Raytheon Company awarded $59.1M for Circuit Card Assemblies by the Department of Defense

Contract Overview

Contract Amount: $59,152,723 ($59.2M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2018-12-19

End Date: 2025-08-06

Contract Duration: 2,422 days

Daily Burn Rate: $24.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CIRCUIT CARD ASSEMB

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75071

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $59.2 million to RAYTHEON COMPANY for work described as: CIRCUIT CARD ASSEMB Key points: 1. Value for money appears fair given the firm fixed-price contract type, though detailed cost breakdowns are not publicly available. 2. The contract was not competed, raising questions about potential price discovery and the best value achieved. 3. Risk indicators are moderate, with a long performance period and a sole-source award. 4. Performance context is within the scope of established defense manufacturing capabilities. 5. Sector positioning is within the defense industrial base, specifically for navigation and guidance systems. 6. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle, suggesting a pre-existing relationship and established pricing structure.

Value Assessment

Rating: fair

The contract value of $59.1 million for circuit card assemblies is substantial. Without access to detailed cost proposals or comparable contract data for similar assemblies, a precise value-for-money assessment is challenging. The firm fixed-price contract type offers some cost certainty to the government. However, the lack of competition means there's no direct market benchmark to assess if the pricing is optimal. The duration of the contract (over two years) also needs to be considered in the overall value proposition.

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 specific capability is required that only one source can provide, or in situations where competition is deemed impractical or not in the government's best interest. The lack of multiple bidders means there was no competitive pressure to drive down prices or encourage innovative solutions from a wider market.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no direct comparison to market rates or alternative providers. It also limits opportunities for other businesses to compete for government contracts.

Public Impact

The Department of the Navy benefits from the supply of critical circuit card assemblies. These assemblies are essential components for search, detection, navigation, guidance, and aeronautical/nautical systems. The contract's geographic impact is primarily centered in Texas, where the contractor is located. Workforce implications include continued employment for skilled manufacturing and engineering personnel at Raytheon.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential innovation.
Long contract duration (over two years) may not reflect current market price fluctuations.
Lack of transparency in cost breakdowns hinders detailed value assessment.

Positive Signals

Firm fixed-price contract provides cost predictability for the government.
Award to an established defense contractor suggests a degree of reliability and existing expertise.
Contract supports critical defense systems, ensuring operational readiness.

Sector Analysis

The defense electronics sector is characterized by high technological complexity, stringent quality requirements, and significant R&D investment. Companies like Raytheon are key players, providing specialized components and systems for military applications. The market for circuit card assemblies within defense is substantial, driven by the continuous need for upgrades and maintenance of existing platforms, as well as the development of new technologies. Benchmarking spending in this area is difficult without specific component details, but overall defense electronics procurement runs into billions annually.

Small Business Impact

This contract does not appear to have a small business set-aside component (ss: false, sb: false). As a sole-source award to a large prime contractor, there is no direct indication of subcontracting opportunities for small businesses within this specific award notice. However, large defense contractors are often required to meet overall small business subcontracting goals on their broader contracts, which may indirectly benefit small businesses.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and procurement regulations. The Defense Contract Management Agency (DCMA) likely plays a role in monitoring performance and compliance. Inspector General (IG) investigations could be initiated if any fraud, waste, or abuse is suspected. Transparency is limited due to the sole-source nature and the proprietary information typically associated with defense manufacturing.

Related Government Programs

Department of Defense Procurement
Naval Systems Procurement
Electronic Component Manufacturing
Defense Industrial Base

Risk Flags

Sole-source award
Lack of competition
Long performance period
Limited public cost data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $59.2 million to RAYTHEON COMPANY. CIRCUIT CARD ASSEMB

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 $59.2 million.

What is the period of performance?

Start: 2018-12-19. End: 2025-08-06.

What is Raytheon Company's track record with the Department of Defense for similar circuit card assemblies?

Raytheon Company, now part of RTX, has a long and extensive history of supplying complex electronic systems and components, including circuit card assemblies, to the Department of Defense and its various branches, including the Navy. Their track record generally indicates a capacity to meet stringent military specifications and delivery schedules. However, specific performance metrics for this particular type of assembly under previous contracts would require deeper access to government performance databases (e.g., CPARS) which are not publicly available in detail. Given their established position, it's reasonable to assume a history of successful, albeit sometimes costly, delivery.

How does the awarded price compare to market rates for similar circuit card assemblies?

A direct comparison of the awarded price to market rates for similar circuit card assemblies is challenging without specific technical details of the assemblies and access to a broader market analysis. Circuit card assemblies can vary significantly in complexity, components used, and required certifications, leading to wide price ranges. As this was a sole-source award, there is no competitive benchmark from this specific procurement. To assess value, one would need to compare it against other sole-source or competitively awarded contracts for functionally equivalent assemblies, considering factors like volume, lead time, and technological sophistication. Publicly available data does not provide this granular comparison.

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

The primary risks associated with this sole-source contract include potential overpricing due to the lack of competition, which limits price discovery and negotiation leverage for the government. There's also a risk of reduced innovation, as the contractor may have less incentive to improve processes or offer cost-saving alternatives without competitive pressure. Furthermore, reliance on a single supplier can create supply chain vulnerabilities if the contractor faces production issues or financial instability. The long performance period also introduces risks related to technological obsolescence or changes in military requirements that may not be easily accommodated.

How effective is the Department of the Navy in ensuring value for money on sole-source awards like this?

The Department of the Navy employs various mechanisms to ensure value for money on sole-source awards, though effectiveness can vary. These include conducting should-cost analyses, negotiating pricing based on historical data or industry standards, and leveraging existing contract vehicles where possible. However, the inherent limitation of sole-source procurement is the absence of direct market competition. The effectiveness hinges on the government's ability to accurately estimate costs, negotiate aggressively, and justify the sole-source determination. Without detailed insights into the negotiation process and cost audits for this specific contract, a definitive assessment of effectiveness is difficult.

What are the historical spending patterns for circuit card assemblies by the Department of Defense?

Historical spending patterns for circuit card assemblies by the Department of Defense are substantial and span decades, reflecting their critical role in virtually all military platforms and systems. The DoD procures billions of dollars worth of electronic components, including complex circuit card assemblies, annually. Spending is often concentrated with large defense contractors like Raytheon, Lockheed Martin, and Northrop Grumman, who integrate these components into larger systems. Spending fluctuates based on modernization programs, new platform development, and sustainment requirements for existing fleets. This specific contract represents a portion of that ongoing, significant investment in defense electronics.

What is the potential impact of this contract on the broader defense electronics market?

This contract, while significant in value, represents a single award within the vast defense electronics market. Its direct impact on the broader market is likely limited, primarily benefiting Raytheon and its immediate supply chain. However, it reinforces the established market structure where large, experienced contractors dominate the supply of critical components for major defense programs. It underscores the ongoing demand for specialized electronic manufacturing capabilities within the defense sector and highlights the government's reliance on these key players for national security needs. The sole-source nature might deter smaller or newer entrants from accessing this specific segment.

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

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: $59,152,723

Exercised Options: $59,152,723

Current Obligation: $59,152,723

Subaward Activity

Number of Subawards: 149

Total Subaward Amount: $8,271,837

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: N0038315G005D

IDV Type: BOA

Timeline