DoD awards $129M for LPD 26 electronics, a sole-source contract with Raytheon Company
Contract Overview
Contract Amount: $128,916,860 ($128.9M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2010-10-29
End Date: 2018-12-31
Contract Duration: 2,985 days
Daily Burn Rate: $43.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: LONG-LEAD-TIME MATERIAL FOR LPD 26 INTEGRATED SHIPBOARD ELECTRONICS
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92123
Plain-Language Summary
Department of Defense obligated $128.9 million to RAYTHEON COMPANY for work described as: LONG-LEAD-TIME MATERIAL FOR LPD 26 INTEGRATED SHIPBOARD ELECTRONICS Key points: 1. Significant investment in critical naval technology. 2. Sole-source award raises questions about price discovery. 3. Long lead-time material suggests complex, extended project. 4. Focus on shipbuilding and repair sector.
Value Assessment
Rating: questionable
The contract value of $128.9M for long-lead-time material is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential alternatives or historical benchmarks for similar integrated shipboard electronics.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Raytheon Company. This limits price discovery and potentially leads to higher costs for taxpayers as there is no market pressure to offer the best price.
Taxpayer Impact: The lack of competition for this significant award means taxpayers may be paying a premium for the required materials, as alternative suppliers or pricing structures were not explored.
Public Impact
Ensures continued development of naval capabilities. Potential for cost overruns due to sole-source nature. Impacts the defense industrial base and supply chain. Supports jobs in shipbuilding and electronics manufacturing.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Long contract duration
Positive Signals
- Critical defense procurement
- Supports advanced naval technology
Sector Analysis
This contract falls within the shipbuilding and repairing sector, specifically for integrated shipboard electronics. Spending benchmarks in this specialized area are hard to establish without competitive data, but large sole-source awards warrant scrutiny.
Small Business Impact
The data does not indicate any specific provisions or benefits for small businesses in this sole-source award. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses.
Oversight & Accountability
The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. The sole-source nature necessitates robust oversight to ensure cost reasonableness and performance.
Related Government Programs
- Ship Building and Repairing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award limits price competition.
- Cost-plus contract type can lead to cost overruns.
- Long contract duration increases risk exposure.
- Lack of small business participation noted.
Tags
ship-building-and-repairing, department-of-defense, ca, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $128.9 million to RAYTHEON COMPANY. LONG-LEAD-TIME MATERIAL FOR LPD 26 INTEGRATED SHIPBOARD ELECTRONICS
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 $128.9 million.
What is the period of performance?
Start: 2010-10-29. End: 2018-12-31.
What is the justification for the sole-source award, and were alternative procurement strategies considered?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Without specific documentation, it's presumed the DoD determined Raytheon was the only viable option for this specialized long-lead-time material for LPD 26.
How will the cost-plus fixed fee structure be managed to ensure taxpayer value given the lack of competition?
Cost-plus fixed fee contracts require stringent oversight to control costs. The DoD must meticulously audit incurred costs and ensure the fixed fee remains reasonable. Robust performance metrics and regular reviews are crucial to mitigate risks associated with cost overruns and ensure the final price reflects fair value.
What are the projected risks and mitigation strategies for delivering this long-lead-time material on schedule and within budget?
Key risks include supply chain disruptions, technological obsolescence, and cost escalation. Mitigation strategies involve proactive supplier management, contingency planning for material shortages, and rigorous schedule adherence. The long duration necessitates continuous monitoring and adaptive management to address unforeseen challenges.
Industry Classification
NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing
Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0002410R2237
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: RTX Corp
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: $133,779,064
Exercised Options: $133,493,564
Current Obligation: $128,916,860
Actual Outlays: $129
Subaward Activity
Number of Subawards: 290
Total Subaward Amount: $43,519,410
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2010-10-29
Current End Date: 2018-12-31
Potential End Date: 2018-12-31 00:00:00
Last Modified: 2022-09-14
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