Raytheon Company awarded $34.7M for Heater Assembly, Rad, with no competition

Contract Overview

Contract Amount: $34,723,420 ($34.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2025-12-23

End Date: 2028-09-18

Contract Duration: 1,000 days

Daily Burn Rate: $34.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: HEATER ASSEMBLY,RAD

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $34.7 million to RAYTHEON COMPANY for work described as: HEATER ASSEMBLY,RAD Key points: 1. Contract awarded to a single source, raising questions about price competitiveness. 2. The contract duration of approximately 3 years suggests a need for sustained supply. 3. Awarded by the Department of the Navy, indicating a defense-related need. 4. The specific item, 'HEATER ASSEMBLY,RAD', points to a specialized component within a larger system. 5. The lack of competition may limit opportunities for innovation and cost reduction. 6. The firm-fixed-price contract type aims to control costs, but without competition, its effectiveness is uncertain.

Value Assessment

Rating: questionable

The contract value of $34.7 million for a heater assembly is substantial. Without competitive bidding, it is difficult to benchmark the value for money. The firm-fixed-price structure is intended to provide cost certainty, but the absence of competition means there's no market validation of the pricing. Further analysis would be needed to compare this unit cost to similar assemblies or internal manufacturing costs if available.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Raytheon Company, was solicited. This typically occurs when a product or service is unique, or there's a compelling reason to use a specific contractor. The lack of a competitive process means potential savings from multiple bids were not realized, and the government did not benefit from the price discovery that competition provides.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. The government missed an opportunity to secure potentially lower prices through a bidding process.

Public Impact

The Department of the Navy benefits from the acquisition of critical heater assemblies for its operations. This contract supports the production or maintenance of defense systems requiring specialized electronic components. The primary impact is on the defense sector's supply chain, ensuring availability of necessary parts. Workforce implications are likely within Raytheon's manufacturing facilities, potentially in Arizona where the contract is registered.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices.
Sole-source awards can reduce transparency in pricing.
Potential for vendor lock-in if alternatives are not explored.
Limited opportunities for small businesses to participate as subcontractors without specific mandates.

Positive Signals

Firm-fixed-price contract type helps manage cost overruns.
Award to an established contractor like Raytheon suggests a degree of reliability.
Specific item designation indicates a focused procurement need.

Sector Analysis

The procurement of specialized electronic components like heater assemblies falls within the broader aerospace and defense manufacturing sector. This sector is characterized by high R&D investment, stringent quality requirements, and often long-term government contracts. Spending in this area is critical for maintaining national security and technological superiority. Comparable spending benchmarks would typically involve analyzing other sole-source or competitively awarded contracts for similar electronic sub-assemblies within the defense industrial base.

Small Business Impact

This contract was not set aside for small businesses, nor does it indicate any specific subcontracting plans for small businesses. The sole-source nature of the award limits opportunities for small businesses to participate directly. Without explicit requirements for small business subcontracting, their involvement is unlikely unless Raytheon voluntarily includes them in their supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. The firm-fixed-price nature provides some cost control, but the lack of competition necessitates close monitoring of performance and delivery to ensure value. Transparency is limited due to the sole-source nature, and any Inspector General investigations would likely focus on potential fraud, waste, or abuse if specific concerns arise.

Related Government Programs

Defense Electronics Procurement
Aerospace Component Manufacturing
Naval Systems Support
Sole-Source Defense Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for price inflation
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.7 million to RAYTHEON COMPANY. HEATER ASSEMBLY,RAD

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 $34.7 million.

What is the period of performance?

Start: 2025-12-23. End: 2028-09-18.

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

Raytheon Company, now part of RTX, has a long and extensive history of contracting with the Department of Defense across various platforms and systems. They are a major defense contractor known for producing a wide range of products, including electronics, missiles, and aerospace systems. For specific components like 'HEATER ASSEMBLY,RAD', their track record would likely involve numerous prior awards, potentially including sole-source and competitively won contracts. Analyzing their past performance on similar items would involve reviewing contract databases for delivery history, quality ratings, and any past performance issues or commendations. Given their size and scope, it's probable they have supplied such components for decades, often as part of larger system integrations.

How does the $34.7 million value compare to similar heater assembly contracts?

Directly comparing the $34.7 million value for a 'HEATER ASSEMBLY,RAD' to similar contracts is challenging without more specific technical details and market data. Heater assemblies can vary significantly in complexity, materials, and intended application, leading to wide price ranges. As this contract was sole-sourced, there is no competitive benchmark to assess if the price is reasonable. To perform a robust comparison, one would need to identify contracts for heater assemblies with comparable specifications, intended use (e.g., specific military platform), quantity, and delivery timelines. Furthermore, understanding the cost breakdown (materials, labor, overhead, profit) would be crucial. In the absence of such data, the $34.7 million figure serves as the primary data point, with its value relative to market rates being 'questionable' due to the lack of competition.

What are the primary risks associated with this sole-source award?

The primary risks associated with this sole-source award are centered around cost and potential lack of innovation. Without competition, there is a significant risk that the government is paying a higher price than could be achieved through a competitive bidding process. This lack of market pressure can also disincentivize the contractor from seeking cost efficiencies or technological advancements. Another risk is vendor lock-in; if this specific heater assembly is critical to a larger system, the Department of the Navy may become dependent on Raytheon for future needs, potentially at inflated prices. Furthermore, the absence of multiple bidders reduces transparency into the pricing structure and makes it harder to verify the 'should cost' estimate.

How effective is a firm-fixed-price contract in controlling costs for sole-source procurements?

A firm-fixed-price (FFP) contract is generally considered effective in controlling costs because it shifts the risk of cost overruns to the contractor. The contractor agrees to a set price, and any expenses incurred above that price come out of their profit. However, the effectiveness of FFP in a sole-source situation is diminished. While the government knows its maximum liability, the initial fixed price itself might be inflated due to the lack of competitive negotiation. The contractor has less incentive to reduce costs if they believe the initial price already incorporates a buffer for unforeseen expenses or simply reflects a non-competitive market. Therefore, while FFP provides cost certainty, it does not guarantee cost efficiency in a sole-source context without robust government negotiation and cost analysis.

What is the historical spending pattern for 'HEATER ASSEMBLY,RAD' or similar items by the Department of the Navy?

Historical spending patterns for specific components like 'HEATER ASSEMBLY,RAD' by the Department of the Navy are typically found within federal procurement databases such as FPDS or SAM.gov. Without access to detailed historical data for this exact item, it's difficult to provide a precise pattern. However, the Department of the Navy frequently procures complex electronic and mechanical components for its vast array of naval platforms, including ships, submarines, and aircraft. Spending on such items can be cyclical, tied to new platform development, modernization programs, or sustainment efforts. Sole-source awards for specialized components are not uncommon in defense, especially when dealing with proprietary technology or systems requiring specific integration. Analyzing past awards for similar assemblies would reveal trends in contract values, durations, and the prevalence of competitive versus sole-source actions.

Industry Classification

NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Bare Printed Circuit Board Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0010424RQD89

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 1151 E HERMANS RD, TUCSON, AZ, 85756

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: $34,723,420

Exercised Options: $34,723,420

Current Obligation: $34,723,420

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: N0010424GCL01

IDV Type: BOA

Timeline