DoD awards $44.9M contract to Raytheon for ATFLIR system subcomponent repairs

Contract Overview

Contract Amount: $44,940,020 ($44.9M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2020-05-07

End Date: 2025-05-08

Contract Duration: 1,827 days

Daily Burn Rate: $24.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: REPAIR OF 39 NIINS (SUBCOMPONENTS) OF THE ATFLIR SYSTEM.

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75071

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $44.9 million to RAYTHEON COMPANY for work described as: REPAIR OF 39 NIINS (SUBCOMPONENTS) OF THE ATFLIR SYSTEM. Key points: 1. High-value contract for critical aircraft system components. 2. Sole-source award to incumbent provider, Raytheon. 3. Long contract duration (5 years) may limit future competition. 4. Spending falls within the 'Other Aircraft Parts' manufacturing sector.

Value Assessment

Rating: fair

The contract value of $44.9M over five years for subcomponent repairs appears reasonable given the specialized nature of the ATFLIR system. However, without detailed cost breakdowns or comparisons to similar repair contracts, a definitive assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded sole-source, meaning competition was not sought. This approach can lead to higher prices as there is no market pressure to reduce costs. The lack of competition limits price discovery.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding, potentially increasing the overall cost of maintaining the ATFLIR system.

Public Impact

Ensures continued operational readiness of critical naval aviation platforms. Supports a key defense contractor, potentially impacting jobs. Long-term commitment to a specific system may influence future upgrade decisions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
Long contract duration may reduce flexibility.
Lack of small business participation noted.

Positive Signals

Addresses critical repair needs for a vital defense system.
Ensures continuity of operations for naval aircraft.

Sector Analysis

This contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector. Spending in this area is crucial for maintaining the readiness of military aviation fleets. Benchmarks for similar repair contracts are difficult to ascertain due to the specialized nature of the ATFLIR system.

Small Business Impact

The data indicates no specific set-aside for small businesses in this sole-source contract. This suggests that opportunities for small businesses to participate in the repair or supply chain for these specific subcomponents may be limited.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny to ensure fair pricing and value for taxpayer dollars. Robust oversight is needed to monitor performance and costs throughout the contract's duration.

Related Government Programs

Other Aircraft Parts and Auxiliary Equipment Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Sole-source award.
Lack of competition.
Long contract duration.
No small business set-aside.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.9 million to RAYTHEON COMPANY. REPAIR OF 39 NIINS (SUBCOMPONENTS) OF THE ATFLIR SYSTEM.

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 $44.9 million.

What is the period of performance?

Start: 2020-05-07. End: 2025-05-08.

What is the justification for the sole-source award, and has Raytheon's pricing been benchmarked against industry standards for similar complex repair services?

The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Without access to the specific justification documentation, it's difficult to confirm. Benchmarking Raytheon's pricing against industry standards for complex avionics repair is challenging due to the specialized nature of the ATFLIR system and the lack of publicly available comparative data for such niche subcomponents.

What are the potential risks associated with a five-year sole-source contract for critical subcomponent repairs, particularly regarding cost escalation and technological obsolescence?

A five-year sole-source contract carries risks of cost escalation, as the absence of competition removes pressure on the contractor to offer competitive pricing. There's also a risk of technological obsolescence if the subcomponents are not updated or if newer, more efficient technologies emerge during the contract period. The government has limited leverage to negotiate better terms or adopt newer solutions without potentially renegotiating or re-competing the contract.

How will the Department of the Navy ensure effective performance and quality control for these critical ATFLIR subcomponent repairs over the contract's lifespan?

The Department of the Navy will likely employ several oversight mechanisms. These may include detailed performance work statements (PWS), regular progress reviews, acceptance testing of repaired components, and potentially independent government cost estimates. Establishing clear quality assurance surveillance plans (QASP) and maintaining open communication channels with Raytheon are crucial for ensuring effective performance and maintaining the integrity of the ATFLIR system.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0038318R001D

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, 75071

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: $44,940,020

Exercised Options: $44,940,020

Current Obligation: $44,940,020

Subaward Activity

Number of Subawards: 53

Total Subaward Amount: $2,488,434

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0038320DWC01

IDV Type: IDC

Timeline