DoD Awards Raytheon $285.8M for CIWS Design Agent Services, Lacking Competition

Contract Overview

Contract Amount: $285,773,939 ($285.8M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2017-01-03

End Date: 2026-03-31

Contract Duration: 3,374 days

Daily Burn Rate: $84.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IFG::OT:IFG CIWS DESIGN AGENT

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $285.8 million to RAYTHEON COMPANY for work described as: IFG::OT:IFG CIWS DESIGN AGENT Key points: 1. Significant contract value awarded to a single large business. 2. Lack of competition raises concerns about potential overpricing and value. 3. Long contract duration (2017-2026) suggests a critical, ongoing need. 4. Engineering services sector often involves complex, specialized requirements.

Value Assessment

Rating: questionable

The contract's cost-plus-fixed-fee structure, combined with a lack of competition, makes it difficult to assess value. Without competitive bids, it's hard to benchmark pricing against market rates for similar engineering services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there was no competitive pressure to drive down the price.

Taxpayer Impact: The absence of competition on this large contract may result in taxpayers paying more than necessary for the engineering services provided.

Public Impact

Taxpayers may be overpaying due to the lack of competitive bidding. The long-term nature of the contract suggests a critical defense system is involved. Transparency in pricing and performance is crucial given the sole-source award.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Long contract duration
No small business participation

Positive Signals

Awarded to a major defense contractor
Addresses a specific, likely critical, engineering need

Sector Analysis

This contract falls within the Engineering Services sector, specifically for the design agent of the Close-In Weapon System (CIWS). Spending in this sector can vary widely based on defense needs and project complexity.

Small Business Impact

This contract does not appear to have any small business participation, as indicated by the 'sb' field being false. This is a missed opportunity for small businesses to contribute to defense contracts.

Oversight & Accountability

The sole-source nature of this contract warrants close oversight to ensure fair pricing and effective performance. Accountability for cost and delivery is paramount.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competition
Cost-plus contract type
No small business participation
Long contract duration
Potential for cost overruns
Limited transparency on pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $285.8 million to RAYTHEON COMPANY. IFG::OT:IFG CIWS DESIGN AGENT

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 $285.8 million.

What is the period of performance?

Start: 2017-01-03. End: 2026-03-31.

What specific factors justified the sole-source award for this critical CIWS design agent contract, and were alternatives explored?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. For this CIWS design agent contract, the Department of Defense would need to document why only Raytheon Company could fulfill the requirement. Exploring alternatives, even if ultimately deemed unsuitable, is a standard part of the procurement process to ensure best value.

How is Raytheon's performance and cost-effectiveness being monitored under this cost-plus-fixed-fee contract, especially given the lack of competition?

Monitoring performance and cost-effectiveness on cost-plus contracts, particularly sole-source ones, relies heavily on robust government oversight. This includes detailed audits, regular performance reviews, and strict adherence to contract terms. The government must actively manage the contractor's costs and ensure deliverables meet specifications without the natural checks and balances of a competitive bidding process.

What is the projected long-term cost to the government for the full duration of this contract, and how does it compare to potential competitive bids?

Projecting the full long-term cost requires analyzing the contract's ceiling, estimated costs, and potential for modifications or extensions. Without competitive bids, a direct comparison is impossible. However, the government should conduct internal cost analyses and market research to estimate what a competitive process might yield, using this as a benchmark for oversight and negotiation.

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 COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002416R5405

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

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: $463,446,722

Exercised Options: $292,587,695

Current Obligation: $285,773,939

Actual Outlays: $21,417,998

Subaward Activity

Number of Subawards: 537

Total Subaward Amount: $317,150,128

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline