DoD awards Raytheon $10.6M for Engineering Services, a sole-source contract spanning 7 years

Contract Overview

Contract Amount: $10,587,853 ($10.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2006-04-27

End Date: 2013-03-03

Contract Duration: 2,502 days

Daily Burn Rate: $4.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Place of Performance

Location: PORTSMOUTH, NEWPORT County, RHODE ISLAND, 02871

State: Rhode Island Government Spending

Plain-Language Summary

Department of Defense obligated $10.6 million to RAYTHEON COMPANY for work described as: Key points: 1. Significant contract value of $10.6 million awarded to a major defense contractor. 2. Sole-source award raises questions about competition and potential price inflation. 3. Long contract duration of 7 years suggests a sustained need for these services. 4. Engineering services are critical for defense operations, indicating a high-priority area.

Value Assessment

Rating: questionable

The contract value of $10.6 million for engineering services over 7 years is difficult to benchmark without specific service details. However, sole-source awards often lack competitive pressure, potentially leading to higher pricing than if multiple bids were solicited.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning competition was not sought. This method can be justified for specialized services but limits price discovery and potentially increases costs for taxpayers.

Taxpayer Impact: The lack of competition in this sole-source award may result in taxpayers paying more than necessary for the engineering services provided.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. The long-term nature of the contract could lock in potentially inflated costs. Lack of transparency in sole-source awards hinders public understanding of defense spending.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Long contract duration

Positive Signals

Critical engineering services for defense

Sector Analysis

This contract falls within the engineering services sector, which is vital for the Department of Defense's operational capabilities. Spending in this area is often substantial, but competitive bidding is crucial to ensure value for money.

Small Business Impact

This contract was awarded to Raytheon Company, a large prime contractor. There is no indication of small business participation or subcontracting in the provided data.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny to ensure the Department of Defense obtained fair pricing and that the services were essential and appropriately justified. Oversight should focus on the justification for not competing the award.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Sole-source award limits competition.
Potential for inflated pricing due to lack of competition.
Long contract duration may lock in unfavorable terms.
Cost-plus-fixed-fee structure shifts cost risk to the government.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.6 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 $10.6 million.

What is the period of performance?

Start: 2006-04-27. End: 2013-03-03.

What specific engineering services were procured, and what was the justification for a sole-source award?

The data indicates 'Engineering Services' but lacks specificity. A sole-source award typically requires a strong justification, such as unique capabilities, urgent need, or lack of other responsible sources. Without this detail, it's difficult to assess the necessity and fairness of the procurement method.

How does the cost-plus-fixed-fee structure impact the overall value and risk for the government?

A Cost Plus Fixed Fee (CPFF) contract allows the contractor to recover all allowable costs plus a fixed fee. While it incentivizes the contractor to control costs to protect their fee, it can still lead to higher overall spending if the base costs are not well-managed or if the fixed fee is excessive. The government bears the risk of cost overruns.

What is the potential long-term impact of this 7-year sole-source contract on future competition for similar services?

A long-term sole-source contract can stifle future competition by establishing a single provider and potentially creating barriers to entry for other firms. This can lead to a lack of innovation and sustained higher prices in the long run, as the incumbent faces less pressure to improve efficiency or offer competitive pricing.

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

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

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline