Raytheon Company awarded $20.9M contract for fire control transmitting and receiving equipment by the Department of the Navy

Contract Overview

Contract Amount: $20,931,964 ($20.9M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2005-12-13

End Date: 2009-03-17

Contract Duration: 1,190 days

Daily Burn Rate: $17.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200607!060686!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002406C5102 !A!N! !N! ! !20051213!20080131!039192216!045591104!001339159!N!RAYTHEON COMPANY !1501 72ND ST N !SAINT PETERSBU !FL!33710!63000!103!12!SAINT PETERSBURG !PINELLAS !FLORIDA !+000007152576!N!N!000000000000!1265!FIRE CONTROL TRANSMITTING & RECEIVING EQ !A5 !WEAPONS !582 !CEC !334511!E! !3! ! ! ! ! !99990909!B! ! !A! !D!N!J!1!001!N!1A!A!Y!F! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! !Y!1700!N00024!0001! !

Place of Performance

Location: SAINT PETERSBURG, PINELLAS County, FLORIDA, 33710

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $20.9 million to RAYTHEON COMPANY for work described as: 200607!060686!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002406C5102 !A!N! !N! ! !20051213!20080131!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 on a sole-source basis, raising questions about potential price overruns and lack of competitive pressure. 2. The contract's duration of nearly four years suggests a significant, long-term need for these specialized systems. 3. The specific product code (334511) indicates a focus on advanced electronic equipment manufacturing, aligning with defense industry trends. 4. The award to a single, established contractor may limit opportunities for smaller, innovative firms to enter the defense supply chain. 5. Performance context is limited, but the firm fixed-price structure suggests a defined scope of work and risk allocation.

Value Assessment

Rating: fair

The total award amount of $20.9 million for fire control transmitting and receiving equipment appears substantial. Without direct comparable contracts or detailed cost breakdowns, it is difficult to definitively benchmark the value for money. However, the absence of competition suggests that taxpayers may not have benefited from the most competitive pricing achievable through an open bidding process. Further analysis of the specific technical requirements and market rates for similar equipment would be necessary for a more precise valuation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that only one vendor, Raytheon Company, was solicited. This approach bypasses the typical competitive bidding process, which usually involves multiple companies vying for the contract. While sole-source awards can be justified in specific circumstances, such as when only one contractor possesses the necessary unique capabilities or technology, they inherently limit price discovery and potentially lead to higher costs for the government.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the best possible price, as there was no competition to drive down costs. This can result in a less efficient use of public funds compared to competitively awarded contracts.

Public Impact

The primary beneficiary of this contract is the Department of the Navy, which will receive critical fire control equipment. The services delivered include the manufacturing and provision of specialized transmitting and receiving equipment essential for naval operations. The geographic impact is primarily within Florida, where Raytheon's facility in Saint Petersburg is located, potentially supporting local jobs and the regional economy. Workforce implications include the potential for skilled manufacturing and engineering jobs at Raytheon and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and potentially increases costs for taxpayers.
Lack of transparency in the justification for sole-source procurement.
Limited insight into the specific technical requirements and performance metrics.
Potential for contractor lock-in due to specialized nature of the equipment.

Positive Signals

Award to an established defense contractor with a track record in similar systems.
Firm fixed-price contract structure provides cost certainty for the government.
Contract duration suggests a stable, long-term requirement being met.
Specific product code indicates alignment with critical defense capabilities.

Sector Analysis

This contract falls within the broader defense electronics manufacturing sector, specifically focusing on systems for naval warfare. The market for such specialized equipment is typically dominated by a few large, established defense contractors. Benchmarking spending in this niche requires comparison with other contracts for similar fire control systems or electronic warfare components, which are often high-value and subject to stringent security and performance requirements. The North American Industry Classification System (NAICS) code 334511, 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing,' encompasses this type of specialized electronic system production.

