DoD awards Raytheon $31.1M for Other Communication and Energy Wire Manufacturing, a sole-source contract

Contract Overview

Contract Amount: $31,155,461 ($31.2M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2004-05-07

End Date: 2007-03-31

Contract Duration: 1,058 days

Daily Burn Rate: $29.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92123

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $31.2 million to RAYTHEON COMPANY for work described as: Key points: 1. Contract awarded to Raytheon Company for specialized wire manufacturing. 2. Significant contract value of $31.1 million over its duration. 3. Sole-source award raises questions about competition and potential cost efficiencies. 4. The sector involves manufacturing for defense communication and energy needs.

Value Assessment

Rating: questionable

The contract type is Cost Plus Award Fee, which can lead to higher costs if not managed carefully. Without competitive bidding, it's difficult to benchmark pricing against similar contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for the government compared to a competitive process.

Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for these specialized wire manufacturing services.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. The Department of Defense relies on Raytheon for critical communication and energy wire components. The long duration of the contract (over 3 years) suggests a sustained need for these specialized products.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost Plus Award Fee contract type
Lack of transparency in pricing

Positive Signals

Awarded to a known defense contractor
Addresses a specific defense need

Sector Analysis

This contract falls within the manufacturing sector, specifically producing components for defense communication and energy systems. Benchmarks for similar specialized wire manufacturing contracts are difficult to ascertain due to the sole-source nature of this award.

Small Business Impact

There is no indication that small businesses were involved in this sole-source award, suggesting a missed opportunity for small business participation.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny to ensure fair pricing and that the government is receiving best value. Oversight is needed to monitor cost-plus aspects.

Related Government Programs

Other Communication and Energy Wire Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Sole-source award limits competition.
Cost Plus Award Fee can lead to cost overruns.
Lack of small business participation.
Potential for price gouging without competition.
Dependency on a single supplier.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.2 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 $31.2 million.

What is the period of performance?

Start: 2004-05-07. End: 2007-03-31.

What was the justification for awarding this contract on a sole-source basis?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Without further details, it's impossible to confirm the specific rationale, but it's crucial for ensuring the government isn't missing out on competitive pricing or alternative solutions.

How does the Cost Plus Award Fee structure impact the final cost to taxpayers?

The Cost Plus Award Fee (CPAF) structure allows the contractor to recover allowable costs plus a fee that is composed of a base fee plus an award amount. The award amount is based on meeting or exceeding performance targets. While intended to incentivize performance, CPAF contracts can lead to higher costs if targets are not well-defined or if oversight is insufficient, potentially increasing the final price paid by taxpayers.

What is the potential risk of relying on a single supplier for these critical components?

Relying on a single supplier, especially for critical defense components, poses risks such as supply chain disruptions, price escalation, and a lack of innovation. If Raytheon faces production issues or decides to increase prices significantly, the Department of Defense may have limited alternatives, potentially impacting readiness and increasing long-term costs.

Industry Classification

NAICS: Manufacturing › Other Electrical Equipment and Component Manufacturing › Other Communication and Energy Wire Manufacturing

Product/Service Code: FIRE CONTROL EQPT.

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Contractor Details

Address: 8680 BALBOA AVE, SAN DIEGO, CA, 92123

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline