Raytheon Missile Systems Awarded $79.5M for Engineering Technical Services by Naval Sea Systems Command

Contract Overview

Contract Amount: $50,263,268 ($50.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 1998-04-06

End Date: 2004-09-30

Contract Duration: 2,369 days

Daily Burn Rate: $21.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 199807!1700!2243!BZ005!NAVAL SEA SYSTEMS COMMAND !N0002498C5425 !A!*!BASIC !19980406!19990930!794598573!794598573!001339159!N!15090!RAYTHEON MISSILE SYSTEMS COMPA!1151 E HERMANS RD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA !ARIZONA !0001!+000002678898!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A2 !MISSILE AND SPACE SYSTEMS !2000!NOT DISCERNABLE OR CLASSIFIED !3761!3!*!*!*!B!N!Z!B !U!U!1!001!N!4A!A!Y!Z!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $50.3 million to RAYTHEON COMPANY for work described as: 199807!1700!2243!BZ005!NAVAL SEA SYSTEMS COMMAND !N0002498C5425 !A!*!BASIC !19980406!19990930!794598573!794598573!001339159!N!15090!RAYTHEON MISSILE SYSTEMS COMPA!1151 E HERMANS RD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA … Key points: 1. Contract awarded to Raytheon Missile Systems for engineering and technical services. 2. The contract value is $79,459,857.00, with a period of performance from April 1998 to September 1999. 3. This was a 'Not Competed' contract, raising questions about potential price discovery. 4. The sector is Defense, specifically missile and space systems. 5. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns.

Value Assessment

Rating: questionable

The contract value of $79.5 million for engineering technical services is substantial. Without comparable contracts or detailed cost breakdowns, it's difficult to definitively assess its value. However, the Cost Plus Fixed Fee structure warrants scrutiny for potential inefficiencies.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was 'Not Competed,' indicating a limited competition scenario. This method may not have resulted in the most favorable pricing for the government, as alternative vendors were not solicited.

Taxpayer Impact: The lack of full and open competition could mean taxpayers paid more than necessary for these services.

Public Impact

Defense spending on critical missile systems ensures national security capabilities. Raytheon's role as a major defense contractor supports jobs and technological advancement in the aerospace sector. The use of Cost Plus Fixed Fee contracts can sometimes lead to increased costs for taxpayers if not closely managed. The specific nature of 'engineering technical services' for missile systems suggests highly specialized and potentially sensitive work.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition raises concerns about price reasonableness.
Cost Plus Fixed Fee contract type can incentivize cost overruns.
Long contract duration (2369 days) increases exposure to potential issues.

Positive Signals

Awarded to a known defense contractor with relevant expertise.
Supports critical defense capabilities for the Navy.

Sector Analysis

This contract falls within the Defense sector, specifically related to missile and space systems. Spending in this area is crucial for national security, but often involves complex, high-cost procurements with specialized contractors like Raytheon.

Small Business Impact

The data does not indicate any specific provisions or awards to small businesses for this contract. The primary awardee is a large corporation, suggesting limited direct impact on small business participation.

Oversight & Accountability

The 'Not Competed' designation suggests a potential gap in competitive oversight. Robust oversight would be necessary to ensure cost controls and performance standards are met under the Cost Plus Fixed Fee structure.

Related Government Programs

Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competition
Cost Plus Fixed Fee contract type
Potential for cost overruns
Limited transparency on justification for sole-sourcing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $50.3 million to RAYTHEON COMPANY. 199807!1700!2243!BZ005!NAVAL SEA SYSTEMS COMMAND !N0002498C5425 !A!*!BASIC !19980406!19990930!794598573!794598573!001339159!N!15090!RAYTHEON MISSILE SYSTEMS COMPA!1151 E HERMANS RD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA !ARIZONA !0001!+000002678898!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A2 !MISSILE AND SPACE SYSTEMS !2000!NOT DISCERNABLE OR CLASSIFIED !3761!3!*!*!*!B!N!Z!B !U!U!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 $50.3 million.

What is the period of performance?

Start: 1998-04-06. End: 2004-09-30.

What specific engineering technical services were provided under this contract, and how do they align with the Naval Sea Systems Command's mission requirements?

The contract was for 'ENGINEERING TECHNICAL SERVICES' related to 'MISSILE AND SPACE SYSTEMS.' These services likely encompassed design, development, testing, integration, and sustainment engineering for naval missile platforms. They are critical for maintaining and advancing the Navy's offensive and defensive capabilities, ensuring operational readiness and technological superiority in a constantly evolving threat landscape.

Given the 'Not Competed' status, what justification was provided for limiting competition, and what measures were in place to ensure a fair price?

The justification for limiting competition is not detailed in the provided data. Typically, 'Not Competed' implies a sole-source or limited source justification, such as unique capabilities, urgent need, or follow-on work. Without this justification, it's impossible to assess if a fair price was achieved through adequate negotiation or market research.

How effectively did the Cost Plus Fixed Fee structure manage costs and incentivize performance for Raytheon Missile Systems over the contract's extended period?

The Cost Plus Fixed Fee (CPFF) structure aims to cover costs plus a fixed fee, incentivizing the contractor to control costs to maximize profit. However, CPFF contracts can lead to cost growth if the initial cost estimates are inaccurate or if scope creep occurs. Effective oversight is crucial to monitor spending and ensure performance targets are met within the negotiated fee.

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: RTX Corp

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline