Raytheon Company awarded $15.19M for Engineering Services, Maintenance, and Repairs by the Department of the Navy

Contract Overview

Contract Amount: $15,186,975 ($15.2M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2017-09-19

End Date: 2021-09-30

Contract Duration: 1,472 days

Daily Burn Rate: $10.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ENGINEERING SERVICES MTS MAINTENANCE AND REPAIRS IGF::OT::IGF

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75070

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $15.2 million to RAYTHEON COMPANY for work described as: ENGINEERING SERVICES MTS MAINTENANCE AND REPAIRS IGF::OT::IGF Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Duration of over 4 years suggests a long-term need for these services. 3. Services encompass critical systems for search, detection, and navigation. 4. The contract type is Cost Plus Fixed Fee, which can incentivize cost overruns. 5. Geographic location of performance is Texas. 6. No small business set-aside was applied to this contract.

Value Assessment

Rating: fair

Benchmarking the value of this Cost Plus Fixed Fee contract is challenging without detailed cost breakdowns. The fixed fee component provides some cost control, but the cost-reimbursement nature leaves significant exposure to actual costs incurred by Raytheon. Comparing to similar sole-source engineering services contracts for complex defense systems is difficult due to unique specifications. However, the total value of over $15 million over four years indicates a substantial investment in specialized technical support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities or when urgency dictates a direct award. The lack of competition means that taxpayers did not benefit from potential cost savings that could arise from a competitive bidding process.

Taxpayer Impact: Sole-source awards limit the government's ability to negotiate the best possible price, potentially leading to higher costs for taxpayers compared to a competed contract.

Public Impact

The Department of the Navy benefits from specialized engineering, maintenance, and repair services for critical systems. These services ensure the operational readiness and effectiveness of search, detection, navigation, guidance, and related systems. The primary geographic impact is in Texas, where the services are performed. The contract supports specialized technical roles within the defense sector, likely involving highly skilled engineers and technicians.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can lead to higher costs if not closely managed.
Sole-source award limits competitive pressure on pricing.
Long contract duration may not reflect current market efficiencies.
Lack of small business participation limits broader economic impact.

Positive Signals

Award to a known entity (Raytheon) suggests a reliance on established expertise.
Services are critical for national defense systems.
Performance is concentrated in a specific geographic region (Texas).

Sector Analysis

This contract falls within the broader defense sector, specifically supporting the manufacturing and maintenance of complex navigation and guidance systems. The industry is characterized by high barriers to entry due to specialized knowledge, security requirements, and significant R&D investment. Raytheon is a major player in this space. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of defense systems, but significant government investment in maintaining and upgrading such critical assets is common.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to include specific subcontracting requirements for small businesses based on the provided data. This means that opportunities for small businesses to participate in this specific contract are limited. The absence of small business involvement in this particular award does not necessarily reflect the overall small business utilization by Raytheon or the Department of the Navy, but it does mean this specific procurement did not directly foster small business growth.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. The Cost Plus Fixed Fee structure necessitates rigorous monitoring of costs incurred by the contractor to ensure the fixed fee remains justified and that costs are reasonable and allocable. Transparency is generally maintained through contract reporting requirements, though detailed cost breakdowns may be proprietary. The Inspector General for the Department of Defense would have jurisdiction for audits and investigations if any fraud, waste, or abuse were suspected.

Related Government Programs

Naval Systems Engineering Support
Defense Navigation and Guidance Systems Maintenance
Aerospace and Defense Contractor Services
Department of Defense IT and Engineering Services

Risk Flags

Sole-source award limits competitive pricing.
Cost Plus Fixed Fee contract type carries inherent cost escalation risks.
Lack of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.2 million to RAYTHEON COMPANY. ENGINEERING SERVICES MTS MAINTENANCE AND REPAIRS IGF::OT::IGF

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 $15.2 million.

What is the period of performance?

Start: 2017-09-19. End: 2021-09-30.

What is the historical spending pattern for similar engineering services contracts awarded by the Department of the Navy to Raytheon Company?

Analyzing historical spending patterns for similar contracts requires access to a comprehensive database of federal procurement data. Without such access, it's difficult to provide specific figures. However, Raytheon is a major defense contractor with a long history of receiving substantial awards from the Department of the Navy for a wide range of services, including engineering, maintenance, and system integration. These awards often span multiple years and can run into hundreds of millions or even billions of dollars cumulatively, reflecting the scale and complexity of naval defense systems. The specific contract in question, valued at approximately $15.19 million over roughly four years, appears to be a moderate-sized award within the broader context of Raytheon's overall contract portfolio with the Navy.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types in terms of cost efficiency for engineering services?

The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is not precisely defined or when there is a high degree of uncertainty in the costs. It reimburses the contractor for allowable costs plus a fixed fee, which represents the contractor's profit. While the fixed fee provides some incentive for cost control compared to a pure cost-plus-award-fee contract, it can still lead to higher overall costs than fixed-price contracts if the initial cost estimates are inaccurate or if the contractor's costs escalate significantly. Fixed-price contracts generally offer better cost certainty for the government, but they are less suitable for complex projects with undefined requirements. CPFF strikes a balance, offering flexibility while attempting to cap profit.

What are the key performance indicators (KPIs) typically used to evaluate the success of engineering services contracts like this one?

Key Performance Indicators (KPIs) for engineering services contracts typically focus on technical performance, schedule adherence, and cost control. For this specific contract, KPIs might include metrics such as the successful completion of maintenance and repair tasks within specified timeframes, the achievement of system uptime or availability targets, the accuracy and completeness of engineering documentation, and adherence to safety protocols. For a CPFF contract, monitoring the contractor's ability to manage costs within projected ranges, even though costs are reimbursed, is also crucial. Customer satisfaction surveys and feedback from end-users of the systems being serviced are also common qualitative KPIs.

What is the potential impact of a sole-source award on innovation and technological advancement within the defense sector?

Sole-source awards can have a mixed impact on innovation. On one hand, they can allow for deep collaboration and long-term investment in specialized technologies by a trusted partner, potentially fostering incremental improvements. However, by limiting competition, sole-source awards can reduce the pressure on contractors to innovate aggressively to win future business. It can also stifle the entry of new, potentially disruptive technologies or companies into the market. Over-reliance on sole-source contracts may lead to a less dynamic ecosystem where established players maintain dominance, potentially slowing the pace of broader technological advancement compared to a more open, competitive environment.

Are there any known issues or concerns regarding Raytheon Company's performance on similar Department of the Navy contracts?

Assessing Raytheon Company's performance on similar contracts requires access to detailed performance reviews, past performance databases, and any official corrective action reports. Without this specific data, it is impossible to definitively state whether there are known issues. Raytheon, as a large and established defense contractor, likely has a complex performance history across numerous contracts. While major issues are often documented and can impact future awards, routine performance metrics and minor deviations are typically managed internally or through contract modifications. General information on contractor performance is often available through government sources like the Contractor Performance Assessment Reporting System (CPARS), but detailed analysis would necessitate direct access to that system.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0016417RJQ02

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 2501 W UNIVERSITY DR, MCKINNEY, TX, 75071

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: $15,544,748

Exercised Options: $15,544,748

Current Obligation: $15,186,975

Actual Outlays: $1,305,309

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $532,869

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0016417GJQ02

IDV Type: BOA

Timeline