Raytheon Company awarded $32.3M contract for torpedo components, with performance extending over 8 years

Contract Overview

Contract Amount: $32,309,168 ($32.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 1997-07-23

End Date: 2005-09-30

Contract Duration: 2,991 days

Daily Burn Rate: $10.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 199710!1700!9363!BZ006!NAVAL SEA SYSTEMS COMMAND !N0002497C6107 !A!*!* !19970723!19991231!007590276!147354161!005356613!N!01534!RAYTHEON COMPANY (INC) !6500 HARBOUR HEIGHTS PKWY !MUKILTEO !WA!98275!47735!061!53!MUKILTEO !SNOHOMISH !WASHINGTON!0001!+000030678719!Y!N!000000000000!1355!TORPEDO INERT COMPONENTS !A6 !AMMUNITION !2FTJ!MK46 TORPEDO LT WT ASW !3483!3!*!*!*!B!A!*!D !Y!J!1!001!N!1A!A!N!A!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: KEYPORT, KITSAP County, WASHINGTON, 98345

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $32.3 million to RAYTHEON COMPANY for work described as: 199710!1700!9363!BZ006!NAVAL SEA SYSTEMS COMMAND !N0002497C6107 !A!*!* !19970723!19991231!007590276!147354161!005356613!N!01534!RAYTHEON COMPANY (INC) !6500 HARBOUR HEIGHTS PKWY !MUKILTEO !WA!98275!47735!061!53!MUKILTEO !SNOHOM… Key points: 1. Contract value of $32.3 million for torpedo components indicates a significant investment in naval defense capabilities. 2. The award to Raytheon Company suggests a reliance on established defense contractors for critical ordnance. 3. A long performance period of nearly 8 years implies a need for sustained production and potential for follow-on work. 4. The firm-fixed-price contract type aims to provide cost certainty for the government, shifting risk to the contractor. 5. This contract likely supports the operational readiness of naval assets requiring specific torpedo components.

Value Assessment

Rating: fair

The contract value of $32.3 million for torpedo components appears reasonable given the specialized nature of defense matériel. Benchmarking against similar contracts for ordnance components is challenging without more specific details on the exact components and quantities. However, the duration of the contract (nearly 8 years) suggests a substantial scope of work that could justify this investment. The firm-fixed-price structure provides a degree of cost control for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating that the Naval Sea Systems Command likely identified Raytheon Company as the only responsible source capable of providing the required torpedo components. This could be due to proprietary technology, specialized manufacturing capabilities, or existing integration with current torpedo systems. The lack of competition means that the government did not benefit from price discovery through a bidding process.

Taxpayer Impact: Sole-source awards can potentially lead to higher prices for taxpayers as competitive pressures are absent. It also raises questions about whether alternative solutions or suppliers were adequately explored.

Public Impact

Naval forces benefit from the supply of critical components for torpedo systems, enhancing operational capabilities. The contract ensures the availability of specialized parts necessary for the maintenance and production of torpedoes. The geographic impact is primarily centered around Raytheon's facilities in Washington state, supporting local employment and industry. The contract supports a segment of the defense manufacturing workforce involved in ordnance production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially reduces value for taxpayer dollars.
Long contract duration could lead to cost overruns if not managed effectively.
Lack of transparency in the sole-source justification requires careful scrutiny.
Reliance on a single contractor may create supply chain vulnerabilities.

Positive Signals

Award to an established defense contractor like Raytheon suggests a high likelihood of meeting technical specifications.
Firm-fixed-price contract provides budget predictability.
Contract supports critical naval defense capabilities.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on ordnance and weapon systems. The market for torpedo components is highly specialized, dominated by a few key defense contractors with the necessary expertise and security clearances. Spending in this area is driven by naval modernization efforts and the need to maintain a robust fleet. Comparable spending benchmarks are difficult to establish due to the proprietary nature of such components, but significant investments are typical for advanced military hardware.

