Raytheon Company awarded $47.9M for AN/DAS-4 targeting systems, a sole-source contract

Contract Overview

Contract Amount: $47,904,325 ($47.9M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2024-03-04

End Date: 2027-03-23

Contract Duration: 1,114 days

Daily Burn Rate: $43.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AN/DAS-4 MULTI-SPECTRAL TARGETING SYSTEM

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75071

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $47.9 million to RAYTHEON COMPANY for work described as: AN/DAS-4 MULTI-SPECTRAL TARGETING SYSTEM Key points: 1. Contract awarded for advanced multi-spectral targeting systems, crucial for modern military operations. 2. Sole-source award raises questions about price competitiveness and potential for cost savings. 3. Long contract duration (over 3 years) suggests a sustained need for these systems. 4. The firm fixed-price contract type shifts cost risk to the contractor. 5. Awarded to Raytheon Company, a major defense contractor with a significant market presence. 6. Texas is the performance location, potentially impacting local economic and workforce dynamics.

Value Assessment

Rating: questionable

Benchmarking the value of this sole-source contract is challenging without competitive bids. The $47.9 million award for AN/DAS-4 Multi-Spectral Targeting Systems represents a significant investment. Without comparable contract data or a competitive bidding process, it's difficult to definitively assess if the pricing is optimal or if taxpayers are receiving the best possible value. The firm fixed-price nature of the contract does offer some cost certainty, but the lack of competition prevents a direct comparison to market rates or alternative solutions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Raytheon Company, was solicited. This approach is typically used when a unique capability is required, or when only one source can meet the government's needs. The lack of competition means there was no opportunity for other qualified companies to bid, potentially limiting price discovery and innovation that could arise from a competitive environment.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as there is no competitive pressure to drive down costs. This limits the government's ability to secure the most economical solution.

Public Impact

The primary beneficiaries are the Department of the Navy and potentially other branches of the military requiring advanced targeting capabilities. The contract delivers sophisticated AN/DAS-4 Multi-Spectral Targeting Systems, enhancing situational awareness and precision strike capabilities. Performance is located in Texas, suggesting potential economic benefits and job creation within the state. The contract supports the defense industrial base, particularly in specialized electronics and defense systems manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
Lack of transparency in the sole-source justification could obscure potential alternatives or cost-saving opportunities.
Long-term contract duration may lock the government into a specific technology without exploring newer, potentially more cost-effective solutions.
Reliance on a single contractor for critical targeting systems could pose supply chain risks.
The specific capabilities and performance metrics of the AN/DAS-4 system are not detailed, making independent value assessment difficult.

Positive Signals

Firm fixed-price contract shifts cost risk to the contractor, providing budget certainty.
Awarding to a known, established contractor like Raytheon may ensure reliability and proven performance.
The AN/DAS-4 system likely represents advanced, proven technology essential for current military needs.
The contract duration suggests a stable, long-term requirement, allowing for potential economies of scale in production.

Sector Analysis

The AN/DAS-4 Multi-Spectral Targeting System falls within the defense electronics and aerospace manufacturing sector. This sector is characterized by high R&D investment, stringent performance requirements, and often involves complex, sole-source or limited-competition procurements due to specialized technologies. The market for advanced targeting systems is dominated by a few large defense contractors. Spending in this area is driven by evolving military needs and technological advancements, with significant government investment allocated to maintaining technological superiority.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Given the sole-source nature and the specialized technology involved, it is unlikely that significant subcontracting opportunities for small businesses will be mandated or readily available, unless Raytheon proactively engages them for specific components or services. This could limit the direct economic impact on the small business defense ecosystem for this particular award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. Accountability measures are inherent in the firm fixed-price structure, which obligates the contractor to deliver specified goods within the agreed price. Transparency is limited due to the sole-source nature, but contract details and performance reporting would be subject to internal DoD review and potentially Inspector General oversight if performance issues or fraud are suspected.

Related Government Programs

Advanced Targeting Pods
ISR Systems
Defense Electronics Manufacturing
Military Aircraft Systems
Naval Aviation Support Equipment

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for cost overruns
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $47.9 million to RAYTHEON COMPANY. AN/DAS-4 MULTI-SPECTRAL TARGETING SYSTEM

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 $47.9 million.

What is the period of performance?

Start: 2024-03-04. End: 2027-03-23.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data does not explicitly state the justification for the sole-source award. Typically, sole-source procurements are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required supplies or services, or when there is a compelling urgency. For advanced defense systems like the AN/DAS-4, justifications often cite unique technical capabilities, proprietary technology, or the need for commonality with existing fielded systems that only a specific contractor can provide. A detailed justification document would normally be required by the agency to support this determination.

How does the $47.9 million cost compare to similar targeting systems procured competitively?

Direct comparison of the $47.9 million award for the AN/DAS-4 Multi-Spectral Targeting System to competitively procured systems is difficult without access to detailed pricing data for comparable systems. Sole-source awards inherently lack the price discovery mechanism of competition. To assess value, one would need to benchmark against systems with similar technological capabilities (e.g., resolution, spectral bands, range, integration features) that have been awarded through full and open competition. Factors like system maturity, production volume, and specific performance requirements also heavily influence cost, making precise comparisons challenging even with competitive data.

What are the key performance risks associated with this sole-source contract?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competition. Without competing bids, Raytheon may not have the same incentive to offer the lowest possible price. Other risks include potential schedule delays if the contractor encounters unforeseen production issues, and performance risks if the system does not meet the stringent operational requirements of the Department of the Navy. Furthermore, reliance on a single supplier for critical technology can create supply chain vulnerabilities and limit future flexibility in upgrading or replacing the system.

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

Raytheon Company (now RTX) has an extensive and long-standing track record of delivering complex defense systems, including targeting pods and sensors, to the U.S. military and allied nations. They are a prime contractor on numerous large-scale defense programs across various domains (air, land, sea, space). Their history includes the development and production of previous generations of targeting systems, demonstrating significant expertise in this area. While generally considered a reliable supplier, like any major defense contractor, they have faced scrutiny regarding contract costs, performance, and delivery schedules on various programs over the years.

What is the historical spending trend for AN/DAS-4 or similar targeting systems?

Historical spending data for the AN/DAS-4 system specifically is not detailed here, but multi-spectral targeting systems are a consistent and significant investment area for defense agencies. Spending on such systems typically reflects evolving threats, technological advancements, and the operational tempo of military forces. Over the past decade, there has been a continuous demand for more advanced, persistent, and precise targeting capabilities, driving sustained procurement. Budgets for these systems can fluctuate based on overall defense spending priorities, specific platform integration needs, and the lifecycle of existing systems being replaced or upgraded.

How does the contract duration of over three years impact potential cost savings or technological obsolescence?

A contract duration of over three years (1114 days) for the AN/DAS-4 system offers potential benefits like production efficiencies and stable supply chains for Raytheon, which could translate into more predictable costs. However, it also carries risks. For the government, a long-term commitment might preclude adopting newer, potentially superior, or more cost-effective technologies that emerge during the contract period, leading to technological obsolescence. It also limits the opportunity to re-evaluate the market for better pricing or alternative solutions if market conditions change significantly over the contract's life.

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: N0016422RJQ65

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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: $47,904,325

Exercised Options: $47,904,325

Current Obligation: $47,904,325

Subaward Activity

Number of Subawards: 30

Total Subaward Amount: $5,128,169

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0016422GJQ65

IDV Type: BOA

Timeline