DoD Navy awards Raytheon $67.5M for Navigation Systems, a follow-on to a competed action
Contract Overview
Contract Amount: $67,497,354 ($67.5M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2001-10-31
End Date: 2006-12-31
Contract Duration: 1,887 days
Daily Burn Rate: $35.8K/day
Competition Type: FOLLOW ON TO COMPETED ACTION
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Place of Performance
Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245, UNITED STATES OF AMERICA
Plain-Language Summary
Department of Defense obligated $67.5 million to RAYTHEON COMPANY for work described as: Key points: 1. Significant contract value of $67.5 million awarded to a major defense contractor. 2. Follow-on nature suggests potential for continued reliance on Raytheon for these systems. 3. Fixed Price Incentive contract type introduces risk if costs exceed projections. 4. Sector focus on Navigation Systems is critical for military operations.
Value Assessment
Rating: fair
The contract value of $67.5 million for navigation systems appears substantial. Without specific per-unit cost data or comparison to similar systems, it's difficult to definitively assess its value. The fixed-price incentive structure suggests an attempt to control costs, but the final price is subject to performance.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract is a 'FOLLOW ON TO COMPETED ACTION,' indicating that while the original action was competed, this follow-on may have limited competition. This could impact price discovery if the follow-on is not re-competed or if the original competition did not yield the most competitive pricing for future needs.
Taxpayer Impact: The taxpayer impact is moderate, with $67.5 million allocated for critical navigation systems. The effectiveness of the competition method will determine if this represents optimal value for the funds expended.
Public Impact
Ensures continued availability of essential navigation and guidance systems for naval operations. Supports a major defense contractor, potentially impacting jobs and technological development in the sector. The fixed-price incentive contract type requires careful monitoring to ensure cost efficiency.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Follow-on contract may limit future competition.
- Fixed Price Incentive contract can lead to cost overruns.
- Lack of detailed cost breakdown makes value assessment difficult.
Positive Signals
- Addresses critical need for navigation systems.
- Contract awarded to a known entity with established capabilities.
- Follow-on to a competed action suggests prior vetting.
Sector Analysis
This contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector. Spending in this area is crucial for national defense, with benchmarks often driven by technological advancement and specific military requirements rather than purely commercial metrics.
Small Business Impact
The data indicates the award went to Raytheon Company, a large business. There is no direct indication of small business participation in this specific award, suggesting that opportunities for small businesses may lie in subcontracting roles or in future competed actions within this domain.
Oversight & Accountability
The 'FOLLOW ON TO COMPETED ACTION' designation suggests some level of prior oversight. However, the fixed-price incentive structure necessitates ongoing monitoring of performance and costs to ensure accountability and prevent potential overspending by the contractor.
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
- Potential for limited competition on follow-on actions.
- Cost overruns possible under Fixed Price Incentive contract.
- Lack of transparency on original competed action details.
- Dependence on a single contractor for critical systems.
Tags
search-detection-navigation-guidance-aer, department-of-defense, ca, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $67.5 million to RAYTHEON COMPANY. See the official description on USAspending.
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 $67.5 million.
What is the period of performance?
Start: 2001-10-31. End: 2006-12-31.
What was the outcome of the original competed action, and did it establish a competitive baseline for this follow-on?
The original competed action likely established a baseline for the technology and pricing. However, without details on the original competition's results (e.g., number of bidders, price differences), it's hard to ascertain if this follow-on truly leverages that competition for optimal pricing. A follow-on can sometimes reduce competitive pressure if the original winner is the only viable option.
How effectively does the Fixed Price Incentive (FPI) contract structure mitigate cost risks for the government in this specific award?
The FPI contract aims to incentivize cost control by sharing cost savings or overruns between the government and contractor. Its effectiveness here depends on the negotiated target cost, ceiling price, and share ratio. If Raytheon significantly exceeds the target cost, the government's exposure increases, requiring diligent oversight to manage potential cost escalations.
What is the long-term strategic value of this navigation system contract beyond its immediate operational need?
This contract ensures the continued operational readiness of naval assets requiring these specific navigation systems. Strategically, it may also foster innovation in navigation technology through Raytheon's development efforts. The long-term value hinges on the system's reliability, adaptability to future threats, and potential for integration with next-generation platforms.
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: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: FOLLOW ON TO COMPETED ACTION
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Address: 2000 E IMPERIAL HWY, EL SEGUNDO, CA, 90245
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2001-10-31
Current End Date: 2006-12-31
Potential End Date: 2009-09-30 00:00:00
Last Modified: 2015-09-23
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