DoD awards Raytheon $39.5M for High Definition Sensor Payload, lacking competition

Contract Overview

Contract Amount: $39,556,000 ($39.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2018-05-04

End Date: 2020-09-30

Contract Duration: 880 days

Daily Burn Rate: $45.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: COMMON SENSOR HIGH DEFINITION PAYLOAD

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75071

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $39.6 million to RAYTHEON COMPANY for work described as: COMMON SENSOR HIGH DEFINITION PAYLOAD Key points: 1. Significant award to Raytheon for advanced sensor technology. 2. Lack of competition raises concerns about price discovery. 3. Potential for higher costs due to sole-source nature. 4. Sector: Defense - critical for surveillance and navigation systems.

Value Assessment

Rating: questionable

The award of $39.5M for the Common Sensor High Definition Payload appears high given the lack of competitive bidding. Without market comparison, it's difficult to ascertain if the price reflects fair market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there was no competitive pressure to drive down prices.

Taxpayer Impact: The absence of competition may result in taxpayers paying a premium for this critical sensor technology.

Public Impact

Enhances military surveillance and navigation capabilities. Potential for technological advancements in sensor systems. Impact on defense readiness and operational effectiveness.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for overpricing
Sole-source award

Positive Signals

Critical defense technology
Award to established contractor

Sector Analysis

This award falls within the Defense sector, specifically for navigation and guidance systems. Spending in this area is crucial for maintaining technological superiority but requires careful oversight to ensure value.

Small Business Impact

There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. Further analysis would be needed to determine potential opportunities for small business participation.

Oversight & Accountability

The contract was awarded by the Department of Defense, with oversight from the Defense Contract Management Agency. The lack of competition suggests a need for robust oversight to ensure fair pricing and value.

Related Government Programs

Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for inflated pricing
Limited market research evident

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.6 million to RAYTHEON COMPANY. COMMON SENSOR HIGH DEFINITION PAYLOAD

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 $39.6 million.

What is the period of performance?

Start: 2018-05-04. End: 2020-09-30.

What is the justification for awarding this contract sole-source?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Without specific documentation, it's presumed that the DoD identified Raytheon as the only viable provider for this specific high-definition sensor payload, possibly due to specialized technology or integration requirements.

How does the lack of competition impact the long-term cost of this technology?

A sole-source award can lead to higher long-term costs as the government lacks the leverage of competitive bidding. Without market pressure, the contractor may not be incentivized to reduce prices over time. This could necessitate higher future budgets for sustainment, upgrades, or follow-on procurements of this technology.

What are the risks associated with relying on a single supplier for critical sensor technology?

Relying on a single supplier for critical technology like this sensor payload poses significant risks. These include potential supply chain disruptions, price gouging, lack of innovation due to no competitive pressure, and vulnerability if the supplier faces financial or operational difficulties. It also limits the government's options for future upgrades or alternative solutions.

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: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0016418RJQ40

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp (UEI: 001344142)

Address: 2501 W UNIVERSITY DR, MCKINNEY, TX, 75070

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: $39,556,000

Exercised Options: $39,556,000

Current Obligation: $39,556,000

Subaward Activity

Number of Subawards: 14

Total Subaward Amount: $3,032,047

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline