DoD awards $247M contract for RAM Design Agent services to Raytheon Company

Contract Overview

Contract Amount: $246,799,079 ($246.8M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2018-07-20

End Date: 2026-12-31

Contract Duration: 3,086 days

Daily Burn Rate: $80.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: RAM DESIGN AGENT

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $246.8 million to RAYTHEON COMPANY for work described as: RAM DESIGN AGENT Key points: 1. Contract value of $247M for engineering services. 2. Raytheon Company is the sole awardee. 3. Contract duration extends to December 2026. 4. Services fall under engineering (NAICS 541330).

Value Assessment

Rating: questionable

The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. The benchmark for similar engineering services contracts is not readily available, making a direct comparison difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating a lack of competition. This method may not result in the most favorable pricing for taxpayers.

Taxpayer Impact: The absence of competition for a significant contract value raises concerns about potential overspending and reduced value for taxpayer funds.

Public Impact

Significant taxpayer investment in defense engineering services. Potential for cost escalation due to sole-source, CPFF contract. Impact on defense readiness and technological advancement. Limited transparency on pricing due to lack of competition.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost Plus Fixed Fee contract type
Long contract duration
Lack of competition

Positive Signals

Awarded to a major defense contractor
Supports critical defense needs

Sector Analysis

This contract falls within the defense sector, specifically for engineering services. Spending in this area is substantial, driven by national security requirements and technological development. Benchmarks for sole-source engineering contracts are difficult to establish due to their unique nature.

Small Business Impact

There is no indication that small businesses were involved in this sole-source award. The contract was awarded directly to Raytheon Company, a large prime contractor, limiting opportunities for small business participation.

Oversight & Accountability

Oversight is crucial for sole-source, Cost Plus Fixed Fee contracts to ensure cost control and performance. The Defense Contract Management Agency is responsible for this contract, but the inherent nature of the award warrants close scrutiny of expenditures and deliverables.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Sole-source award limits competition and potentially increases costs.
Cost Plus Fixed Fee contract type carries inherent risk of cost overruns.
Long contract duration (over 8 years) increases exposure to changing requirements and market conditions.
Lack of transparency on specific services provided.
No indication of small business subcontracting opportunities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $246.8 million to RAYTHEON COMPANY. RAM 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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $246.8 million.

What is the period of performance?

Start: 2018-07-20. End: 2026-12-31.

What specific engineering services are being provided under this contract, and how do they directly contribute to national security objectives?

The contract is for 'RAM DESIGN AGENT' services, which likely pertains to the design and development of critical systems or components within defense platforms. While the exact nature is not detailed, such services are fundamental to maintaining and advancing military technological superiority and operational readiness, directly supporting national security objectives by ensuring the functionality and effectiveness of defense assets.

Given the sole-source nature and CPFF structure, what mechanisms are in place to mitigate cost overruns and ensure fair pricing?

Mitigation strategies for sole-source CPFF contracts typically involve stringent oversight, detailed cost audits, and performance-based incentives where possible. The Defense Contract Management Agency (DCMA) would be responsible for monitoring expenditures, validating costs, and ensuring the contractor meets performance milestones. However, the inherent lack of competition limits the primary price discovery mechanism, making robust oversight paramount.

How will the effectiveness of the 'RAM DESIGN AGENT' services be measured, and what are the key performance indicators (KPIs)?

Effectiveness is typically measured against predefined technical specifications, performance requirements, and delivery schedules outlined in the contract. Key Performance Indicators (KPIs) might include adherence to design standards, successful integration of components, timely completion of design phases, and achievement of specified performance metrics for the systems being designed. The contracting officer's representative (COR) would monitor these KPIs.

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: N0002417R5431

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: $301,743,278

Exercised Options: $301,743,278

Current Obligation: $246,799,079

Actual Outlays: $14,976,265

Subaward Activity

Number of Subawards: 150

Total Subaward Amount: $24,049,138

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline