Raytheon awarded $794M for fire control radar equipment, with a 1999 start date and 2005 completion

Contract Overview

Contract Amount: $50,769,193 ($50.8M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 1999-07-22

End Date: 2013-03-29

Contract Duration: 4,999 days

Daily Burn Rate: $10.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 199910!1700!3486!BZ005!NAVAL SEA SYSTEMS COMMAND !N0002499C5387 !A!*!* !19990722!20050630!794598573!001339159!001339159!N!15090!RAYTHEON SYSTEMS CO (INC) !1151 E HERMANS RD !TUCSON !AZ!85706!57700!005!44!PORTSMOUTH !NEWPORT !RHODE ISLD!0001!+000014158782!Y!N!000000000000!1285!FIRE CONTROL RADAR EQUIP, EXCEPT AIRBORNE !A3 !SHIPS !2CMN!RIM-66 STANDARD MISSILE(MED) !3761!1!*!*!*!B!A!*!D !U!J!1!001!N!1G!A!Y!A!A !KS!N!C!*!A!A!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: SUDBURY, MIDDLESEX County, MASSACHUSETTS, 01776

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $50.8 million to RAYTHEON COMPANY for work described as: 199910!1700!3486!BZ005!NAVAL SEA SYSTEMS COMMAND !N0002499C5387 !A!*!* !19990722!20050630!794598573!001339159!001339159!N!15090!RAYTHEON SYSTEMS CO (INC) !1151 E HERMANS RD !TUCSON !AZ!85706!57700!005!44!PORTSMOUTH !NEWPOR… Key points: 1. Contract awarded for essential fire control radar equipment, indicating a critical defense need. 2. The contract was not competed, raising questions about potential cost efficiencies and market exploration. 3. A long performance period suggests a complex or ongoing requirement for the radar systems. 4. The award to Raytheon Systems Co. highlights a significant sole-source supplier relationship. 5. The contract value of over $794 million signifies a substantial investment in naval defense capabilities.

Value Assessment

Rating: fair

The contract value of $794,598,573 for fire control radar equipment is substantial. Without comparable sole-source contracts or detailed cost breakdowns, a precise value-for-money assessment is challenging. However, the lack of competition suggests a potential for higher pricing than if the contract had been openly competed. Benchmarking against similar sole-source awards for specialized defense equipment would be necessary for a more definitive evaluation.

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 Systems Co., was solicited. This approach is typically used when a unique capability or proprietary technology is required, or in cases of urgent need where competition is not feasible. The lack of competition limits price discovery and may result in less favorable pricing for the government compared to an open market scenario.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. The government did not benefit from the potential cost savings that can arise from multiple vendors vying for the contract.

Public Impact

The U.S. Navy benefits from the acquisition of critical fire control radar equipment for its fleet. This contract supports the operational readiness and defensive capabilities of naval vessels. The contract likely impacts a specialized segment of the defense manufacturing workforce involved in radar systems. Geographic impact is concentrated around Raytheon's facilities in Tucson, Arizona, and potentially naval bases where the equipment is deployed.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
Long contract duration could indicate potential for cost overruns or scope creep if not managed tightly.
Lack of transparency in the sole-source justification process can obscure the true necessity and value.
Dependence on a single supplier for critical defense components poses a long-term strategic risk.

Positive Signals

Award to a known defense contractor like Raytheon suggests a level of established capability and reliability.
The contract addresses a specific and critical defense need for fire control radar.
The firm fixed-price nature of the contract provides some cost certainty for the government.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on electronic warfare and radar systems. The market for such specialized defense equipment is often characterized by a limited number of highly capable contractors. Spending in this area is driven by national security requirements and technological advancements in military hardware. Comparable spending benchmarks would typically be found within the broader naval shipbuilding and modernization budgets.

Small Business Impact

There is no indication from the provided data that this contract involved small business set-asides or significant subcontracting opportunities for small businesses. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless Raytheon actively engages small businesses in its supply chain for this specific contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy and the Department of Defense. Accountability measures would include contract performance monitoring, milestone reviews, and financial audits. Transparency is limited due to the sole-source nature, but contract awards are generally reported in federal procurement databases. Inspector General offices within the DoD may conduct audits or investigations if specific concerns arise regarding contract execution or pricing.

Related Government Programs

Naval Ship Systems
Missile Systems
Defense Electronics
Radar Technology
Naval Warfare Systems

Risk Flags

Sole-source award
Lack of competition
Potential for higher pricing
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $50.8 million to RAYTHEON COMPANY. 199910!1700!3486!BZ005!NAVAL SEA SYSTEMS COMMAND !N0002499C5387 !A!*!* !19990722!20050630!794598573!001339159!001339159!N!15090!RAYTHEON SYSTEMS CO (INC) !1151 E HERMANS RD !TUCSON !AZ!85706!57700!005!44!PORTSMOUTH !NEWPORT !RHODE ISLD!0001!+000014158782!Y!N!000000000000!1285!FIRE CONTROL RADAR EQUIP, EXCEPT AIRBORNE !A3 !SHIPS !2CMN!RIM-66 STANDARD MISSILE(MED) !3761!1!*!*!*!B!A!*!D !U!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 (Department of the Navy).

What is the total obligated amount?

The obligated amount is $50.8 million.

What is the period of performance?

Start: 1999-07-22. End: 2013-03-29.

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

Raytheon, now RTX, has a long history of securing sole-source contracts with the U.S. Department of Defense, particularly for advanced defense systems like radar, missiles, and electronic warfare equipment. These awards are often based on the company's established technological expertise, existing production lines, and the specialized nature of the defense requirements. While sole-source awards can streamline procurement for critical or unique capabilities, they also necessitate robust government oversight to ensure fair pricing and prevent potential cost overruns. Analyzing Raytheon's performance on other sole-source contracts, including any past issues with cost, schedule, or quality, would provide further context for this specific award.

How does the $794 million contract value compare to other fire control radar procurements?

The $794 million contract value is substantial and reflects a significant investment in fire control radar systems. To benchmark this value, one would need to compare it against other sole-source or competed contracts for similar radar equipment procured by the Navy or other military branches around the same period (late 1990s/early 2000s). Factors such as the specific type of radar (e.g., phased array, tracking), its capabilities (e.g., range, target acquisition), the quantity ordered, and the inclusion of support services (like training or maintenance) would influence the price. Without access to a database of comparable contract values adjusted for inflation and system complexity, it's difficult to definitively state if this represents a high or low cost per unit or overall.

What are the primary risks associated with a sole-source award of this magnitude?

The primary risks associated with a sole-source award of this magnitude include potential overpricing due to the lack of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and a heightened dependence on a single supplier for critical defense capabilities. There's also a risk of scope creep or cost overruns if the contract terms are not tightly managed. Furthermore, if the sole-source justification is weak or if alternative solutions exist, it could represent a suboptimal use of taxpayer funds. The government must implement rigorous oversight, including detailed cost analysis and performance monitoring, to mitigate these risks.

How effective are fire control radar systems in enhancing naval combat capabilities?

Fire control radar systems are absolutely critical for modern naval combat capabilities. They are responsible for detecting, tracking, and guiding weapons systems (like missiles and guns) towards targets, whether they are airborne, surface, or land-based. Advanced fire control radars enable ships to engage multiple threats simultaneously, provide early warning, and improve the accuracy and effectiveness of defensive and offensive weapon systems. The specific system procured under this contract, RIM-66 Standard Missile (Medium), is a key component of naval air defense, highlighting the direct impact of this contract on the Navy's ability to protect itself and project power.

What were the historical spending patterns for fire control radar equipment prior to this award?

Prior to this $794 million award in 1999, historical spending patterns for fire control radar equipment would have been influenced by the defense priorities and technological landscape of the preceding decades. The Cold War era, for instance, saw significant investment in advanced radar and missile defense systems. Spending would likely have fluctuated based on geopolitical tensions, the introduction of new threats (like advanced aircraft or anti-ship missiles), and the lifecycle of existing naval platforms. Analyzing procurement data from the 1980s and early 1990s would reveal trends in the types of systems procured, the primary contractors, and the overall budget allocated to naval radar and combat systems.

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline