DoD awards Raytheon $130M for LPD 17 Class Ship Electronic Systems Support

Contract Overview

Contract Amount: $130,376,187 ($130.4M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2009-11-02

End Date: 2016-04-15

Contract Duration: 2,356 days

Daily Burn Rate: $55.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: LIFE CYCLE ENGINEERING AND SUPPORT (LCE&S) SERVICES FOR SELECT ELECTRONIC SYSTEMS IN THE LPD 17 CLASS AMPHIBIOUS TRANSPORT DOCK SHIPS

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $130.4 million to RAYTHEON COMPANY for work described as: LIFE CYCLE ENGINEERING AND SUPPORT (LCE&S) SERVICES FOR SELECT ELECTRONIC SYSTEMS IN THE LPD 17 CLASS AMPHIBIOUS TRANSPORT DOCK SHIPS Key points: 1. Significant contract value for specialized electronic systems engineering and support. 2. Sole-source award to Raytheon raises questions about competition and potential cost savings. 3. Long contract duration (2009-2016) suggests a critical, ongoing need for these services. 4. Focus on LPD 17 class ships indicates a specific platform requirement within naval defense.

Value Assessment

Rating: questionable

The contract type is Cost Plus Fixed Fee, which can lead to higher costs if not carefully managed. Without comparable contracts, assessing the value for money is difficult, especially given the lack of competition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded sole-source, meaning it was not competed. This limits price discovery and potentially increases costs for taxpayers as there was no competitive pressure to drive down the price.

Taxpayer Impact: The lack of competition in this sole-source award may result in higher costs for taxpayers than if the services had been competitively procured.

Public Impact

Ensures operational readiness of critical electronic systems on LPD 17 class ships. Supports the U.S. Navy's amphibious transport capabilities. Potential for cost overruns due to sole-source, cost-plus contract structure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition.
Cost-plus contract type can incentivize higher spending.
Lack of transparency in pricing due to no competition.

Positive Signals

Provides essential support for a key naval platform.
Ensures continued operational capability of electronic systems.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting naval defense platforms. Benchmarks for similar sole-source, cost-plus contracts are difficult to establish, but competition typically yields better pricing.

Small Business Impact

The data indicates this contract was not set aside for small businesses and was awarded to a large prime contractor, Raytheon Company. There is no information on subcontracting opportunities for small businesses.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure costs are reasonable and performance meets requirements. The Department of Defense and the Defense Contract Management Agency are responsible for monitoring this contract.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competition
Cost-plus contract type
Potential for cost overruns
Limited transparency in pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $130.4 million to RAYTHEON COMPANY. LIFE CYCLE ENGINEERING AND SUPPORT (LCE&S) SERVICES FOR SELECT ELECTRONIC SYSTEMS IN THE LPD 17 CLASS AMPHIBIOUS TRANSPORT DOCK SHIPS

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 $130.4 million.

What is the period of performance?

Start: 2009-11-02. End: 2016-04-15.

What was the justification for awarding this contract sole-source, and were alternative solutions considered?

Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For this contract, the justification would likely relate to unique capabilities or proprietary technology held by Raytheon for the LPD 17 class electronic systems. Without access to the specific justification documentation, it's impossible to confirm if alternatives were thoroughly explored or if this was a necessary procurement path.

How were costs controlled under this Cost Plus Fixed Fee (CPFF) contract to ensure fair and reasonable pricing without competition?

Controlling costs on a CPFF contract without competition relies heavily on robust government oversight, including detailed audits of contractor expenses and performance metrics. The Defense Contract Management Agency (DCMA) would be responsible for monitoring expenditures, ensuring they align with the fixed fee and the contract's scope. However, the inherent nature of CPFF contracts, especially when sole-sourced, presents a higher risk of cost overruns compared to fixed-price contracts.

What is the long-term strategy for ensuring competitive pricing for future electronic system support on LPD 17 class ships?

The long-term strategy should involve exploring options to introduce competition for future support contracts. This could include developing clearer performance work statements, encouraging potential competitors to invest in necessary expertise, or breaking down the requirement into smaller, more manageable components that could be competed. The goal would be to move away from sole-source arrangements to leverage market forces for better value.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002409R2205

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp (UEI: 001344142)

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

Financial Breakdown

Contract Ceiling: $485,098,484

Exercised Options: $446,821,704

Current Obligation: $130,376,187

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline