Raytheon Awarded $163M Engineering Support Services Contract by DoD, Lacking Competition

Contract Overview

Contract Amount: $163,193,480 ($163.2M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2014-12-01

End Date: 2020-07-30

Contract Duration: 2,068 days

Daily Burn Rate: $78.9K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF RAM FY 15-19 DESIGN AGENT AND ENGINEERING SUPPORT SERVICES CONTRACT

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $163.2 million to RAYTHEON COMPANY for work described as: IGF::OT::IGF RAM FY 15-19 DESIGN AGENT AND ENGINEERING SUPPORT SERVICES CONTRACT Key points: 1. Contract awarded to Raytheon Company for engineering support services. 2. Significant spending of $163.2 million over the contract's duration. 3. Contract was not available for competition, raising concerns about price discovery. 4. Services fall under Engineering Services (NAICS 541330) within the Defense sector.

Value Assessment

Rating: questionable

The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed tightly. Without competitive bidding, it's difficult to assess if the fixed fee accurately reflects the value of the services provided compared to market rates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was explicitly stated as 'NOT AVAILABLE FOR COMPETITION'. This lack of competition limits the government's ability to secure the best possible pricing through market forces and potentially leads to higher costs.

Taxpayer Impact: The absence of competition means taxpayers may not be receiving the most cost-effective solution for these engineering services, potentially leading to overspending.

Public Impact

Taxpayers may be paying a premium due to the lack of competitive bidding. The long duration of the contract (2068 days) means sustained potential for inefficient spending. Lack of transparency in pricing due to sole-source nature impacts public trust. Essential defense engineering services are procured without exploring alternative providers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost-plus contract type
Long contract duration
No small business participation indicated

Positive Signals

Essential engineering services provided to the Department of Defense

Sector Analysis

This contract falls within the Defense sector, specifically for engineering services. Spending benchmarks for similar services can vary widely based on complexity and duration, but the lack of competition here makes direct comparison difficult.

Small Business Impact

The data indicates that small business participation was not a factor in this contract (ss: false, sb: false). This suggests that opportunities for small businesses to contribute to these engineering services were not pursued or mandated.

Oversight & Accountability

The contract was managed by the Defense Contract Management Agency. However, the 'NOT AVAILABLE FOR COMPETITION' status raises questions about the effectiveness of oversight in ensuring value for money and competitive pricing.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competitive bidding
Potential for inflated costs due to sole-source award
Cost-plus contract type increases government cost risk
Long contract duration (2068 days) extends exposure to potential inefficiencies
No indication of small business involvement

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $163.2 million to RAYTHEON COMPANY. IGF::OT::IGF RAM FY 15-19 DESIGN AGENT AND ENGINEERING SUPPORT SERVICES CONTRACT

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 $163.2 million.

What is the period of performance?

Start: 2014-12-01. End: 2020-07-30.

What was the justification for not making this significant engineering support contract available for competition?

The provided data states the contract was 'NOT AVAILABLE FOR COMPETITION' without further justification. Typically, such sole-source awards require a detailed justification, often citing unique capabilities, urgent needs, or lack of viable alternatives. Without this justification, it's impossible to assess the validity of the non-competitive award.

How does the Cost Plus Fixed Fee structure impact the risk of cost overruns in this contract?

Cost Plus Fixed Fee (CPFF) contracts shift some cost risk to the government. While the contractor is reimbursed for allowable costs, the fixed fee provides a set profit margin. If costs escalate beyond projections, the government bears the burden, increasing the risk of overruns, especially without competitive pressure to optimize efficiency.

What is the potential taxpayer impact of awarding a $163 million contract without competition?

Awarding a contract of this magnitude without competition significantly increases the risk of the government paying more than necessary. Competitive bidding typically drives down prices and encourages innovation. The absence of this process means taxpayers may be funding inflated costs or suboptimal service delivery.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002414R5410

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

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: $163,711,901

Exercised Options: $163,711,901

Current Obligation: $163,193,480

Subaward Activity

Number of Subawards: 144

Total Subaward Amount: $28,181,179

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline