DoD's $145.9M Raytheon Contract for Accounting Services: Full & Open Competition, Cost Plus Award Fee
Contract Overview
Contract Amount: $145,891,669 ($145.9M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2005-02-01
End Date: 2011-09-30
Contract Duration: 2,432 days
Daily Burn Rate: $60.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Place of Performance
Location: STERLING, LOUDOUN County, VIRGINIA, 20166
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $145.9 million to RAYTHEON COMPANY for work described as: Key points: 1. Significant contract value of $145.9 million awarded to Raytheon Company. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract type is Cost Plus Award Fee (CPAF), which incentivizes performance but can lead to higher costs. 4. The contract spans over 8 years, indicating a long-term need for these services. 5. The NAICS code 541219 points to 'Other Accounting Services', a broad category.
Value Assessment
Rating: fair
The Cost Plus Award Fee structure allows for costs plus an incentive fee based on performance. While this can drive efficiency, it lacks the cost certainty of fixed-price contracts. Benchmarking against similar accounting service contracts is difficult without more specific service details.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Full and open competition was employed, which typically leads to better price discovery and potentially lower costs for the government. The use of CPAF, however, introduces variability in the final cost based on performance metrics.
Taxpayer Impact: The competitive nature of the award is positive for taxpayers. However, the CPAF structure means the final cost is not fixed and could exceed initial estimates if performance incentives are heavily awarded.
Public Impact
Taxpayers benefit from a competitive bidding process for accounting services. The long duration of the contract suggests a sustained need for these specialized services within the Department of Defense. The use of an award fee contract implies a focus on achieving specific performance targets, potentially leading to higher quality outcomes.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Award Fee (CPAF) can lead to higher final costs than fixed-price contracts.
- Lack of specific service details within NAICS 541219 makes precise benchmarking difficult.
- Contract duration of over 8 years may not reflect current needs or technological advancements.
Positive Signals
- Awarded under full and open competition, maximizing potential for competitive pricing.
- The contract includes award fees, incentivizing strong performance from the contractor.
- The contracting agency is the Department of Defense, a major federal spender.
Sector Analysis
The Department of Defense frequently procures professional services, including accounting and financial management. Spending in this sector is substantial, and competitive procurement is standard practice. Benchmarks for 'Other Accounting Services' vary widely based on complexity and duration.
Small Business Impact
The data indicates the award went to Raytheon Company, a large prime contractor. There is no information provided on subcontracting opportunities for small businesses within this specific contract.
Oversight & Accountability
The contract was awarded by the Department of Defense, which has established oversight mechanisms. The Defense Contract Management Agency (DCMA) is involved, suggesting oversight of contract performance and compliance.
Related Government Programs
- Other Accounting Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Contract type (CPAF) may lead to higher costs than fixed-price.
- Long contract duration (8+ years) could result in outdated services or pricing.
- Broad NAICS code lacks specificity for detailed analysis.
- No indication of small business participation.
- Potential for cost overruns if award criteria are not stringent.
Tags
other-accounting-services, department-of-defense, va, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $145.9 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 (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $145.9 million.
What is the period of performance?
Start: 2005-02-01. End: 2011-09-30.
What specific accounting services were procured under NAICS 541219, and how do they align with current DoD needs?
The NAICS code 541219, 'Other Accounting Services,' is broad and could encompass a range of activities from auditing and bookkeeping to financial planning and analysis. Without further detail, it's difficult to ascertain the precise nature of the services. Given the contract's 2005 start date and 2011 end date, the services procured may not fully align with the DoD's current operational requirements or technological landscape.
How effectively did the Cost Plus Award Fee (CPAF) structure incentivize performance and control costs for this $145.9 million contract?
The effectiveness of the CPAF structure hinges on the clarity and attainability of the performance metrics defined in the contract. While CPAF aims to reward superior performance, it can also inflate costs if award criteria are too easily met or poorly defined. A detailed review of performance reports and awarded fees would be necessary to assess cost control and performance incentives.
What was the competitive landscape like for 'Other Accounting Services' during the 2005-2011 period, and did full and open competition yield optimal value?
Full and open competition generally promotes value by exposing the government to multiple bidders. However, the specific competitive landscape for 'Other Accounting Services' during that timeframe is not detailed here. Raytheon's win suggests they were a strong contender. Assessing optimal value would require comparing the final contract cost and performance against alternative bids and market rates at the time.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Accounting, Tax Preparation, Bookkeeping, and Payroll Services › Other Accounting Services
Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 5
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 12160 SUNRISE VALLEY DR, RESTON, VA, 20191
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $125,115,087
Exercised Options: $88,543,340
Current Obligation: $145,891,669
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2005-02-01
Current End Date: 2011-09-30
Potential End Date: 2011-09-30 00:00:00
Last Modified: 2015-11-10
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