Raytheon Company awarded $11M for AS&RE technical support, a cost-plus-fixed-fee contract

Contract Overview

Contract Amount: $11,030,763 ($11.0M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2007-07-20

End Date: 2010-03-31

Contract Duration: 985 days

Daily Burn Rate: $11.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: TECHNICAL SUPPORT FOR THE AS&RE

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46219

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $11.0 million to RAYTHEON COMPANY for work described as: TECHNICAL SUPPORT FOR THE AS&RE Key points: 1. Contract awarded using full and open competition after exclusion of sources, indicating a potentially competitive process. 2. The contract type is Cost Plus Fixed Fee (CPFF), which can incentivize cost control but also carries risk if not managed closely. 3. Performance period of 985 days suggests a medium-term engagement for technical support services. 4. The contract was awarded by the Defense Contract Management Agency, a key oversight body within the DoD. 5. The North American Industry Classification System (NAICS) code 541330 points to Engineering Services, a critical sector for defense operations. 6. The contract value of approximately $11 million falls within a moderate spending range for specialized technical support.

Value Assessment

Rating: fair

The contract's Cost Plus Fixed Fee (CPFF) structure requires careful monitoring to ensure value for money. While CPFF can be appropriate for research and development or when costs are uncertain, it necessitates robust oversight to prevent cost overruns. Benchmarking this specific $11 million award against similar technical support contracts for AS&RE systems would be necessary for a definitive value assessment. Without comparative data on the scope of services and contractor performance, it's difficult to definitively state if the pricing is optimal.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition after exclusion of sources.' This suggests that while the competition was intended to be broad, specific sources may have been excluded for particular reasons, possibly related to specialized knowledge or prior performance. The number of bidders is not specified, but the designation implies that multiple qualified vendors had the opportunity to compete, which generally supports price discovery and competitive pricing.

Taxpayer Impact: The use of full and open competition, even with exclusions, generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and innovative solutions compared to sole-source awards.

Public Impact

The primary beneficiaries are the Department of Defense and its associated agencies requiring technical support for the AS&RE program. Services delivered include essential technical support, likely encompassing engineering, maintenance, and operational assistance for complex systems. The geographic impact is primarily within the operational sphere of the Defense Contract Management Agency and potentially the contractor's facilities. Workforce implications include employment opportunities for engineers and technical specialists within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contracts can lead to higher costs if not rigorously managed, as the contractor is reimbursed for actual costs plus a fixed fee.
The 'exclusion of sources' in the competition, while potentially justified, warrants scrutiny to ensure it did not unduly limit competition and inflate prices.
The duration of the contract (985 days) requires ongoing performance monitoring to ensure continued value and alignment with program objectives.

Positive Signals

Awarded under 'full and open competition,' indicating a structured and potentially competitive bidding process.
The contract is managed by the Defense Contract Management Agency, suggesting established oversight mechanisms are in place.
The NAICS code 541330 (Engineering Services) aligns with specialized defense needs, implying the contractor possesses relevant expertise.

Sector Analysis

The contract falls within the Engineering Services sector (NAICS 541330), a critical component of the broader defense industry. This sector is characterized by high technical expertise, significant R&D investment, and close ties to government procurement. The defense engineering services market is substantial, with numerous firms competing for contracts that support military readiness and technological advancement. This specific award represents a portion of the overall spending on technical support for advanced defense systems.

Small Business Impact

The provided data indicates that small business participation (sb) was false, and there is no explicit mention of small business set-asides. This suggests that the contract was not specifically targeted towards small businesses. Consequently, the direct impact on the small business ecosystem for this particular award is likely minimal, though larger prime contractors are often required to have subcontracting plans that include small businesses for other parts of their work.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance with contract terms. Accountability measures are inherent in the CPFF structure, requiring the contractor to justify costs and deliver the fixed fee services. Transparency is generally maintained through contract reporting requirements, though specific details of cost breakdowns may be sensitive. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Engineering Services
Technical Support Contracts
Cost Plus Fixed Fee Contracts
Department of Defense Procurement
AS&RE Program Support

Risk Flags

Cost Overrun Potential (CPFF)
Limited Competition Justification
Performance Monitoring Intensity

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.0 million to RAYTHEON COMPANY. TECHNICAL SUPPORT FOR THE AS&RE

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 $11.0 million.

