Raytheon Company awarded $108M for Subhdr Antenna Systems by the Department of the Navy

Contract Overview

Contract Amount: $108,183,993 ($108.2M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2015-04-20

End Date: 2019-11-30

Contract Duration: 1,685 days

Daily Burn Rate: $64.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SUBHDR ANTENNA SYSTEMS

Place of Performance

Location: MARLBOROUGH, MIDDLESEX County, MASSACHUSETTS, 01752

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $108.2 million to RAYTHEON COMPANY for work described as: SUBHDR ANTENNA SYSTEMS Key points: 1. Contract awarded as a definitive contract with a firm fixed price. 2. The contract duration was 1685 days, spanning from April 2015 to November 2019. 3. This contract was not competed, raising questions about potential price discovery. 4. The North American Industry Classification System (NAICS) code is 334511, related to navigation system manufacturing. 5. The contract was awarded to a single entity, Raytheon Company. 6. The contract was not set aside for small businesses.

Value Assessment

Rating: questionable

The total award amount of $108,183,993 for Subhdr Antenna Systems over approximately 4.6 years represents a significant investment. Without comparable contract data or detailed cost breakdowns, it is difficult to definitively benchmark the value for money. The firm fixed price structure suggests an attempt to control costs, but the lack of competition limits the ability to assess if the pricing was optimal compared to market alternatives. The contract's value, relative to the complexity and criticality of antenna systems for naval operations, warrants further scrutiny to ensure taxpayer funds were utilized efficiently.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, technology, or security clearances. However, the lack of competition means there was no opportunity for price negotiation or comparison against other potential suppliers, which could lead to higher costs for the government. The absence of a competitive bidding process limits transparency in pricing and may not reflect the best available market value.

Taxpayer Impact: The sole-source nature of this award means taxpayers may have paid a premium due to the absence of competitive pressure to lower prices. Without a bidding process, it's harder to ensure the government received the most cost-effective solution.

Public Impact

The Department of the Navy is the primary beneficiary, receiving advanced antenna systems crucial for its operations. The contract supports the development and delivery of search, detection, navigation, guidance, and related systems. The contract's geographic impact is primarily within Massachusetts, where Raytheon Company is located. The contract likely supported specialized engineering, manufacturing, and technical roles within Raytheon and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have resulted in inflated pricing.
Sole-source awards can limit innovation by not exploring alternative solutions from other vendors.
The long duration of the contract without re-competition could lead to complacency in performance or cost management.

Positive Signals

Firm fixed price contract provides cost certainty for the government.
Award to a large, established defense contractor like Raytheon suggests a focus on proven capabilities and reliability.
The contract was for a specific system (Subhdr Antenna Systems), indicating a targeted procurement.

Sector Analysis

The defense electronics sector, particularly navigation and guidance systems, is characterized by high barriers to entry due to specialized technology, stringent quality requirements, and significant R&D investment. Companies like Raytheon are major players in this market, often holding proprietary technologies. The market size for such specialized systems is driven by defense budgets and technological advancements. This contract fits within the broader category of defense systems manufacturing, where spending is often concentrated among a few large prime contractors.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting plans specifically targeting small businesses. The award to a large prime contractor like Raytheon suggests that the primary contract work was likely performed internally or through established large-scale supply chains, potentially limiting direct opportunities for small businesses on this specific award. Further investigation into Raytheon's subcontracting reports would be needed to assess any indirect impact.

Oversight & Accountability

The oversight for this contract would fall under the Department of the Navy's contracting and program management offices. As a definitive contract, it would be subject to standard government oversight procedures, including performance monitoring and financial audits. The firm fixed price nature provides a degree of cost control. However, the lack of competition means oversight would focus more on performance and delivery against the agreed-upon terms rather than on ensuring competitive pricing.