Small Business Impact

As this contract was awarded on a sole-source basis to Raytheon Company, there is no direct indication of small business set-aside provisions or subcontracting goals being applied in the initial award. Without a competitive solicitation, opportunities for small businesses to participate as prime contractors are eliminated. While Raytheon may engage small businesses as subcontractors, the lack of a formal set-aside or specific subcontracting plan within the sole-source justification limits transparency regarding small business inclusion and potential impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are typically embedded within the contract terms, including delivery schedules, quality standards, and payment milestones. Transparency is limited due to the sole-source nature of the award; the justification for this procurement method would be a key document for assessing oversight. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Naval Fire Control Systems
Defense Electronics Manufacturing
Weapons Systems Components
Department of Defense Procurement
Sole-Source Defense Contracts

Risk Flags

Sole-source justification requires scrutiny.
Potential for lack of competitive pricing.
Limited transparency on specific technical requirements.
Dependence on a single contractor.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.9 million to RAYTHEON COMPANY. 200607!060686!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002406C5102 !A!N! !N! ! !20051213!20080131!039192216!045591104!001339159!N!RAYTHEON COMPANY !1501 72ND ST N !SAINT PETERSBU !FL!33710!63000!103!12!SAINT PETERSBURG !PINELLAS !FLORIDA !+000007152576!N!N!000000000000!1265!FIRE CONTROL TRANSMITTING & RECEIVING EQ !A5 !WEAPONS !582 !CEC !334511!E! !3! ! ! ! ! !999

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 $20.9 million.

What is the period of performance?

Start: 2005-12-13. End: 2009-03-17.

What is Raytheon Company's track record with the Department of the Navy for similar fire control systems?

Raytheon Company, now part of RTX, has a long and extensive history of providing defense systems, including fire control and radar technologies, to the U.S. Navy. They are a major defense contractor involved in numerous programs across various naval platforms. Their experience includes developing, manufacturing, and integrating complex electronic systems. While this specific contract is for 'Fire Control Transmitting & Receiving Equipment,' Raytheon's broader portfolio includes advanced combat systems, missile defense, and C5ISR (Command, Control, Communications, Computers, Cyber, Intelligence, Surveillance, and Reconnaissance) solutions. Their track record generally indicates a capacity to deliver sophisticated defense hardware, though specific performance on individual contracts can vary and is often subject to government review and reporting.

How does the $20.9 million award compare to other contracts for similar fire control equipment?

Benchmarking this $20.9 million award requires access to detailed contract data for comparable fire control transmitting and receiving equipment. Given the sole-source nature of this award, direct comparisons are challenging as competitive pricing dynamics are absent. However, the North American Industry Classification System (NAICS) code 334511, 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing,' suggests a specialized, high-value product. Contracts for advanced military electronics can range from millions to hundreds of millions of dollars, depending on the system's complexity, quantity, and integration requirements. Without specific technical details and market analysis, it's difficult to definitively state if $20.9 million represents a high, low, or average value.

What are the primary risks associated with this sole-source contract?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competition. When only one vendor is solicited, there is less incentive for the contractor to offer the most cost-effective solution. Another risk is the potential for reduced innovation, as alternative approaches or technologies from other companies are not considered. Furthermore, sole-source awards can sometimes indicate a lack of adequate market research or planning by the procuring agency. There's also a risk of contractor lock-in, where the government becomes dependent on a single supplier for critical components, making future procurements more difficult and potentially more expensive.

What is the significance of the PSC code '582' and NAICS code '334511' in understanding this contract?

The Product and Service Code (PSC) '582' typically relates to 'Radio and Signal Equipment,' which aligns with 'transmitting and receiving equipment.' The North American Industry Classification System (NAICS) code '334511' is 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing.' Together, these codes indicate that the contract is for the production of specialized electronic equipment used in military search, detection, and navigation systems, likely involving radio frequency components critical for communication and targeting. This points to a high-technology defense manufacturing requirement.

What are the historical spending patterns for fire control systems by the Department of the Navy?

Historical spending patterns for fire control systems by the Department of the Navy are substantial and represent a significant portion of the defense budget allocated to naval modernization and readiness. The Navy consistently invests in advanced fire control systems to maintain its technological edge in naval warfare. This spending encompasses research and development, procurement of new systems, and sustainment of existing ones across various platforms, including surface ships, submarines, and aircraft. While specific figures fluctuate annually based on strategic priorities and budget allocations, fire control technology remains a critical and ongoing area of investment, often involving contracts with major defense primes like Raytheon.

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