DoD Awards Raytheon $124M for Ship Building & Repair, Lacking Competition

Contract Overview

Contract Amount: $124,369,005 ($124.4M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2015-01-01

End Date: 2021-04-30

Contract Duration: 2,311 days

Daily Burn Rate: $53.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::CT::IGF ISE SAS (317)

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $124.4 million to RAYTHEON COMPANY for work described as: IGF::CT::IGF ISE SAS (317) Key points: 1. Significant contract value of $124.4M awarded to a single large vendor. 2. Lack of competition raises concerns about potential overpricing and value. 3. Long contract duration (2015-2021) suggests a sustained, potentially unoptimized spend. 4. Sector focus on shipbuilding and repair is critical for national defense.

Value Assessment

Rating: questionable

The contract value of $124.4M for ship building and repair is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to market rates or similar government contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was 'NOT COMPETED,' indicating a sole-source or limited competition award. This significantly limits price discovery and may lead to higher costs for taxpayers.

Taxpayer Impact: The absence of competition likely results in a higher cost to taxpayers than a fully competed contract would achieve.

Public Impact

Taxpayers may be overpaying for essential shipbuilding and repair services. Reduced innovation and efficiency due to lack of competitive pressure. Potential for long-term reliance on a single contractor without performance checks.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of Competition
Sole-Source Award
High Contract Value
Long Contract Duration

Positive Signals

Critical Defense Spending
Established Contractor

Sector Analysis

This contract falls within the shipbuilding and repair sector, a vital component of the Department of Defense's operational capabilities. Spending benchmarks in this area are often high due to specialized labor and materials, but competition is key to managing costs.

Small Business Impact

The contract was awarded to Raytheon Company, a large defense contractor. There is no indication that small businesses were involved or considered in this procurement, suggesting a missed opportunity for small business participation.

Oversight & Accountability

The 'NOT COMPETED' status warrants further oversight to ensure the justification for limited competition was sound and that the pricing is reasonable. Accountability for the lack of competitive bidding is crucial.

Related Government Programs

Ship Building and Repairing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of Competition
Sole-Source Award
Potential for Overpricing
Limited Transparency
Missed Small Business Opportunities

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $124.4 million to RAYTHEON COMPANY. IGF::CT::IGF ISE SAS (317)

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 $124.4 million.

What is the period of performance?

Start: 2015-01-01. End: 2021-04-30.

What was the specific justification for not competing this significant shipbuilding contract, and was it adequately documented?

The justification for not competing this $124.4M contract is critical. Agencies typically require strong rationale, such as unique capabilities or urgent needs, to bypass full and open competition. Without this documentation, it's difficult to assess if taxpayer funds were used responsibly and if alternative solutions were explored.

How does the cost-plus-fixed-fee structure impact the contractor's incentive to control costs on this long-term, non-competed contract?

A Cost Plus Fixed Fee (CPFF) contract can incentivize contractors to manage costs, as their profit is fixed regardless of the final cost. However, without competitive pressure, the baseline cost estimate might be inflated. The government still bears the risk of cost overruns if the initial estimate is inaccurate, and the fixed fee may not reflect true market value.

What measures are in place to ensure the quality and effectiveness of shipbuilding and repair services provided by Raytheon under this contract, given the lack of competition?

Despite the lack of competition, robust quality assurance and performance monitoring are essential. The Department of the Navy should have stringent oversight mechanisms, including regular inspections, performance reviews, and adherence to technical specifications. These measures are crucial to ensure the services meet requirements and taxpayer money is well-spent, even without competitive benchmarks.

Industry Classification

NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing

Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002414R2414

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 8650 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: $131,348,516

Exercised Options: $131,348,516

Current Obligation: $124,369,005

Actual Outlays: $3,931,682

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline