DoD's $91M Raytheon Contract for Subhdr Antenna Systems Lacks Competition, Raises Oversight Concerns

Contract Overview

Contract Amount: $91,022,883 ($91.0M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2020-12-15

End Date: 2024-06-19

Contract Duration: 1,282 days

Daily Burn Rate: $71.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: SUBHDR ANTENNA SYSTEMS VA CLASS AND COLUMBIA BLOCK V

Place of Performance

Location: MARLBOROUGH, MIDDLESEX County, MASSACHUSETTS, 01752

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $91.0 million to RAYTHEON COMPANY for work described as: SUBHDR ANTENNA SYSTEMS VA CLASS AND COLUMBIA BLOCK V Key points: 1. Significant spending on specialized antenna systems by the Department of the Navy. 2. Sole-source award to Raytheon Company suggests limited market competition. 3. Potential for inflated costs due to lack of competitive bidding. 4. Focus on advanced navigation and guidance systems highlights critical defense capabilities.

Value Assessment

Rating: questionable

The contract value of $91 million for antenna systems appears substantial. Without competitive data, it's difficult to benchmark against similar systems, but the lack of competition raises concerns about whether the price reflects fair market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Raytheon Company. This significantly limits price discovery and potentially leads to higher costs for taxpayers as there was no market pressure to offer competitive pricing.

Taxpayer Impact: The lack of competition in this $91 million contract means taxpayers may be paying a premium for these specialized antenna systems, as the government did not leverage market forces to secure the best possible price.

Public Impact

Taxpayers may be overpaying for advanced navigation and guidance technology. Critical defense capabilities rely on this specialized equipment, making its cost and effectiveness paramount. The absence of competition could stifle innovation from other potential suppliers in the long run.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for cost overruns

Positive Signals

Awarded to a known defense contractor
Supports critical defense systems

Sector Analysis

This contract falls within the IT and Defense sectors, specifically related to the manufacturing of search, detection, and navigation systems. Spending in this area is often high due to the specialized nature and critical importance of the technology for national security.

Small Business Impact

There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. The sole-source nature of the award to a large corporation like Raytheon suggests limited opportunities for small business participation.

Oversight & Accountability

The sole-source nature of this contract warrants close oversight to ensure the price is reasonable and the performance meets all requirements. The Department of Defense should provide justification for the lack of competition and demonstrate due diligence in price negotiation.

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

Sole-source award limits price competition.
Potential for inflated costs due to lack of market pressure.
Limited transparency on justification for non-competition.
No clear indication of small business participation.
Dependence on a single supplier for critical technology.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $91.0 million to RAYTHEON COMPANY. SUBHDR ANTENNA SYSTEMS VA CLASS AND COLUMBIA BLOCK V

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 $91.0 million.

What is the period of performance?

Start: 2020-12-15. End: 2024-06-19.

What is the specific justification for awarding this contract on a sole-source basis, and what steps were taken to ensure the price is fair and reasonable?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or a lack of adequate competition. The Department of Defense should have conducted a thorough market research analysis to confirm no other sources could meet the requirements. Price reasonableness would ideally be assessed through cost analysis, comparison to previous contracts, or benchmarking against similar systems, though this is more challenging without competition.

What are the risks associated with relying on a single supplier for critical navigation and guidance systems, particularly in terms of long-term availability and potential price increases?

Relying on a single supplier creates significant risks, including potential supply chain disruptions if the sole source faces issues, and a lack of leverage for future price negotiations. The government may become locked into escalating costs over time without competitive pressure. Furthermore, it can hinder the development of alternative technologies or suppliers, potentially impacting future defense capabilities and innovation.

How does the performance of these Subhdr Antenna Systems compare to industry benchmarks, and what is the overall effectiveness of this investment in enhancing naval operational capabilities?

Assessing the performance and effectiveness requires access to specific technical data and operational reports, which are not provided here. However, given the substantial investment, the expectation is that these systems significantly enhance the Navy's search, detection, and navigation capabilities. Without independent verification or comparative data, it's difficult to definitively state their effectiveness relative to benchmarks or alternative solutions.

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: IT AND TELECOM - NETWORK

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0003919R0008

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

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: $91,022,883

Exercised Options: $91,022,883

Current Obligation: $91,022,883

Subaward Activity

Number of Subawards: 50

Total Subaward Amount: $41,318,808

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline