Raytheon Awarded $152M for Fleet & Industrial Supply Center Services, Facing Limited Competition

Contract Overview

Contract Amount: $115,302,435 ($115.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 1999-10-01

End Date: 2005-09-30

Contract Duration: 2,191 days

Daily Burn Rate: $52.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200001!1700!00E066!RA13A !FLEET & INDUSTRIAL SUPPLY CENTER!N0014000CH001 !A!*!P00002 !19991001!20000930!152160669!112820840!001339159!N!3T286!RAYTHEON SUPPORT SERVICES COMP!2 WAYSIDE RD !BURLINGTON !MA!01803!16000!550!51!CHESAPEAKE !CHESAPEAKE (CITY) !VIRGINIA !0001!+000005729500!N!N!000000000000!J058!MAINT & REPAIR OF EQ/COMMUNICATION EQUIPMENT !S1 !SERVICES !2000!NOT DISCERNABLE OR CLASSIFIED !8711!3!*!*!C!B!A!*!D !N!R!1!001!N!1A!C!Y!Z!* !* !N!C!*!A!A!A!A!A!A!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: BURLINGTON, MIDDLESEX County, MASSACHUSETTS, 01803, UNITED STATES OF AMERICA

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $115.3 million to RAYTHEON COMPANY for work described as: 200001!1700!00E066!RA13A !FLEET & INDUSTRIAL SUPPLY CENTER!N0014000CH001 !A!*!P00002 !19991001!20000930!152160669!112820840!001339159!N!3T286!RAYTHEON SUPPORT SERVICES COMP!2 WAYSIDE RD !BURLINGTON !MA!01803!16000!550!51!CHESAPEAKE !CHESAPEAKE (CITY) !VIRGINIA !0001!+000005729500… Key points: 1. Significant contract value of $152 million awarded to Raytheon. 2. Limited competition raises questions about price discovery and potential overspending. 3. Contract duration of nearly 6 years suggests a long-term need for these services. 4. The sector is Defense, specifically maintenance and repair of communication equipment.

Value Assessment

Rating: questionable

The contract's Cost Plus Award Fee structure, combined with limited competition, makes a definitive value assessment difficult. The final price could be significantly higher than initially projected if performance incentives are heavily awarded.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not competed, indicating a limited competition approach. This lack of open bidding may have restricted price discovery and potentially led to a higher cost for the government.

Taxpayer Impact: The limited competition and Cost Plus Award Fee structure raise concerns about taxpayer value, as the final cost may not reflect the most competitive pricing available.

Public Impact

Taxpayers may be paying more than necessary due to the lack of competitive bidding. The long-term nature of the contract could lock the government into a potentially suboptimal pricing arrangement. The specific services provided are critical for military readiness, making the contract essential despite competition concerns.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition
Cost Plus Award Fee structure
Long contract duration

Positive Signals

Awarded to a known entity (Raytheon)
Services are essential for defense operations

Sector Analysis

This contract falls within the Defense sector, specifically for maintenance and repair of communication equipment. Spending benchmarks in this area can vary widely based on the complexity and criticality of the equipment.

Small Business Impact

There is no indication in the provided data that small businesses were involved in this contract, either as prime contractors or subcontractors.

Oversight & Accountability

The limited competition and the Cost Plus Award Fee structure warrant close oversight to ensure fair pricing and effective service delivery. The Defense Contract Management Agency is responsible for oversight.

Related Government Programs

Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competitive bidding
Potential for inflated costs due to CPAF
Long contract duration increases risk exposure
Limited transparency on award fee criteria

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $115.3 million to RAYTHEON COMPANY. 200001!1700!00E066!RA13A !FLEET & INDUSTRIAL SUPPLY CENTER!N0014000CH001 !A!*!P00002 !19991001!20000930!152160669!112820840!001339159!N!3T286!RAYTHEON SUPPORT SERVICES COMP!2 WAYSIDE RD !BURLINGTON !MA!01803!16000!550!51!CHESAPEAKE !CHESAPEAKE (CITY) !VIRGINIA !0001!+000005729500!N!N!000000000000!J058!MAINT & REPAIR OF EQ/COMMUNICATION EQUIPMENT !S1 !SERVICES !2000!NOT DISCERNABLE OR CLASSIFIED !8711!3!*!*!C!B!A!*!D !N!R!1!001!N!1A!C!Y!Z!* !* !N!C!*!A!A!A!A!A!A!* !*!N!A!C!N!*!*!*!*!*!

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $115.3 million.

What is the period of performance?

Start: 1999-10-01. End: 2005-09-30.

What was the justification for limiting competition on this significant contract?

The justification for limiting competition is not explicitly stated in the provided data. Typically, such decisions are based on factors like unique capabilities, urgent needs, or specific government requirements that only one or a few sources can meet. Further investigation into the contract's award documentation would be necessary to understand the precise rationale.

How does the Cost Plus Award Fee structure impact the final cost and contractor performance?

The Cost Plus Award Fee (CPAF) structure allows the contractor to recover allowable costs plus a base fee, with an additional award fee contingent on meeting or exceeding performance objectives. This can incentivize high performance but also introduces uncertainty in the final cost, as the award fee portion can significantly increase the total amount paid.

What is the potential risk of cost overruns given the contract's structure and duration?

The risk of cost overruns is moderate to high. The CPAF structure inherently allows for costs to fluctuate, and the award fee component can add substantial amounts if performance targets are met. Combined with a nearly six-year duration, there's ample opportunity for unforeseen cost increases to be incurred and potentially passed on to the government.

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 3 VAN DE GRAAFF DR STE 3, BURLINGTON, MA, 01803

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline