Raytheon Company awarded $5.18M contract for controller assemblies, with no competition

Contract Overview

Contract Amount: $5,176,930 ($5.2M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2020-08-31

End Date: 2026-12-31

Contract Duration: 2,313 days

Daily Burn Rate: $2.2K/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 $5.2 million to RAYTHEON COMPANY for work described as: CONTROLLER ASSEMBLY Key points: 1. Contract value of $5.18M for controller assemblies. 2. Awarded to Raytheon Company by the Department of the Navy. 3. Contract duration spans from August 2020 to December 2026. 4. This is a delivery order under an existing contract. 5. The product is classified under Relay and Industrial Control Manufacturing. 6. The contract type is Firm Fixed Price. 7. The contract was not competed, raising questions about price discovery.

Value Assessment

Rating: questionable

The total contract value is $5.18 million. Without competitive bidding, it is difficult to benchmark the value for money. The firm fixed price structure provides some cost certainty, but the lack of competition means there's no market-driven validation of the pricing. Further analysis would require comparing this to similar controller assemblies procured through competitive means or examining historical pricing for this specific item if available.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source or non-competitive award. The data explicitly states 'NOT COMPETED'. This means there were likely no other bidders considered, potentially due to the nature of the requirement, existing contract vehicles, or specific justifications for non-competition. The lack of multiple bids limits price discovery and may result in higher costs for the government.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure to drive down prices. Without a bidding process, there is less assurance that the government is receiving the best possible price for these controller assemblies.

Public Impact

The Department of the Navy benefits from the procurement of essential controller assemblies. These assemblies are likely critical components for naval systems and operations. The contract supports manufacturing within the Relay and Industrial Control sector. The contract's duration suggests a sustained need for these components. The geographic impact is centered in California, where the contractor is located.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing.
Sole-source awards can limit innovation and access to alternative suppliers.
The long contract duration without re-competition could lead to complacency in cost management.

Positive Signals

Firm Fixed Price contract provides cost certainty for the government.
The award is to an established contractor, Raytheon Company, suggesting potential reliability.
The contract is a delivery order, implying it might be part of a larger, pre-existing framework that has already undergone some level of vetting.

Sector Analysis

The procurement falls within the industrial control and relay manufacturing sector, which is crucial for various industrial and defense applications. This sector involves the production of components that manage and direct electrical power and operational processes. The contract value of $5.18 million is moderate within the context of defense industrial supply chains. Comparable spending benchmarks would typically involve analyzing other contracts for similar control systems or components, particularly those awarded through competitive processes to establish a fair market price.

Small Business Impact

The data indicates that small business participation was not a factor in this specific award (ss: false, sb: false). There is no indication of a small business set-aside or subcontracting plan requirements associated with this particular delivery order. Therefore, this contract does not appear to directly benefit the small business ecosystem or provide opportunities for small business subcontractors.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a delivery order under a potentially larger contract, existing oversight mechanisms for that parent contract would likely apply. Transparency is limited by the non-competitive nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Naval Systems Procurement
Industrial Control Systems
Defense Manufacturing Contracts
Raytheon Company Contracts
Firm Fixed Price Awards

Risk Flags

Non-competitive award
Potential for overpricing
Lack of market price validation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $5.2 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 $5.2 million.

What is the period of performance?

Start: 2020-08-31. End: 2026-12-31.

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

Raytheon Company is a major defense contractor with a long history of supplying various components and systems to the Department of Defense. While specific data on their track record for 'controller assemblies' under the NAICS code 335314 is not provided here, their extensive experience suggests a capacity to meet demanding specifications. However, the lack of competition for this specific $5.18 million contract means that performance history alone does not guarantee optimal pricing or value compared to what might be achieved through a competitive process. Further investigation into past performance reviews and delivery order history for similar items would be necessary for a comprehensive assessment.

How does the $5.18 million contract value compare to similar controller assembly procurements?

Direct comparison of the $5.18 million contract value for these controller assemblies is challenging without knowing the specific technical requirements, quantity, and duration. Crucially, this contract was not competed, making it difficult to establish a market-based benchmark. Typically, competitive awards provide a clearer indication of fair market value. To assess value, one would need to identify comparable contracts for similar industrial control components awarded competitively by the Department of Defense or other federal agencies. Analyzing the price per unit or price per function across multiple competitive bids would offer a more robust comparison than this sole-source award.

What are the primary 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, the government may not be achieving the best possible price for the controller assemblies. Another risk is the potential for reduced innovation, as there is less incentive for the contractor to offer cost-saving improvements or alternative solutions when facing no direct competition. Furthermore, the long duration (2020-2026) without re-competition could lead to complacency in cost management by the contractor. Dependence on a single supplier also presents a supply chain risk if Raytheon Company encounters production issues.

How effective is the Firm Fixed Price (FFP) contract type in managing costs for this procurement?

The Firm Fixed Price (FFP) contract type is generally effective in managing costs by shifting the risk of cost overruns to the contractor. For the government, it provides budget certainty, as the price is set upfront and does not change unless the contract scope is modified. In this case, the $5.18 million award is fixed, meaning the Department of the Navy knows its maximum liability. However, the effectiveness of FFP in ensuring the *best* price is diminished when the contract is awarded non-competitively. While the government knows the cost, it doesn't have assurance that this cost is the most economical achievable in the market due to the absence of competitive pressure.

What are the historical spending patterns for controller assemblies by the Department of the Navy?

Historical spending patterns for controller assemblies by the Department of the Navy are not detailed in the provided data. This specific contract, valued at $5.18 million and awarded in August 2020, represents a single data point. To understand broader spending patterns, one would need to analyze aggregated contract data over several fiscal years, looking at the total amount spent on this product category (NAICS 335314), the number of contracts awarded, the types of competition used (competitive vs. sole-source), and the primary contractors involved. Such an analysis would reveal trends in demand, pricing, and supplier concentration within the Navy's procurement of these items.

What is the significance of the contract being a 'Delivery Order'?

The designation 'DELIVERY ORDER' indicates that this $5.18 million award is not a standalone contract but rather a specific order placed against a pre-existing, potentially larger, indefinite-delivery/indefinite-quantity (IDIQ) contract or a basic ordering agreement (BOA). This implies that the foundational contract under which this order was placed may have already undergone a competitive process or a specific justification for non-competition. Delivery orders typically specify the quantity, price, and delivery schedule for a particular requirement. The fact that it's a delivery order suggests this might be one of many orders placed under a broader agreement, potentially spreading the total value and duration over time.

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: $5,176,930

Exercised Options: $5,176,930

Current Obligation: $5,176,930

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $31,165

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0038317GBV01

IDV Type: BOA

Timeline