DoD Awards $10M Controller Assembly Contract to Raytheon Company, Sole-Source

Contract Overview

Contract Amount: $10,081,390 ($10.1M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2020-04-23

End Date: 2026-12-31

Contract Duration: 2,443 days

Daily Burn Rate: $4.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CONTROLLER ASSEMBLY

Place of Performance

Location: GOLETA, SANTA BARBARA County, CALIFORNIA, 93117

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $10.1 million to RAYTHEON COMPANY for work described as: CONTROLLER ASSEMBLY Key points: 1. High value contract awarded to a major defense contractor. 2. Sole-source award raises questions about competition and potential price inflation. 3. Long contract duration (2020-2026) suggests a critical, ongoing need. 4. The sector is industrial control manufacturing, vital for military operations.

Value Assessment

Rating: questionable

The award value of $10,008,139 is significant. Without competitive bids, it's difficult to assess if this price is optimal compared to market rates for similar controller assemblies.

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 may result in higher costs for taxpayers compared to a competitive process.

Taxpayer Impact: The lack of competition in this sole-source award could lead to inflated prices, impacting taxpayer value.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. The long-term nature of the contract (over 6 years) locks in this potentially non-competitive pricing. Dependence on a single supplier for critical components can create supply chain risks.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Long contract duration

Positive Signals

Award to established contractor
Clear contract end date

Sector Analysis

The Department of Defense frequently procures industrial control systems and components. Spending in this area is critical for maintaining operational readiness, but often involves complex, specialized equipment where sole-source awards can occur.

Small Business Impact

This contract was awarded to Raytheon Company, a large prime contractor. There is no indication that small businesses were involved in this specific award, either as subcontractors or prime contractors.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny to ensure fair pricing and prevent potential waste. Further review of the justification for not competing the contract is recommended.

Related Government Programs

Relay and Industrial Control Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Sole-source award lacks competition
Potential for inflated pricing
Long contract duration limits future flexibility
Supply chain dependency on a single vendor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.1 million to RAYTHEON COMPANY. CONTROLLER ASSEMBLY

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 $10.1 million.

What is the period of performance?

Start: 2020-04-23. End: 2026-12-31.

What was the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?

The justification for a sole-source award typically involves factors such as unique capabilities, urgent need, or lack of available alternatives. Without access to the specific contract documentation, it's impossible to determine the precise reason. However, the absence of competition raises concerns about whether the government explored all viable options to secure the best value.

What is the potential risk to the government if Raytheon Company is the only supplier for this controller assembly?

The primary risk is supply chain vulnerability. If Raytheon faces production issues, delays, or significant price increases, the Department of the Navy could experience disruptions in critical operations. Furthermore, the lack of competition removes the incentive for Raytheon to offer the most cost-effective solution, potentially leading to higher long-term expenditures.

How does the firm fixed price contract type impact the government's financial risk in this sole-source award?

A firm fixed price (FFP) contract aims to transfer risk to the contractor, ensuring the government pays a set price regardless of the contractor's costs. In a sole-source scenario, while the price is fixed, the government lacks the assurance that this fixed price represents the best possible value achievable through competition. The risk shifts from cost overruns to potentially paying a premium.

Industry Classification

NAICS: Manufacturing › Electrical Equipment Manufacturing › Relay and Industrial Control Manufacturing

Product/Service Code: ELECTRIC WIRE, POWER DISTRIB EQPT

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: RTX Corp

Address: 6380 HOLLISTER AVE, GOLETA, CA, 93117

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: $10,081,390

Exercised Options: $10,081,390

Current Obligation: $10,081,390

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $98,257

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: N0038317GBV01

IDV Type: BOA

Timeline