Raytheon Company awarded $49M contract for MK114 Evolved Test Set, supporting missile and space vehicle parts

Contract Overview

Contract Amount: $49,042,033 ($49.0M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2023-12-20

End Date: 2025-05-31

Contract Duration: 528 days

Daily Burn Rate: $92.9K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MK114 EVOLVED TEST SET CONFIGURED TO MK5

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $49.0 million to RAYTHEON COMPANY for work described as: MK114 EVOLVED TEST SET CONFIGURED TO MK5 Key points: 1. Contract value of $49.04 million for specialized test equipment. 2. Sole-source award indicates limited market availability or specific contractor expertise. 3. Performance period extends over 528 days, suggesting a complex or lengthy development/delivery cycle. 4. Firm Fixed Price contract type shifts cost risk to the contractor. 5. Delivery order awarded under a larger contract vehicle, details of which are not provided. 6. Geographic location of performance is Arizona.

Value Assessment

Rating: fair

The contract value of $49.04 million for a specialized test set appears to be within a reasonable range for complex defense systems, though direct comparisons are difficult without more detail on the specific capabilities of the MK114 Evolved Test Set. The Firm Fixed Price contract type is generally favorable for the government, as it caps potential cost overruns. However, the lack of competitive bidding raises concerns about whether the government secured the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Raytheon Company, was considered. This typically occurs when a product or service is unique and only available from a single source, or when there are urgent needs that preclude full and open competition. The lack of competition limits the government's ability to leverage market forces to achieve the lowest possible price and may indicate a reliance on a specific incumbent or proprietary technology.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as there is no competitive pressure to drive down costs. This limits the government's ability to explore alternative solutions or negotiate more favorable terms.

Public Impact

The primary beneficiaries are likely the Department of the Navy and potentially other branches of the Department of Defense requiring advanced missile and space vehicle testing capabilities. The contract delivers a critical component: the MK114 Evolved Test Set, essential for ensuring the functionality and reliability of guided missile and space vehicle systems. Performance is located in Arizona, potentially supporting local jobs and the defense industrial base in that region. The contract supports specialized manufacturing and technical roles within Raytheon Company and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential taxpayer savings.
Lack of detailed technical specifications for the test set makes independent value assessment challenging.
Contract awarded as a delivery order, obscuring the details of the parent contract vehicle.
Limited information on contractor past performance specifically for this type of test set.

Positive Signals

Firm Fixed Price contract type provides cost certainty for the government.
Award to Raytheon Company, a major defense contractor with established capabilities.
Contract supports critical defense testing infrastructure for missile and space vehicles.

Sector Analysis

This contract falls within the 'Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing' sector. This is a highly specialized niche within the broader aerospace and defense industry, characterized by high barriers to entry, significant R&D investment, and long product development cycles. Spending in this sector is driven by national security requirements and technological advancements in defense systems. Comparable spending benchmarks are difficult to establish due to the unique nature of test equipment, but it is generally a high-cost, low-volume market.

Small Business Impact

This contract does not appear to have a small business set-aside (ss=false, sb=false). As a sole-source award to a large prime contractor, Raytheon Company, there are no direct subcontracting opportunities mandated for small businesses within this specific award. However, Raytheon may engage small businesses in its broader supply chain for components or services related to this test set, but this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a Firm Fixed Price contract, financial oversight focuses on ensuring deliverables meet specifications. Transparency is limited due to the sole-source nature and the fact it's a delivery order under a potentially unstated parent contract. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Guided Missile and Space Vehicle Manufacturing
Defense Test and Evaluation Equipment
Department of the Navy Procurement
Aerospace Parts Manufacturing

Risk Flags

Sole Source Justification
Lack of Competition
Limited Transparency (Delivery Order)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $49.0 million to RAYTHEON COMPANY. MK114 EVOLVED TEST SET CONFIGURED TO MK5

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 $49.0 million.

What is the period of performance?

Start: 2023-12-20. End: 2025-05-31.

What is the specific functionality and technical capability of the MK114 Evolved Test Set?

The provided data indicates the MK114 Evolved Test Set is configured to the 'MK114 EVOLVED TEST SET CONFIGURED TO MK5'. This suggests it is a specialized piece of equipment designed for testing and validating components or systems related to the MK114 (likely a missile system) and potentially configured for a 'MK5' variant or standard. Its exact technical specifications, such as the types of tests it can perform, the parameters it measures, its accuracy, and its integration capabilities with other systems, are not detailed in the provided data. Such test sets are crucial for ensuring the reliability, performance, and safety of complex defense hardware before deployment.

Why was this contract awarded on a sole-source basis instead of through full and open competition?

The contract was awarded on a sole-source basis ('NOT AVAILABLE FOR COMPETITION') because it is likely that Raytheon Company is the only entity capable of providing this specific 'MK114 Evolved Test Set configured to MK5'. This could be due to proprietary technology, unique manufacturing processes, specialized expertise held by Raytheon, or because the test set is an integral part of a larger, proprietary system for which Raytheon is the sole provider. Without further justification from the awarding agency, it's presumed that fulfilling the requirement through full and open competition was deemed impractical or impossible at the time of award.

How does the $49 million contract value compare to similar test equipment procurements?

Directly comparing the $49.04 million contract value for the MK114 Evolved Test Set is challenging without more specific details on its capabilities and the scope of work. Specialized defense test equipment can vary significantly in cost based on complexity, technological sophistication, and the systems they are designed to support. However, for highly specialized, mission-critical test sets used in missile and space vehicle programs, a value in the tens of millions of dollars is not uncommon. The lack of competition means this price is not benchmarked against market alternatives, making a definitive value-for-money assessment difficult based solely on the provided data.

What are the potential risks associated with a sole-source award for critical defense equipment?

The primary risk associated with a sole-source award for critical defense equipment like the MK114 Evolved Test Set is the potential for inflated pricing due to the absence of competitive bidding. Taxpayers may end up paying more than necessary. Additionally, sole-source awards can foster vendor lock-in, making it difficult and costly to switch to alternative solutions or suppliers in the future. There's also a reduced incentive for the sole provider to innovate or improve efficiency if they face no direct competition. This can also limit opportunities for other capable companies to enter the market and develop competing technologies.

What is Raytheon Company's track record in manufacturing similar defense test equipment?

Raytheon Company is a major defense contractor with extensive experience in developing and manufacturing a wide array of complex systems, including missile systems, radar, and other advanced defense technologies. While specific details on their track record for the 'MK114 Evolved Test Set configured to MK5' are not provided, their established presence and capabilities in the defense sector suggest they possess the necessary expertise. Their history includes numerous contracts for sophisticated hardware and associated testing and support equipment, indicating a general competency in this domain. However, the specific performance and value delivered on this particular contract would require a deeper dive into project-specific data.

What is the expected impact of this contract on the defense industrial base in Arizona?

The contract specifies performance in Arizona (st='AZ', sn='ARIZONA'), indicating that a portion of the $49.04 million will be spent within the state. This likely supports Raytheon's existing facilities or potentially involves local subcontractors. Such contracts contribute to the defense industrial base by sustaining specialized manufacturing capabilities, supporting high-skilled jobs in engineering and production, and reinforcing the region's role in national security supply chains. The presence of significant defense contracts can also attract further investment and technological development within the state's aerospace and defense sector.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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: $49,042,033

Exercised Options: $49,042,033

Current Obligation: $49,042,033

Subaward Activity

Number of Subawards: 34

Total Subaward Amount: $20,808,786

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002421G5421

IDV Type: BOA

Timeline