Raytheon Company awarded $50.4M contract for electron tube manufacturing, serving defense needs

Contract Overview

Contract Amount: $50,444,237 ($50.4M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2008-12-23

End Date: 2014-09-30

Contract Duration: 2,107 days

Daily Burn Rate: $23.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CVN, MOD 1B

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $50.4 million to RAYTHEON COMPANY for work described as: CVN, MOD 1B Key points: 1. Contract value represents a significant investment in specialized defense manufacturing capabilities. 2. Competition dynamics for this type of specialized component manufacturing can be limited. 3. Contract duration of over 2000 days suggests a long-term need for these components. 4. Fixed-price contract type aims to control costs and provide budget certainty. 5. Geographic concentration in California may indicate a regional hub for this manufacturing sector.

Value Assessment

Rating: good

The contract value of $50.4 million for electron tube manufacturing appears reasonable given the specialized nature of the product and the duration of the contract (over 5 years). Benchmarking against similar specialized defense component contracts would provide a more precise value-for-money assessment. The firm fixed-price structure suggests an effort to manage cost overruns, which is a positive indicator for value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The number of bidders is not specified, but the fact that it was competed openly suggests a healthy market for this type of manufacturing. This process is designed to foster price discovery and ensure the government receives competitive pricing.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through market forces, ensuring that the government is not overpaying for necessary goods and services.

Public Impact

The Department of Defense is the primary beneficiary, receiving critical components for its operations. Services delivered include the manufacturing of specialized electron tubes, essential for various defense systems. The contract's geographic impact is concentrated in California, supporting local manufacturing and employment. Workforce implications include the need for skilled labor in specialized manufacturing and engineering roles within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions if the sole manufacturer faces issues.
Long-term reliance on a single contractor for critical components could reduce future competition.
Technological obsolescence of electron tubes in favor of newer technologies could impact future demand.

Positive Signals

Successful completion of a complex manufacturing process under a fixed-price contract.
Contribution to the domestic defense industrial base and specialized manufacturing capabilities.
Award through full and open competition suggests a robust market and fair pricing.

Sector Analysis

This contract falls within the Electron Tube Manufacturing sector (NAICS 334411), a niche but critical part of the broader electronics and defense manufacturing industries. The market for specialized defense-grade electron tubes is often characterized by high barriers to entry due to technical expertise, stringent quality control, and specific defense requirements. Spending in this sector is directly tied to defense procurement cycles and technological advancements in electronic warfare and communication systems.

Small Business Impact

The contract indicates that small business participation was not a primary set-aside consideration, as the awardee is a large corporation and the 'sb' field is false. There is no explicit information on subcontracting plans for small businesses. This suggests that the primary focus was on the large contractor's capability to fulfill the specialized manufacturing requirement, with potential limited direct impact on the small business ecosystem unless Raytheon actively engages them for subcontracting.

Oversight & Accountability

The contract is managed by the Defense Contract Management Agency (DCMA), which provides contract administration services to ensure compliance with terms and conditions. Oversight mechanisms would include performance monitoring, quality assurance checks, and financial reviews. Transparency is facilitated through contract award databases, though detailed operational oversight specifics are typically internal to the agency and contractor.

Related Government Programs

Defense Electronics Manufacturing
Specialized Component Procurement
Electron Tube Production
Military Communication Systems Components

Risk Flags

Long contract duration increases risk of obsolescence or changing requirements.
Specialized manufacturing may limit competition, potentially impacting price.
Dependence on specific raw materials could lead to supply chain vulnerabilities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $50.4 million to RAYTHEON COMPANY. CVN, MOD 1B

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 $50.4 million.

What is the period of performance?

Start: 2008-12-23. End: 2014-09-30.

What is Raytheon Company's track record with similar defense manufacturing contracts?

Raytheon Company, now part of RTX Corporation, has an extensive and long-standing track record in defense manufacturing, including the production of various electronic components, sensors, and systems for military applications. They are a prime contractor on numerous large-scale defense programs across different branches of the U.S. military and allied nations. Their experience spans decades, encompassing complex manufacturing processes, stringent quality control, and adherence to demanding defense specifications. While specific details on past electron tube contracts are not provided here, their overall portfolio demonstrates a deep capability in producing high-reliability components essential for national security. Past performance reviews and contract awards databases would offer more granular insights into their specific successes and challenges in delivering similar defense hardware.

How does the $50.4 million value compare to other electron tube manufacturing contracts?

The $50.4 million contract value for electron tube manufacturing, awarded over a period of approximately 2107 days (about 5.7 years), suggests a substantial, long-term procurement. Without access to a comprehensive database of all electron tube manufacturing contracts, a direct comparison is challenging. However, contracts for specialized defense components often command higher prices due to rigorous testing, quality assurance, and the limited number of qualified manufacturers. If this contract involved high-volume production or particularly complex, custom-designed tubes, the value would be considered within a reasonable range for a prime defense contractor. Conversely, if it were for standard, lower-specification tubes, the value might be higher than typical commercial equivalents. The firm fixed-price nature also implies that the quoted price was deemed acceptable by both parties for the defined scope.

What are the primary risks associated with this type of specialized manufacturing contract?

Key risks for this specialized manufacturing contract include technological obsolescence, where newer technologies might supersede the need for electron tubes, rendering the investment less valuable over time. Supply chain vulnerabilities are another significant risk; disruptions in the availability of raw materials or specialized components required for tube manufacturing could lead to delays and cost overruns, despite the fixed-price nature. Contractor performance risk exists, where the manufacturer might face production challenges, quality control issues, or fail to meet delivery schedules, impacting defense readiness. Furthermore, geopolitical factors or changes in defense spending priorities could alter the demand for these specific components. The long duration of the contract also increases the risk of unforeseen market shifts or regulatory changes impacting production.

How effective is full and open competition in ensuring value for specialized defense components?

Full and open competition is generally the most effective mechanism for ensuring value for defense components, including specialized ones, as it theoretically maximizes the number of potential bidders and fosters a competitive pricing environment. However, the effectiveness can be diminished for highly specialized items like electron tubes if the pool of qualified manufacturers is inherently small. In such cases, even with open competition, the number of viable bids might be limited, potentially reducing the downward pressure on prices. The Department of Defense often relies on robust technical evaluations alongside price to ensure that the 'best value' is achieved, which may not always be the lowest price. For this specific contract, the fact that it was competed openly suggests that the agency identified multiple capable sources, which is a positive sign for achieving competitive pricing and technical suitability.

What are the historical spending patterns for electron tube manufacturing within the Department of Defense?

Historical spending patterns for electron tube manufacturing within the Department of Defense (DoD) have likely seen fluctuations tied to defense modernization cycles, technological advancements, and the phasing out of older systems. While specific aggregate data for 'electron tube manufacturing' as a distinct category is not readily available in public summaries, spending on related sub-systems and components has been significant. Historically, vacuum tubes were foundational to early electronics, and while solid-state technology has replaced many applications, specialized tubes (like klystrons, magnetrons, traveling-wave tubes) remain critical for high-power radar, electronic warfare, and certain communication systems. DoD spending in this niche area is likely characterized by long-term, high-value contracts awarded to a limited number of specialized manufacturers, reflecting the high technical barriers and stringent reliability requirements for defense applications. Spending would have peaked during periods of significant radar and electronic warfare system development and deployment.

Industry Classification

NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Electron Tube Manufacturing

Product/Service Code: SHIP AND MARINE EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0002408R5125

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $50,444,237

Exercised Options: $50,444,237

Current Obligation: $50,444,237

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline