DoD Awards Raytheon $19.2M for MH PDS Production, Lacking Competition
Contract Overview
Contract Amount: $19,190,356 ($19.2M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2024-11-19
End Date: 2027-05-10
Contract Duration: 902 days
Daily Burn Rate: $21.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: MH PDS PRODUCTION
Place of Performance
Location: POULSBO, KITSAP County, WASHINGTON, 98370
Plain-Language Summary
Department of Defense obligated $19.2 million to RAYTHEON COMPANY for work described as: MH PDS PRODUCTION Key points: 1. Significant award to Raytheon for critical MH PDS production. 2. Sole-source nature raises concerns about price discovery and value. 3. Long contract duration (902 days) with a firm fixed price. 4. Potential for higher costs due to lack of competitive bidding.
Value Assessment
Rating: questionable
The award of $19.2 million to Raytheon for MH PDS Production lacks a clear benchmark due to its sole-source nature. Without competitive bids, it's difficult to assess if this price is optimal compared to what could be achieved through open competition.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Raytheon. This limits price discovery and may result in higher costs for taxpayers as there was no competitive pressure to drive down prices.
Taxpayer Impact: Taxpayer funds may be used less efficiently due to the absence of competition, potentially leading to overpayment for the MH PDS production.
Public Impact
Ensures continued production of essential MH PDS systems for the Department of the Navy. Supports a major defense contractor, potentially impacting jobs and the defense industrial base. Highlights reliance on specific contractors for critical defense components. Raises questions about the long-term strategy for sourcing such vital equipment.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Long contract duration
Positive Signals
- Ensures critical system production
- Firm fixed price contract
Sector Analysis
The Department of Defense frequently awards large contracts for system and instrument manufacturing. This $19.2 million award falls within typical spending ranges for specialized defense components, but the lack of competition is a notable concern.
Small Business Impact
This contract was awarded to Raytheon Company, a large prime contractor. There is no indication that small businesses were involved as subcontractors or partners in this specific award, suggesting limited direct impact on the small business sector.
Oversight & Accountability
The sole-source nature of this contract warrants scrutiny from oversight bodies to ensure the Department of Defense is obtaining fair value. Future solicitations should prioritize competitive bidding where feasible to enhance 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 limits price competition.
- Potential for inflated costs due to lack of bidding.
- Long contract duration may not reflect evolving needs.
- Lack of transparency in the procurement process.
- Dependency on a single supplier for critical components.
Tags
search-detection-navigation-guidance-aer, department-of-defense, wa, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $19.2 million to RAYTHEON COMPANY. MH PDS PRODUCTION
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 $19.2 million.
What is the period of performance?
Start: 2024-11-19. End: 2027-05-10.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Agencies are still required to conduct price analyses, such as comparing historical prices, using cost breakdowns, or benchmarking against similar items, to ensure fair and reasonable pricing even without competition.
What are the long-term risks associated with relying on a sole-source provider for critical defense systems like the MH PDS?
Long-term risks include potential price escalation without competitive pressure, reduced innovation due to lack of market alternatives, and supply chain vulnerability if the sole provider faces financial or operational difficulties. It can also stifle the development of alternative technologies or competing suppliers within the defense industrial base.
How does this contract contribute to the overall effectiveness and readiness of the Navy's MH systems?
This contract directly ensures the continued availability and production of the MH PDS, which are crucial for the operational effectiveness and readiness of the Navy's MH platforms. Consistent supply of these systems is vital for maintaining mission capability and supporting ongoing operations.
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: N0002424R6303
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Rockwell Collins Australia PTY Limited
Address: 26285 TWELVE TREES LN NW STE 161, POULSBO, WA, 98370
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: $28,452,471
Exercised Options: $22,354,009
Current Obligation: $19,190,356
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2024-11-19
Current End Date: 2027-05-10
Potential End Date: 2027-05-10 00:00:00
Last Modified: 2025-09-26
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