Navy Awards Raytheon $457M for Fire Control Systems, Sole-Sourced

Contract Overview

Contract Amount: $45,732,385 ($45.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2005-02-10

End Date: 2008-08-30

Contract Duration: 1,297 days

Daily Burn Rate: $35.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200505!046948!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002405C5101 !A!N! !N! ! !20050210!20071231!039192216!045591104!001339159!N!RAYTHEON COMPANY !1501 72ND ST N !SAINT PETERSBU !FL!33710!63000!103!12!SAINT PETERSBURG !PINELLAS !FLORIDA !+000031980833!N!N!000031980833!1265!FIRE CONTROL TRANSMITTING & RECEIVING EQ !A5 !WEAPONS !582 !CEC !334511!E! !3! ! ! ! ! !20200930!B!A! !A! !D!N!J!1!001!N!1A!A!Y!F! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! !Y!1724!N00024!0001! !

Place of Performance

Location: SAINT PETERSBURG, PINELLAS County, FLORIDA, 33710

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $45.7 million to RAYTHEON COMPANY for work described as: 200505!046948!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002405C5101 !A!N! !N! ! !20050210!20071231!039192216!045591104!001339159!N!RAYTHEON COMPANY !1501 72ND ST N !SAINT PETERSBU !FL!33710!63000!103!12!SAINT PETERSBURG !PINE… Key points: 1. Contract awarded to Raytheon Company for fire control transmitting and receiving equipment. 2. Significant award of $457.3 million for a duration of 1297 days. 3. Sole-source award raises questions about competition and potential cost savings. 4. The sector is IT/Defense, with a focus on weapons systems.

Value Assessment

Rating: fair

The contract value of $457.3 million for fire control systems appears substantial. Benchmarking against similar sole-source defense contracts is difficult without more data on system complexity and specific components.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This method limits price discovery and may result in higher costs for taxpayers compared to a competitive process.

Taxpayer Impact: The lack of competition for this $457.3 million contract means taxpayers may not be receiving the best possible price.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. The Department of Defense continues to rely on sole-source contracts for critical systems. Raytheon Company, a major defense contractor, benefits from this direct award. The fire control systems are essential for naval operations, impacting national security.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for overpricing
Limited transparency in pricing

Positive Signals

Award to a known defense contractor
Essential defense system procurement

Sector Analysis

This contract falls within the Defense sector, specifically for IT and weapons systems manufacturing. Defense spending often involves complex, high-value contracts where sole-sourcing can occur due to specialized needs.

Small Business Impact

The contract was awarded to Raytheon Company, a large prime contractor. There is no indication of small business participation in this specific award, which is common for large sole-source defense contracts.

Oversight & Accountability

Oversight is crucial for sole-source contracts to ensure fair pricing and prevent waste. The Department of Defense's procurement processes should include mechanisms to justify the lack of competition and validate costs.

Related Government Programs

Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for cost overruns
Limited transparency in pricing
High contract value

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $45.7 million to RAYTHEON COMPANY. 200505!046948!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002405C5101 !A!N! !N! ! !20050210!20071231!039192216!045591104!001339159!N!RAYTHEON COMPANY !1501 72ND ST N !SAINT PETERSBU !FL!33710!63000!103!12!SAINT PETERSBURG !PINELLAS !FLORIDA !+000031980833!N!N!000031980833!1265!FIRE CONTROL TRANSMITTING & RECEIVING EQ !A5 !WEAPONS !582 !CEC !334511!E! !3! ! ! ! ! !202

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 $45.7 million.

What is the period of performance?

Start: 2005-02-10. End: 2008-08-30.

What specific factors justified the sole-source award for these fire control systems, and were alternatives considered?

Justification for sole-source awards typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. The Department of Defense must document these reasons. Without this documentation, it's difficult to assess if alternatives were truly unavailable or if the justification was robust enough to warrant bypassing competition.

How does the per-unit cost of these fire control systems compare to similar systems procured competitively?

Direct comparison is challenging without detailed specifications and market data for comparable systems. However, sole-source contracts inherently lack the price pressure of competition, suggesting a potential for higher per-unit costs. A thorough cost analysis by the government, including should-cost and will-cost estimates, would be necessary to determine if the price is reasonable.

What is the long-term strategy for ensuring competitive procurement for future fire control system needs?

The long-term strategy should focus on fostering competition by encouraging new entrants, developing modular system designs that allow for component-level competition, and conducting market research to identify potential alternative sources. Regular reviews of sole-source justifications are also needed to ensure they remain valid and to transition to competitive strategies where feasible.

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: 1501 72ND ST N, SAINT PETERSBU, FL

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline