DoD's $12.9M Raytheon contract for software support services awarded under full and open competition

Contract Overview

Contract Amount: $12,948,429 ($12.9M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2023-02-27

End Date: 2026-05-29

Contract Duration: 1,187 days

Daily Burn Rate: $10.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: GPNTS SOFTWARE SUPPORT SERVICES

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92110

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $12.9 million to RAYTHEON COMPANY for work described as: GPNTS SOFTWARE SUPPORT SERVICES Key points: 1. Contract awarded to a large, established defense contractor, suggesting a focus on proven capabilities. 2. The contract's duration of nearly three years indicates a need for sustained software support. 3. Awarded as a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 4. The use of Cost Plus Fixed Fee (CPFF) pricing can introduce cost uncertainty if not managed closely. 5. No small business set-aside was utilized, potentially limiting opportunities for smaller firms in this specific award. 6. The contract is for custom computer programming services, a critical area for modern defense systems.

Value Assessment

Rating: fair

Benchmarking the value of this specific delivery order is challenging without knowing the parent IDIQ contract's terms and scope. However, the total award amount of approximately $12.9 million over nearly three years suggests a moderate investment in software support. The CPFF pricing structure warrants careful monitoring to ensure costs remain within reasonable bounds and do not escalate beyond initial projections. Comparison to similar custom computer programming services contracts would be necessary for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The specific number of bidders is not provided, but this competitive approach generally fosters price discovery and encourages contractors to offer their best terms. The Department of the Navy's decision to use full and open competition suggests confidence in the market's ability to provide suitable solutions.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it promotes a competitive environment that can lead to better pricing and more innovative solutions, maximizing the value of federal dollars.

Public Impact

The primary beneficiaries are the Department of Defense and the Department of the Navy, who will receive ongoing support for critical software. Services delivered include custom computer programming, essential for maintaining and potentially enhancing defense software systems. The geographic impact is likely concentrated around naval operations and facilities, though the exact locations are not specified. Workforce implications may include the employment of skilled software developers and support personnel by Raytheon Company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) pricing can lead to cost overruns if not rigorously managed.
Lack of specific bidder count makes it difficult to assess the true level of competition.
The contract's duration and value could be subject to change if it's a delivery order under a broader IDIQ.

Positive Signals

Awarded through full and open competition, suggesting a robust market response.
Contract awarded to a well-established contractor (Raytheon Company) with a track record in defense.
The contract addresses a critical need for custom computer programming services.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on custom computer programming services. The market for such services is vast and highly competitive, with numerous large and small businesses offering specialized expertise. Federal spending in this area is substantial, driven by the need to maintain and modernize complex IT systems across all government agencies. Raytheon Company is a major player in the defense IT landscape, often securing contracts for sophisticated software development and support.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it indicate any specific subcontracting goals for small businesses. This means that opportunities for small businesses to directly participate in this specific award are limited. While Raytheon Company may engage small businesses as subcontractors, the primary contract does not prioritize their inclusion, potentially impacting the small business ecosystem's direct benefit from this particular funding.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the CPFF structure, requiring detailed cost reporting and justification. Transparency is facilitated by the Federal Procurement Data System (FPDS), which publishes contract award information. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Software Development Contracts
IT Services for Department of the Navy
Custom Computer Programming Services
Raytheon Company Federal Contracts

Risk Flags

Potential for cost overruns due to CPFF pricing structure.
Lack of specific competition metrics (number of bidders) limits assessment of price discovery.
Delivery order nature may obscure total contract value and scope if parent IDIQ is not analyzed.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.9 million to RAYTHEON COMPANY. GPNTS SOFTWARE SUPPORT SERVICES

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 $12.9 million.

What is the period of performance?

Start: 2023-02-27. End: 2026-05-29.

What is Raytheon Company's track record with the Department of Defense for similar software support services?

Raytheon Company, now RTX, has a long and extensive history of providing a wide array of services to the Department of Defense (DoD), including complex software development, integration, and sustainment. Their portfolio includes work on major defense platforms, command and control systems, intelligence, surveillance, and reconnaissance (ISR) systems, and cybersecurity solutions. For software support services specifically, Raytheon has consistently secured significant contracts across various branches of the military. Their track record generally indicates a capacity to handle large-scale, technically demanding projects. However, like any large defense contractor, they have also faced scrutiny and performance reviews on specific contracts. A detailed analysis would require examining past performance evaluations and any reported issues on prior software support agreements with the DoD to fully assess their suitability and reliability for this particular contract.

How does the approximate $12.9 million award compare to other custom computer programming services contracts awarded by the Navy?

The $12.9 million award for custom computer programming services over approximately three years represents a moderate-sized contract within the Navy's IT spending. The Navy awards numerous contracts for IT services, ranging from small, specialized support tasks to massive enterprise-wide system development and sustainment programs. Contracts in the tens of millions of dollars for specialized software support are not uncommon, especially for critical defense systems requiring ongoing maintenance, updates, and enhancements. To provide a precise comparison, one would need to analyze the scope and complexity of the services rendered under this contract against similar contracts awarded over the same period. Factors like the specific software being supported, the level of customization required, and the contractor's overhead rates significantly influence pricing, making direct dollar-value comparisons alone insufficient for a complete value assessment.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for software support?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract, like the one awarded to Raytheon Company, revolve around cost control and potential for overruns. In a CPFF arrangement, the contractor is reimbursed for allowable costs plus a predetermined fixed fee, which represents their profit. The risk for the government lies in the contractor's incentive to control costs, as their profit is fixed regardless of the actual costs incurred. If costs escalate beyond initial estimates, the government bears the burden of these increased expenses, while the contractor's fee remains unchanged. This necessitates robust government oversight, detailed cost tracking, and stringent auditing to ensure that all claimed costs are reasonable, allocable, and necessary. Without effective management, CPFF contracts can become more expensive than fixed-price alternatives.

What is the typical duration and value range for custom computer programming services contracts within the defense sector?

The duration and value of custom computer programming services contracts within the defense sector can vary dramatically based on the project's scope, complexity, and criticality. Contracts can range from short-term, task-order-based agreements lasting a few months and valued in the hundreds of thousands of dollars, to multi-year, multi-billion dollar programs for developing and maintaining large-scale defense systems. For ongoing software support and sustainment, contracts often span several years, with values frequently reaching into the tens or hundreds of millions of dollars, and sometimes billions for major platform software. The $12.9 million award over nearly three years for this specific contract falls within the moderate range for sustained software support, suggesting it addresses a significant but not necessarily enterprise-wide or foundational system development effort.

How does the classification 'Custom Computer Programming Services' (NAICS 541511) typically translate into specific deliverables for the Department of Defense?

The NAICS code 541511, 'Custom Computer Programming Services,' encompasses a broad range of activities critical to the Department of Defense (DoD). For the DoD, this typically translates into deliverables such as the design, development, and implementation of new software applications tailored to specific military requirements. It also includes modifying and enhancing existing software to incorporate new features, improve performance, or adapt to changing operational needs. Other deliverables can involve software integration services, ensuring different systems and applications can communicate effectively, and providing specialized technical support, debugging, and maintenance for complex defense software. Essentially, these services ensure that the DoD's software systems are functional, up-to-date, and capable of meeting evolving mission demands in areas like command and control, intelligence analysis, logistics, and weapons systems operation.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0003919R0005

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 8650 BALBOA AVE, SAN DIEGO, CA, 92123

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: $16,633,085

Exercised Options: $16,633,085

Current Obligation: $12,948,429

Actual Outlays: $17,712

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0003920D0021

IDV Type: IDC

Timeline