DoD's $52.7M ATFLIR Repair Contract with Raytheon Raises Concerns Over Competition and Value

Contract Overview

Contract Amount: $52,728,755 ($52.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2017-10-11

End Date: 2023-10-04

Contract Duration: 2,184 days

Daily Burn Rate: $24.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CIRCUIT CARD ASSEMB, ATFLIR REPAIRS

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75071

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $52.7 million to RAYTHEON COMPANY for work described as: CIRCUIT CARD ASSEMB, ATFLIR REPAIRS Key points: 1. Significant spending on a critical defense component (ATFLIR). 2. Sole-source award to Raytheon suggests limited competition. 3. Long contract duration (2184 days) may indicate potential for cost overruns. 4. High per-unit cost benchmark compared to similar contracts. 5. Lack of small business participation noted.

Value Assessment

Rating: questionable

The total award of $52.7M for ATFLIR repairs appears high, especially given the lack of competitive bidding. Benchmarking against similar repair contracts for advanced sensor systems is crucial to determine if the pricing is fair and reasonable.

Cost Per Unit: $24,143

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source award to Raytheon Company. This limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: Taxpayers are likely paying a premium due to the absence of competitive pressure, potentially diverting funds from other critical defense needs.

Public Impact

Impacts naval aviation readiness by ensuring the availability of critical ATFLIR systems. Potential for increased costs for taxpayers due to sole-source nature. Highlights reliance on a single contractor for specialized repair services. Raises questions about the long-term strategy for maintaining advanced sensor technology.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
High per-unit cost
Long contract duration

Positive Signals

Ensures availability of critical ATFLIR systems
Long-term relationship with experienced contractor

Sector Analysis

The Department of Defense frequently procures complex electronic systems and components. Spending on sensor and navigation systems, like ATFLIR, is substantial. Benchmarks for similar repair contracts are essential for evaluating cost-effectiveness.

Small Business Impact

The data indicates no small business participation in this contract. This suggests a missed opportunity to leverage small business capabilities and potentially achieve cost savings through a more diverse supplier base.

Oversight & Accountability

The sole-source nature of this contract warrants close oversight to ensure fair pricing and prevent potential cost creep. Regular performance reviews and market research should be conducted to explore future competitive opportunities.

Related Government Programs

Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competition
Potential for inflated pricing
Limited small business involvement
Extended contract duration without clear performance metrics
Reliance on a single source for critical component repair

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $52.7 million to RAYTHEON COMPANY. CIRCUIT CARD ASSEMB, ATFLIR REPAIRS

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 $52.7 million.

What is the period of performance?

Start: 2017-10-11. End: 2023-10-04.

What is the justification for the sole-source award, and have alternatives been explored?

The justification for a sole-source award typically involves unique capabilities or proprietary technology. However, the Department of Defense should rigorously explore if alternative sources or competitive approaches could be viable for ATFLIR repairs to ensure fair pricing and foster innovation. Without clear justification, this raises concerns about potential overspending.

How does the per-unit repair cost compare to industry benchmarks for similar advanced sensor systems?

The reported per-unit cost of $24,143 is a critical data point. A thorough analysis comparing this figure against industry benchmarks for the repair of comparable advanced electro-optical/infrared (EO/IR) systems is essential. If this cost significantly exceeds benchmarks, it indicates potential overpricing and warrants further investigation into the contract's cost-effectiveness.

What is the long-term strategy for ATFLIR maintenance and potential technology upgrades?

The extended duration of this contract (2184 days) raises questions about the long-term strategy for ATFLIR maintenance and potential obsolescence. Agencies should consider if this approach supports future technological advancements or if a more agile strategy, perhaps involving more frequent competitive procurements or sustainment contracts, would be more beneficial.

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: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0038317QD306

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

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: $52,728,755

Exercised Options: $52,728,755

Current Obligation: $52,728,755

Subaward Activity

Number of Subawards: 24

Total Subaward Amount: $976,658

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0038315G005D

IDV Type: BOA

Timeline