What is the period of performance?

Start: 2007-07-20. End: 2010-03-31.

What is the specific nature of the 'AS&RE' program and the technical support required?

AS&RE likely refers to 'Aeronautics Systems and Related Equipment' or a similar designation within the Department of Defense, focusing on advanced aircraft, spacecraft, or related systems. The technical support required under this contract would typically involve a range of services such as engineering analysis, system integration, maintenance planning, troubleshooting, documentation, and potentially lifecycle support for these complex assets. The specific details would be outlined in the contract's Statement of Work (SOW), detailing the precise tasks, deliverables, and performance standards expected from Raytheon Company to ensure the operational readiness and effectiveness of the AS&RE systems.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for similar defense engineering services?

Cost Plus Fixed Fee (CPFF) contracts are common in defense for services where the scope of work is not precisely defined at the outset or involves significant research and development, making it difficult to establish a firm fixed price. In CPFF, the contractor is reimbursed for allowable costs incurred plus a predetermined fixed fee representing profit. This contrasts with Firm Fixed Price (FFP) contracts, where the contractor bears the risk of cost overruns but also reaps greater profit from cost savings. Cost Plus Incentive Fee (CPIF) contracts offer shared savings or penalties based on performance targets. For routine, well-defined services, FFP is often preferred for cost certainty. CPFF is suitable when flexibility and technical expertise are paramount, but it requires stringent oversight to manage costs effectively and ensure value for taxpayers.

What are the potential risks associated with the 'full and open competition after exclusion of sources' clause?

The 'full and open competition after exclusion of sources' clause presents a nuanced competitive landscape. While it aims for broad participation, the 'exclusion of sources' implies that certain potential bidders were deliberately not considered. This exclusion could be based on factors like specialized knowledge, proprietary technology, security clearances, or past performance issues. The risk lies in whether these exclusions were justified and did not unduly restrict competition, potentially leading to higher prices or fewer innovative solutions than a truly unfettered open competition might yield. A thorough review of the justification for excluding specific sources is crucial to assess if the competition was genuinely robust and served the government's best interest.

What is Raytheon Company's track record with similar defense technical support contracts?

Raytheon Company (now RTX) has an extensive and long-standing track record as a major defense contractor, frequently awarded large and complex contracts across various domains, including aeronautics, missile defense, and intelligence systems. Their experience spans research, development, manufacturing, and sustainment services. For technical support contracts similar to this AS&RE award, Raytheon typically demonstrates significant capability in providing engineering, logistics, and program management support. Performance history on previous contracts, including any past issues with cost control, schedule adherence, or quality, would be detailed in government performance databases (e.g., Contractor Performance Assessment Reporting System - CPARS) and is a key factor in source selection for future awards.

How does the $11 million contract value compare to historical spending on AS&RE technical support?

To accurately assess how the $11 million contract value compares to historical spending on AS&RE technical support, one would need access to historical contract data specifically for the AS&RE program or closely related programs managed by the Defense Contract Management Agency or the relevant service branch. This would involve analyzing contract databases for similar services, contract types (CPFF), and durations awarded over previous fiscal years. Without this specific historical data, a direct comparison is speculative. However, $11 million represents a significant, but not exceptionally large, sum for specialized engineering and technical support within the defense sector, suggesting it likely covers a defined scope of work for a specific period rather than a comprehensive, long-term sustainment effort.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0016407R4280

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 6125 E 21ST ST, INDIANAPOLIS, IN, 46219

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: $11,030,763

Exercised Options: $11,030,763

Current Obligation: $11,030,763

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline