Navy's $358M Ship Self Defense Systems Contract Awarded to Raytheon Without Competition
Contract Overview
Contract Amount: $358,109,509 ($358.1M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2013-12-17
End Date: 2021-05-18
Contract Duration: 2,709 days
Daily Burn Rate: $132.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: SHIP SELF DEFENSE SYSTEMS (SSDS) PSEA FY14-FY17 FOLLOW-ON CONTRACT
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92123
Plain-Language Summary
Department of Defense obligated $358.1 million to RAYTHEON COMPANY for work described as: SHIP SELF DEFENSE SYSTEMS (SSDS) PSEA FY14-FY17 FOLLOW-ON CONTRACT Key points: 1. Significant spending on critical defense systems highlights the importance of naval security. 2. Sole-source award to Raytheon raises questions about potential price inflation and lack of market pressure. 3. Long contract duration (2013-2021) suggests a sustained need for these specialized services. 4. The 'Other Scientific and Technical Consulting Services' NAICS code may obscure the specific nature of the defense systems procured.
Value Assessment
Rating: questionable
The contract's cost-plus incentive fee structure, combined with a lack of competition, makes a direct pricing assessment difficult. Without benchmarks from competing bids, it's hard to determine if the $358M represents fair market value.
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 was no competitive pressure to drive down prices.
Taxpayer Impact: The lack of competition on this substantial contract likely results in higher costs for taxpayers compared to a fully competed procurement.
Public Impact
Taxpayers may be overpaying for critical naval defense systems due to the absence of competitive bidding. The long-term nature of the contract could lock the Navy into a specific technology or vendor, potentially hindering innovation. Ensuring the effectiveness and necessity of these specific self-defense systems is crucial for national security spending.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Cost-plus contract type
- Long contract duration
Positive Signals
- Awarded to a known defense contractor
- Addresses critical national security needs
Sector Analysis
This contract falls within the defense sector, specifically for naval self-defense systems. Spending in this area is often characterized by high costs, specialized technology, and significant government oversight due to national security implications.
Small Business Impact
There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. The sole-source nature of the award to a large corporation like Raytheon further suggests limited opportunities for small business participation.
Oversight & Accountability
The sole-source nature of this contract warrants close oversight to ensure Raytheon is delivering necessary services at a reasonable cost. Accountability mechanisms should be robust given the significant taxpayer investment and lack of competitive pressure.
Related Government Programs
- Other Scientific and Technical Consulting Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Potential for overpricing due to lack of competition.
- Risk of vendor lock-in and limited technological advancement.
- Questionable value for money given the contract structure.
- Lack of transparency in the procurement process.
Tags
other-scientific-and-technical-consultin, department-of-defense, ca, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $358.1 million to RAYTHEON COMPANY. SHIP SELF DEFENSE SYSTEMS (SSDS) PSEA FY14-FY17 FOLLOW-ON CONTRACT
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 $358.1 million.
What is the period of performance?
Start: 2013-12-17. End: 2021-05-18.
What specific self-defense capabilities does the SSDS PSEA provide, and how critical are they to current naval operations?
The Ship Self Defense Systems (SSDS) PSEA likely refers to systems designed to protect naval vessels from various threats, including missiles and aircraft. Their criticality lies in ensuring the survivability of warships in combat zones. Understanding the specific threats addressed and the system's effectiveness is key to justifying the significant investment.
What factors led to the sole-source determination for this contract, and were alternatives considered?
Sole-source awards are typically justified by unique capabilities, urgent needs, or the unavailability of other sources. For the SSDS PSEA, the justification might stem from proprietary technology or a highly specialized integration requirement. A thorough review of the justification documentation is necessary to confirm the validity of these reasons and ensure no viable competitive alternatives were overlooked.
How does the cost-plus incentive fee structure ensure value for money in the absence of competition?
Cost-plus incentive fee contracts aim to incentivize the contractor to control costs by sharing savings or penalties based on performance against targets. However, without a competitive baseline, setting appropriate targets is challenging. Oversight is crucial to ensure the incentive structure effectively drives cost efficiency and doesn't simply allow for inflated costs to be passed on.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Other Scientific and Technical Consulting Services
Product/Service Code: FIRE CONTROL EQPT.
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0002413R5128
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
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: $365,272,440
Exercised Options: $365,272,440
Current Obligation: $358,109,509
Actual Outlays: $3,536,625
Subaward Activity
Number of Subawards: 206
Total Subaward Amount: $71,233,291
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2013-12-17
Current End Date: 2021-05-18
Potential End Date: 2021-05-18 00:00:00
Last Modified: 2025-04-21
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