DoD's $14.1M Raytheon Contract for Navigation Systems: A Decade-Long Sole Source Award
Contract Overview
Contract Amount: $14,145,336 ($14.1M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2004-04-29
End Date: 2013-03-09
Contract Duration: 3,236 days
Daily Burn Rate: $4.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Place of Performance
Location: MCKINNEY, COLLIN County, TEXAS, 75070, UNITED STATES OF AMERICA
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $14.1 million to RAYTHEON COMPANY for work described as: Key points: 1. Significant contract value of $14.1 million awarded to Raytheon Company. 2. Sole-source award raises questions about competition and potential overpricing. 3. Long contract duration (2004-2013) suggests a sustained need, but also a missed opportunity for competitive bidding. 4. The sector is critical for defense operations, highlighting the importance of efficient procurement.
Value Assessment
Rating: questionable
Without competitive bids, it's difficult to assess if the Cost Plus Fixed Fee pricing was optimal. The benchmark for similar navigation system contracts is unavailable, making a direct comparison challenging.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award. This limits price discovery and may lead to higher costs for taxpayers compared to a competitive process.
Taxpayer Impact: The lack of competition likely resulted in a higher cost to taxpayers than if the contract had been subject to open bidding.
Public Impact
Taxpayers may have paid a premium due to the absence of competitive bidding. The long duration of the sole-source contract could indicate a lack of market competition or strategic sourcing decisions. Essential defense navigation systems were procured without exploring potentially more cost-effective options.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Cost-plus contract type
- Long contract duration
Positive Signals
- Awarded to a major defense contractor
- Contract supported critical defense systems
Sector Analysis
This contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector. Spending in this area is crucial for national defense, but competitive procurement is vital to ensure cost-effectiveness.
Small Business Impact
There is no indication that small businesses were involved in this contract, as it was a sole-source award to Raytheon Company.
Oversight & Accountability
The sole-source nature of this award warrants further review to ensure proper justification and that taxpayer funds were used efficiently. Oversight should focus on the necessity of sole-sourcing for such critical systems.
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 lacks transparency.
- Potential for inflated costs due to lack of competition.
- Long contract duration may indicate missed competitive opportunities.
- Cost-plus contract type can lead to cost overruns.
- Technology obsolescence risk over a 10-year period.
Tags
search-detection-navigation-guidance-aer, department-of-defense, tx, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $14.1 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 $14.1 million.
What is the period of performance?
Start: 2004-04-29. End: 2013-03-09.
What was the justification for awarding this contract as sole-source to Raytheon Company, and were alternative solutions or contractors ever considered?
The provided data does not specify the justification for the sole-source award. Typically, sole-sourcing is used when only one responsible source can provide the required supplies or services. However, without further documentation, it's impossible to confirm if alternatives were explored or if this was a strategic decision based on unique capabilities or existing systems.
How does the Cost Plus Fixed Fee structure impact the risk and potential cost overruns for this navigation system contract?
Cost Plus Fixed Fee contracts share cost risks between the government and the contractor. While the contractor is incentivized to control costs to maximize their fixed fee, the government bears the risk of cost overruns if initial estimates are inaccurate. This structure can lead to higher overall costs compared to fixed-price contracts, especially over a long duration.
What is the long-term effectiveness and technological relevance of the navigation systems procured under this decade-long contract?
The effectiveness and technological relevance of systems procured over a decade ago are questionable without knowing the specific technology and upgrade paths. Defense technology evolves rapidly, and systems acquired between 2004 and 2013 might be outdated. Further analysis would be needed to assess their current operational status and continued utility.
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: RESEARCH AND DEVELOPMENT › General Science and Technology R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 2501 W UNIVERSITY DRIVE M, MC KINNEY, TX, 75070
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $39,860,411
Exercised Options: $39,860,411
Current Obligation: $14,145,336
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2004-04-29
Current End Date: 2013-03-09
Potential End Date: 2013-03-09 00:00:00
Last Modified: 2015-03-03
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