DoD awards Raytheon $578M for wireless comms equipment, a 1999 contract with a 2012 end date

Contract Overview

Contract Amount: $57,831,109 ($57.8M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 1999-10-21

End Date: 2012-07-26

Contract Duration: 4,662 days

Daily Burn Rate: $12.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Place of Performance

Location: MARLBOROUGH, MIDDLESEX County, MASSACHUSETTS, 01752

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $57.8 million to RAYTHEON COMPANY for work described as: Key points: 1. The contract value is substantial, indicating a significant need for the specified equipment. 2. Raytheon, a major defense contractor, secured this award, highlighting its established position in the sector. 3. The long duration (1999-2012) suggests a stable, long-term requirement, but also raises questions about potential obsolescence or evolving needs. 4. The sector is critical for military communications, underscoring the importance of reliable and advanced equipment.

Value Assessment

Rating: fair

The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed tightly. The award amount of $578M over a long period suggests a significant investment, but without specific unit cost data, a direct benchmark is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is generally positive for price discovery. However, the long duration and specific nature of the equipment might have limited the number of truly competitive bids over its lifespan.

Taxpayer Impact: While competition was utilized, the extended period and cost-plus nature of the contract could have resulted in higher taxpayer costs than a fixed-price contract with shorter terms.

Public Impact

Ensures continued operational capability for naval wireless communications. Supports a major defense contractor and its supply chain. Potential for technology to become outdated over the contract's long life. Highlights the long-term procurement strategies of the Department of Defense.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (13 years) may lead to outdated technology.
Cost Plus Fixed Fee contract type can incentivize higher costs.
Lack of specific unit cost data makes value assessment challenging.

Positive Signals

Awarded under full and open competition.
Secured by a reputable and experienced defense contractor.
Addresses a critical need for wireless communications equipment.

Sector Analysis

This contract falls within the Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing sector. Spending in this area is crucial for maintaining modern communication infrastructure, particularly for defense applications. Benchmarks are difficult without more specific equipment details, but large, long-term contracts are common for specialized defense systems.

Small Business Impact

The data indicates the prime contractor is Raytheon Company, a large business. There is no explicit information provided regarding small business participation in this specific contract award.

Oversight & Accountability

The contract was awarded in 1999 and ended in 2012. Oversight would have been crucial throughout this extended period to manage costs and ensure delivery of required equipment. The 'MA' status suggests it might have been awarded through a General Services Administration (GSA) schedule, which typically has established oversight mechanisms.

Related Government Programs

Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Long contract duration potentially leading to outdated technology.
Cost Plus Fixed Fee contract type may lead to cost overruns.
Lack of detailed cost breakdown for unit pricing.
Limited information on small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $57.8 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 $57.8 million.

What is the period of performance?

Start: 1999-10-21. End: 2012-07-26.

What was the specific type of wireless communications equipment procured, and how did its capabilities evolve over the contract's 13-year lifespan?

The specific equipment procured under this contract is not detailed in the provided data. However, given the 1999 award date and 2012 end date, it likely involved technologies that have since been superseded. Understanding the exact nature of the equipment would allow for a better assessment of its continued relevance and the potential for technological obsolescence, impacting its long-term value to the Department of Defense.

How did the Cost Plus Fixed Fee structure impact the final cost compared to potential fixed-price alternatives, considering the long duration?

The Cost Plus Fixed Fee (CPFF) structure allows the contractor to recover all allowable costs plus a predetermined fixed fee. Over a long contract duration like this (13 years), there's a risk that costs could escalate beyond initial projections, with the government bearing the brunt. Without comparative bids or final cost data, it's difficult to definitively say if CPFF was more or less expensive than a fixed-price approach, but it generally offers less incentive for cost control by the contractor.

What was the competitive landscape for this specific type of wireless communications equipment in 1999, and did full and open competition yield the best value?

While the contract was awarded under 'full and open competition,' the specific nature of advanced wireless communications equipment in 1999 might have limited the number of qualified bidders. Raytheon's success suggests they were a leading provider. Assessing if this competition truly yielded the 'best value' would require analyzing the number of bids received, the price differences between them, and the technical capabilities offered by each competitor at the time of award.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Address: 1001 BOSTON POST RD E, MARLBOROUGH, MA, 03

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline