Navy's $117.6M DBR DA/TE Services Contract with Raytheon Faces Scrutiny for Lack of Competition
Contract Overview
Contract Amount: $117,643,375 ($117.6M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2019-01-18
End Date: 2024-09-30
Contract Duration: 2,082 days
Daily Burn Rate: $56.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: FY19-FY22 DBR DA/TE SERVICES
Place of Performance
Location: TEWKSBURY, MIDDLESEX County, MASSACHUSETTS, 01876
Plain-Language Summary
Department of Defense obligated $117.6 million to RAYTHEON COMPANY for work described as: FY19-FY22 DBR DA/TE SERVICES Key points: 1. Significant spending of $117.6M over FY19-FY22 on DBR DA/TE Services. 2. Sole awardee, Raytheon Company, raises concerns about competitive pricing. 3. Contract type (Cost Plus Fixed Fee) can incentivize cost overruns. 4. Lack of competition limits potential cost savings for taxpayers.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee structure, coupled with a lack of competition, makes it difficult to assess value for money. Benchmarking against similar contracts is challenging without competitive data.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs than a competitive process would yield.
Taxpayer Impact: The absence of competition means taxpayers may be paying a premium for these services, as there was no market pressure to drive down prices.
Public Impact
Taxpayers may be overpaying due to the lack of competitive bidding. The long duration (FY19-FY24) of this sole-source contract warrants review. Potential for cost overruns exists with the Cost Plus Fixed Fee structure.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Long contract duration
Positive Signals
- Essential services provided to the Department of the Navy
Sector Analysis
This contract falls under the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector. Spending in this niche area can be high due to specialized requirements, but competition is crucial for cost control.
Small Business Impact
The data indicates no small business participation in this contract, which is common for large, sole-source awards to major defense contractors.
Oversight & Accountability
The sole-source nature of this contract suggests a need for robust oversight to ensure costs are reasonable and performance meets requirements. A review of the justification for not competing is warranted.
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
- Lack of competition
- Cost Plus Fixed Fee contract type
- Potential for inflated pricing
- Limited transparency on cost drivers
- Long-term sole-source award
Tags
search-detection-navigation-guidance-aer, department-of-defense, ma, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $117.6 million to RAYTHEON COMPANY. FY19-FY22 DBR DA/TE SERVICES
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 $117.6 million.
What is the period of performance?
Start: 2019-01-18. End: 2024-09-30.
What was the justification for awarding this contract on a sole-source basis rather than through full and open competition?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs that cannot be met by other sources. Without specific documentation, it's impossible to confirm the exact reason, but such justifications are critical for ensuring taxpayer funds are used appropriately and that competition is only bypassed when truly necessary.
How does the Cost Plus Fixed Fee structure impact the potential for cost overruns in this specific contract?
Cost Plus Fixed Fee (CPFF) contracts reimburse the contractor for allowable costs plus a fixed fee representing profit. While the fee is fixed, the contractor has less incentive to control costs compared to fixed-price contracts. If costs increase, the government pays more, and the contractor's profit margin remains the same, potentially leading to higher overall spending than anticipated.
What is the potential impact on future defense procurements if sole-source contracts of this nature become standard practice?
If sole-source contracts become standard, it could stifle innovation and competition within the defense industrial base. It may lead to reduced pressure on contractors to offer competitive pricing, potentially increasing costs for the government and taxpayers. Furthermore, it could create barriers for new or smaller companies seeking to enter the market.
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: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0002418R5399
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Rockwell Collins Australia PTY Limited
Address: 50 APPLE HILL DR, TEWKSBURY, MA, 01876
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: $119,906,096
Exercised Options: $119,906,096
Current Obligation: $117,643,375
Actual Outlays: $17,739,194
Subaward Activity
Number of Subawards: 33
Total Subaward Amount: $2,095,242
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2019-01-18
Current End Date: 2024-09-30
Potential End Date: 2024-09-30 00:00:00
Last Modified: 2025-09-30
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