Raytheon Company awarded $16.8M for CAP BANK IN SUPPORT OF DBR, a sole-source contract

Contract Overview

Contract Amount: $16,854,730 ($16.9M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2020-05-01

End Date: 2024-08-10

Contract Duration: 1,562 days

Daily Burn Rate: $10.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: CAP BANK IN SUPPORT OF DBR

Place of Performance

Location: TEWKSBURY, MIDDLESEX County, MASSACHUSETTS, 01876

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $16.9 million to RAYTHEON COMPANY for work described as: CAP BANK IN SUPPORT OF DBR Key points: 1. Contract awarded to a single vendor suggests potential lack of competitive pricing pressure. 2. The contract type (Cost Plus Fixed Fee) can incentivize cost overruns. 3. Long duration of over 4 years indicates a significant, ongoing need. 4. The specific product/service is tied to navigation and guidance systems. 5. The award is a delivery order under a larger contract vehicle. 6. No small business set-aside was applied to this specific award.

Value Assessment

Rating: fair

Benchmarking the value of this $16.8M contract is challenging without more specific details on the 'CAP BANK' and its function. However, the Cost Plus Fixed Fee (CPFF) contract type, while common for R&D or uncertain scope, carries inherent risk of cost escalation. Comparing it to similar sole-source awards for specialized defense components would be necessary for a more precise value assessment. The fixed fee component provides some cost control, but the primary cost driver remains the actual expenses incurred by the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the requirement. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices through market forces.

Taxpayer Impact: Sole-source awards limit opportunities for other businesses and can potentially lead to higher prices for taxpayers compared to competitively bid contracts.

Public Impact

The Department of Defense is the primary beneficiary, receiving support for its DBR (likely a specific program or system). The contract supports the manufacturing and supply of components for search, detection, navigation, guidance, aeronautical, and nautical systems. The geographic impact is primarily tied to the contractor's operations in Massachusetts. Workforce implications are likely within Raytheon's engineering and manufacturing divisions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
CPFF contract type carries risk of cost overruns.
Long contract duration may indicate potential for scope creep.
Lack of small business participation noted.

Positive Signals

Award to an established defense contractor (Raytheon) suggests technical capability.
Delivery order under an existing contract vehicle may indicate streamlined procurement.
Fixed fee component provides some cost predictability.

Sector Analysis

This contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector, a critical component of the defense industrial base. The market for such specialized systems is often dominated by a few large, established defense contractors due to high R&D costs and stringent performance requirements. Spending in this sector is heavily influenced by defense budgets and technological advancements.

Small Business Impact

This specific award was not set aside for small businesses, nor does it indicate any subcontracting requirements for small businesses. The prime contractor, Raytheon Company, is a large aerospace and defense firm. The absence of small business participation in this particular contract means that opportunities within this specific award are not being directed towards the small business ecosystem.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The specific contract type (CPFF) necessitates close monitoring of costs and progress. Transparency is generally maintained through contract reporting mechanisms, though detailed public disclosure of specific technical aspects may be limited due to national security considerations.

Related Government Programs

Defense Navigation Systems
Aeronautical and Nautical Instruments
Search and Detection Systems
Guidance Systems Manufacturing
Department of Defense Procurement

Risk Flags

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

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.9 million to RAYTHEON COMPANY. CAP BANK IN SUPPORT OF DBR

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 $16.9 million.

What is the period of performance?

Start: 2020-05-01. End: 2024-08-10.

What is the specific function and importance of the 'CAP BANK IN SUPPORT OF DBR'?

The exact nature of 'CAP BANK IN SUPPORT OF DBR' is not fully detailed in the provided data. 'CAP BANK' could refer to a power supply unit, a capacitor bank, or a financial reserve, while 'DBR' likely represents a specific Department of Defense program, system, or initiative. Given the contractor's industry (Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing), it is probable that this 'CAP BANK' is a critical component or subsystem integral to the operation, testing, or maintenance of advanced defense electronics, potentially related to radar, sonar, or flight control systems. Its importance lies in ensuring the reliable functioning of these vital defense assets, contributing to national security capabilities.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other pricing arrangements for similar defense systems?

Cost Plus Fixed Fee (CPFF) contracts are often used when the scope of work is not precisely defined or involves research and development, making it difficult to estimate costs accurately upfront. In a CPFF contract, the contractor is reimbursed for allowable costs plus a predetermined fixed fee representing profit. This contrasts with Fixed Price contracts, where the contractor agrees to a set price regardless of actual costs, offering greater cost certainty to the government but potentially higher risk for the contractor. Cost Plus Incentive Fee (CPIF) contracts, another alternative, include incentives for the contractor to meet or exceed cost, schedule, or performance targets. For established systems with well-defined requirements, Fixed Price contracts are generally preferred for better cost control. However, for novel or complex defense technologies like those potentially involving 'CAP BANK', CPFF can be a necessary mechanism to encourage innovation and contractor engagement despite inherent cost uncertainties.

What is Raytheon Company's track record with sole-source defense contracts?

Raytheon Company, now part of RTX Corporation, has a long history of securing defense contracts, many of which are sole-source due to the specialized nature of its products and its position as a prime defense contractor. The company frequently receives sole-source awards for advanced missile systems, radar technology, and other complex defense electronics where it holds proprietary technology or is one of very few capable suppliers. While sole-source awards can raise concerns about price competition, they are often justified by the unique capabilities and critical national security functions Raytheon provides. Government accountability mechanisms, such as contract audits and oversight by agencies like the Defense Contract Management Agency (DCMA), are in place to manage these awards. Raytheon's extensive experience and established relationships within the defense sector contribute to its frequent selection for sole-source procurements.

What are the potential risks associated with a sole-source award for navigation and guidance systems?

The primary risk associated with a sole-source award for critical systems like navigation and guidance is the potential for inflated pricing due to the lack of competitive bidding. Without competing offers, the government may not achieve the best possible price. Furthermore, sole-source awards can reduce the incentive for the contractor to innovate or improve efficiency, as there is no direct market pressure from competitors. There's also a risk of vendor lock-in, where the government becomes dependent on a single supplier, potentially limiting future flexibility and options. For specialized defense systems, these risks are often weighed against the necessity of acquiring unique, high-performance technology from a proven provider, but robust oversight remains crucial.

How does this contract's duration (1562 days) compare to typical contract lengths for similar defense components?

A duration of 1562 days, approximately 4.3 years, is relatively long for a single contract, especially for components. Typical contract lengths for specific components can vary significantly based on the item's complexity, lifecycle, and the nature of the requirement (e.g., sustainment vs. development). For highly specialized, integrated systems or ongoing support services for complex defense platforms, multi-year contracts are common to ensure continuity and manage program lifecycles effectively. However, for individual components, shorter contract durations or multiple competitive awards over time might be more typical to allow for market adjustments and technology refreshes. The extended duration here suggests this 'CAP BANK' is either a critical, long-lifecycle component or part of a larger sustainment or development effort where continuity is paramount.

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

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: $16,883,180

Exercised Options: $16,883,180

Current Obligation: $16,854,730

Subaward Activity

Number of Subawards: 62

Total Subaward Amount: $9,414,288

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002418G5501

IDV Type: BOA

Timeline