Small Business Impact

There is no indication of small business set-asides or subcontracting plans in the provided data. As a sole-source award to a large prime contractor, the direct impact on small businesses is likely minimal unless Raytheon voluntarily engages them for specific components or services.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Contract Management Agency (DCMA) and the Naval Sea Systems Command (NAVSEA). Accountability measures would include adherence to contract specifications, delivery schedules, and quality control. Transparency is limited due to the sole-source nature, but contract awards are generally reported in federal databases.

Related Government Programs

Naval Ordnance
Torpedo Systems
Defense Ammunition
Naval Sea Systems Command Contracts
Raytheon Defense Contracts

Risk Flags

Sole-source award lacks competitive pricing.
Long performance period may increase risk of cost escalation.
Limited public information on specific components and justification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.3 million to RAYTHEON COMPANY. 199710!1700!9363!BZ006!NAVAL SEA SYSTEMS COMMAND !N0002497C6107 !A!*!* !19970723!19991231!007590276!147354161!005356613!N!01534!RAYTHEON COMPANY (INC) !6500 HARBOUR HEIGHTS PKWY !MUKILTEO !WA!98275!47735!061!53!MUKILTEO !SNOHOMISH !WASHINGTON!0001!+000030678719!Y!N!000000000000!1355!TORPEDO INERT COMPONENTS !A6 !AMMUNITION !2FTJ!MK46 TORPEDO LT WT ASW !3483!3!*!*!*!B!A!*!D !Y!J!1!0

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 $32.3 million.

What is the period of performance?

Start: 1997-07-23. End: 2005-09-30.

What specific torpedo components are being procured under this contract?

The provided data indicates the contract is for 'TORPEDO INERT COMPONENTS' and falls under the PSC code 'AMMUNITION'. While the specific sub-components are not detailed, it is associated with the 'MK46 TORPEDO LT WT ASW' (Lightweight Anti-Submarine Warfare). This suggests the contract covers parts essential for the inert training or operational versions of the MK46 torpedo, likely including casings, fins, or other structural elements, but excluding explosive or guidance systems.

What is the historical spending pattern for similar torpedo components with Raytheon or other contractors?

Historical spending data for similar torpedo components is not directly available in the provided snippet. However, the current contract's value of $32.3 million over nearly 8 years suggests an average annual spend of approximately $4 million. To establish a broader pattern, one would need to analyze historical contracts for MK46 torpedo components and related ordnance from NAVSEA and other naval commands, looking at award values, contract types, and durations over several fiscal years. This would reveal trends in pricing, competition, and contractor reliance.

What are the key performance indicators (KPIs) for this contract, and how is performance being measured?

Specific Key Performance Indicators (KPIs) for this contract are not detailed in the provided data. However, typical KPIs for defense component contracts include adherence to technical specifications, quality control standards (e.g., defect rates), on-time delivery schedules, and compliance with safety regulations. Performance measurement would likely involve inspections, testing of components, and review of contractor reports by the Defense Contract Management Agency (DCMA) and the Naval Sea Systems Command (NAVSEA).

What is the justification for the sole-source award, and were any alternatives considered?

The justification for this sole-source award is not explicitly detailed in the provided data. However, sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For specialized defense components like torpedo parts, this often relates to proprietary technology, unique manufacturing capabilities, existing system integration, or national security concerns that limit the pool of potential contractors. The government would have had to document why full and open competition was not feasible or not in the government's best interest.

What is the potential impact of this contract on the broader anti-submarine warfare (ASW) capabilities of the US Navy?

This contract directly supports the US Navy's anti-submarine warfare (ASW) capabilities by ensuring the continued availability of components for the MK46 torpedo. The MK46 is a widely deployed lightweight torpedo used from various platforms, including helicopters and surface ships, for hunting submarines. By securing a steady supply of these components over an extended period, the Navy can maintain, repair, and potentially produce these vital ASW weapons, thereby sustaining its readiness and effectiveness against underwater threats.

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: RTX Corp

Address: 6500 HARBOUR HEIGHTS PKWY, MUKILTEO, WA, 98275

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline