DoD Awards Raytheon $50.4M for Navigation Systems, Sole-Source Contract Raises Concerns
Contract Overview
Contract Amount: $50,455,404 ($50.5M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2017-05-26
End Date: 2025-06-30
Contract Duration: 2,957 days
Daily Burn Rate: $17.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: IGF:OT::IGF
Place of Performance
Location: PORTSMOUTH, NEWPORT County, RHODE ISLAND, 02871
Plain-Language Summary
Department of Defense obligated $50.5 million to RAYTHEON COMPANY for work described as: IGF:OT::IGF Key points: 1. Significant contract value awarded to a single vendor. 2. Sole-source award limits competitive pricing and innovation. 3. Long contract duration (2017-2025) may not reflect current market conditions. 4. Focus on navigation systems is critical for military operations.
Value Assessment
Rating: questionable
The contract's value is substantial, but without competition, it's difficult to assess if the pricing is optimal. Benchmarking against similar sole-source contracts for navigation systems would be necessary for a thorough evaluation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This method bypasses competitive bidding, potentially leading to higher prices and reduced opportunities for other qualified vendors to offer their solutions.
Taxpayer Impact: The lack of competition in this sole-source award means taxpayers may not be receiving the best possible value, as pricing is not driven down by market forces.
Public Impact
Ensures continued availability of critical navigation technology for the Navy. Potential for cost overruns due to lack of competitive pressure. Limited transparency on how the price was determined without a competitive process.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Long contract duration
Positive Signals
- Critical technology for defense
- Established vendor
Sector Analysis
The Department of Defense frequently procures complex systems like navigation instruments. Spending in this sector is often characterized by high R&D costs and specialized manufacturing, making competition challenging but crucial for value.
Small Business Impact
This contract was awarded to Raytheon Company, a large defense contractor. There is no indication that small businesses were involved in this specific award, missing an opportunity for their participation.
Oversight & Accountability
The sole-source nature of this contract warrants close oversight to ensure fair pricing and prevent potential waste. Regular reviews of performance and cost justification are essential for accountability.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award
- Lack of competition
- Potential for price creep
- Limited small business participation
- Long contract duration
Tags
search-detection-navigation-guidance-aer, department-of-defense, ri, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $50.5 million to RAYTHEON COMPANY. IGF:OT::IGF
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 $50.5 million.
What is the period of performance?
Start: 2017-05-26. End: 2025-06-30.
What was the justification for awarding this contract on a sole-source basis, and how was the price determined to be fair and reasonable?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one vendor can fulfill the requirement. The price is usually determined through negotiation, often referencing historical pricing, cost proposals, and market research. However, without competition, verifying the 'fair and reasonable' aspect requires rigorous internal review and documentation by the contracting agency.
What are the potential risks associated with a long-term, sole-source contract for navigation systems?
Long-term, sole-source contracts carry risks of price escalation due to the absence of competitive pressure, potential for technological obsolescence if the vendor does not innovate aggressively, and reduced flexibility for the government to adapt to changing requirements or adopt superior alternative solutions. There's also a risk of vendor lock-in, making it difficult and costly to switch providers later.
How does this contract contribute to the overall effectiveness of the Department of the Navy's operations?
Reliable search, detection, and navigation systems are fundamental to naval operations, impacting everything from vessel safety and mission execution to intelligence gathering and combat effectiveness. Ensuring a consistent supply of these critical instruments through this contract directly supports the Navy's ability to maintain operational readiness and achieve its strategic objectives at sea.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: WEAPONS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0002416R6305
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Rockwell Collins Australia PTY Limited
Address: 1847 W MAIN RD, PORTSMOUTH, RI, 02871
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: $290,703,067
Exercised Options: $54,240,498
Current Obligation: $50,455,404
Actual Outlays: $4,586,789
Subaward Activity
Number of Subawards: 280
Total Subaward Amount: $117,934,470
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2017-05-26
Current End Date: 2025-06-30
Potential End Date: 2025-06-30 00:00:00
Last Modified: 2025-09-17
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