms. While Raytheon is a major innovator, the lack of competitive pressure might have reduced the impetus for exploring alternative solutions or adopting cutting-edge advancements that other companies could have offered.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

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

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