Related Government Programs

Naval radar systems procurement
Defense electronics manufacturing
Guidance and navigation system development
Submarine systems acquisition

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns without competitive pressure

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $108.2 million to RAYTHEON COMPANY. SUBHDR ANTENNA SYSTEMS

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 $108.2 million.

What is the period of performance?

Start: 2015-04-20. End: 2019-11-30.

What is the track record of Raytheon Company in delivering similar antenna systems to the Department of Defense?

Raytheon Company, now part of RTX, has a long and extensive track record in developing and manufacturing advanced antenna systems and related electronic warfare and radar technologies for the Department of Defense and other government agencies. They are a major prime contractor known for producing complex systems for various platforms, including naval vessels, aircraft, and ground systems. Their experience spans decades, encompassing research, development, production, and sustainment of critical defense hardware. Specific to antenna systems, Raytheon has been involved in numerous programs requiring sophisticated solutions for search, detection, navigation, and communication, often involving proprietary technologies and high-reliability standards essential for military applications.

How does the $108 million contract value compare to other similar antenna system procurements by the Navy?

Benchmarking the $108 million contract value for Subhdr Antenna Systems against similar Navy procurements is challenging without access to detailed contract databases and specific system requirements. However, for complex, specialized defense electronics like advanced antenna systems, contract values can range widely from tens of millions to hundreds of millions of dollars, depending on the system's sophistication, quantity, and integration complexity. Given that this was a sole-source award to Raytheon, a major defense contractor, the value is plausible for a significant system over a multi-year period. To provide a precise comparison, one would need to identify contracts with comparable NAICS codes (e.g., 334511), similar system functionalities (search, detection, navigation), and contract durations awarded within a similar timeframe.

What are the primary risks associated with a sole-source award for critical defense systems like antenna systems?

The primary risks associated with a sole-source award for critical defense systems like antenna systems include potential overpricing due to the lack of competitive pressure, limited innovation from alternative solutions, and a reduced incentive for the sole provider to achieve maximum efficiency or cost savings. Taxpayers may bear a higher cost than if the contract had been competed. Furthermore, reliance on a single supplier can create supply chain vulnerabilities and reduce the government's leverage in future negotiations or contract modifications. There's also a risk that the government might not be aware of or have access to the most advanced or cost-effective technologies available on the market if alternatives are not explored through competition.

How effective are firm fixed price contracts in managing costs for complex defense systems?

Firm Fixed Price (FFP) contracts are generally considered effective in managing costs for complex defense systems when the scope of work is well-defined and risks can be reasonably estimated. Under an FFP contract, the contractor assumes most of the cost and schedule risk, agreeing to a set price regardless of their actual costs. This provides cost certainty for the buyer (the government). However, for highly complex or developmental systems where scope can evolve, FFP contracts can sometimes lead contractors to cut corners on quality or performance to protect their profit margin, or conversely, lead to significant change orders if unforeseen issues arise. In this case, the FFP structure for the Subhdr Antenna Systems aimed to cap the government's financial exposure.

What is the historical spending trend for Subhdr Antenna Systems or similar navigation systems by the Department of the Navy?

Analyzing historical spending trends for 'Subhdr Antenna Systems' specifically is difficult without direct access to detailed procurement data. However, spending on navigation, guidance, and search/detection systems by the Department of the Navy is a consistent and significant part of its budget, driven by the need for advanced capabilities across its fleet. This spending fluctuates based on modernization programs, platform upgrades, and technological advancements. Over the years, the Navy has invested billions in various electronic systems, including radar, sonar, and communication antennas, often through large, multi-year contracts with major defense contractors like Raytheon. The $108 million awarded here represents a portion of that broader, ongoing investment in naval C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) capabilities.

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: N0003914R0407

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp (UEI: 001344142)

Address: 1001 BOSTON POST RD E, MARLBOROUGH, MA, 01752

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: $108,183,993

Exercised Options: $108,183,993

Current Obligation: $108,183,993

Subaward Activity

Number of Subawards: 11

Total Subaward Amount: $709,934

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline