DoD Spends $41.3M on Raytheon RDT&E LOE for SM Programs, Awarded Sole-Source

Contract Overview

Contract Amount: $41,343,433 ($41.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2012-03-07

End Date: 2018-02-28

Contract Duration: 2,184 days

Daily Burn Rate: $18.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: RDT&E LOE FOR SM PROGRAMS

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $41.3 million to RAYTHEON COMPANY for work described as: RDT&E LOE FOR SM PROGRAMS Key points: 1. Significant investment in R&D for specialized programs. 2. Sole-source award to Raytheon suggests unique capabilities or limited market. 3. Long contract duration (2184 days) indicates complex, ongoing work. 4. Cost-plus fixed fee contract type carries potential for cost overruns.

Value Assessment

Rating: questionable

The Cost Plus Fixed Fee contract type, combined with a sole-source award, raises concerns about potential cost inefficiencies. Benchmarking is difficult without comparable contracts, but the fee structure warrants scrutiny.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source award to Raytheon. This limits price discovery and competition, potentially leading to higher costs than if multiple vendors had bid.

Taxpayer Impact: Taxpayer funds are used for this RDT&E effort. The lack of competition may result in a less optimal use of these funds compared to a competitive procurement.

Public Impact

Defense spending on research and development. Potential impact on technological advancements in defense. Contract awarded to a major defense contractor. Long-term commitment of resources for specific programs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Long contract duration
Lack of competition

Positive Signals

Supports critical RDT&E for defense programs
Award to established contractor with relevant expertise

Sector Analysis

This contract falls under Engineering Services within the Defense sector. Spending benchmarks for RDT&E on specialized programs can vary widely, but sole-source, cost-plus contracts often represent higher risk and cost profiles.

Small Business Impact

The contract data does not indicate any specific provisions or awards to small businesses. The prime contractor is Raytheon Company, a large entity, suggesting limited direct opportunities for small businesses on this specific award.

Oversight & Accountability

Oversight would typically be managed by the Defense Contract Management Agency (DCMA). The cost-plus fixed fee structure necessitates close monitoring of costs and performance to ensure value for money.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Potential for cost overruns due to CPFF structure.
Lack of competitive pricing due to sole-source award.
Long contract duration may indicate scope creep or inefficiencies.
Limited transparency on specific program details and RDT&E outcomes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.3 million to RAYTHEON COMPANY. RDT&E LOE FOR SM PROGRAMS

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 $41.3 million.

What is the period of performance?

Start: 2012-03-07. End: 2018-02-28.

What specific RDT&E activities are encompassed by this contract, and how do they align with current defense priorities?

The contract is for Research, Development, Test, and Evaluation (RDT&E) for 'SM Programs.' Without further details on 'SM Programs,' it's difficult to assess alignment with defense priorities. However, RDT&E spending generally supports future capabilities and technological superiority, which are core defense objectives.

What justification was provided for the sole-source award, and were alternatives considered?

Sole-source awards typically require a justification based on unique capabilities, urgent needs, or lack of market availability. The Department of Defense would have needed to document why Raytheon was the only viable source and why competition was not feasible or advantageous for these specific RDT&E efforts.

How effectively has the Cost Plus Fixed Fee structure managed costs and incentivized performance given the contract's duration?

The Cost Plus Fixed Fee structure aims to cover costs plus a predetermined fee. Its effectiveness hinges on robust oversight to control costs and ensure the fee appropriately incentivizes performance. The long duration suggests ongoing monitoring is crucial to prevent cost creep and ensure program objectives are met efficiently.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002412R5400

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1151 E HERMANS RD, TUCSON, AZ, 85756

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: $41,343,433

Exercised Options: $41,343,433

Current Obligation: $41,343,433

Subaward Activity

Number of Subawards: 81

Total Subaward Amount: $13,335,167

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline