DoD Awards Raytheon $18.1M for DC-DC Convertors, Lacking Competition

Contract Overview

Contract Amount: $18,126,463 ($18.1M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2022-09-27

End Date: 2025-12-31

Contract Duration: 1,191 days

Daily Burn Rate: $15.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CONVERTOR DC TO DC,

Place of Performance

Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $18.1 million to RAYTHEON COMPANY for work described as: CONVERTOR DC TO DC, Key points: 1. Significant award to a major defense contractor. 2. Lack of competition raises concerns about price discovery. 3. Contract supports aircraft parts manufacturing. 4. Long duration suggests potential for cost overruns.

Value Assessment

Rating: questionable

The award amount of $18.1M for DC-DC convertors is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to similar contracts for specialized aircraft components.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source or limited competition award. This significantly limits price discovery and may lead to higher costs for the government.

Taxpayer Impact: The lack of competition means taxpayers may be paying a premium for these essential aircraft components.

Public Impact

Ensures continued supply of critical aircraft components. Supports a major defense contractor's operations. Potential for higher costs due to non-competitive award.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Sole-source award
Long contract duration

Positive Signals

Supports critical defense needs
Award to established contractor

Sector Analysis

This contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector. Spending in this area is crucial for maintaining military readiness, but competitive sourcing is vital to ensure cost-effectiveness.

Small Business Impact

The contract was awarded to Raytheon Company, a large business. There is no indication of small business participation in this specific award, which is common for large, specialized defense contracts.

Oversight & Accountability

The 'NOT COMPETED' status suggests potential oversight gaps or specific justifications for sole-sourcing that warrant further review to ensure fair pricing and value.

Related Government Programs

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

Risk Flags

Lack of competition
Sole-source award
Potential for price inflation
Long contract duration (1191 days)
No small business participation noted

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.1 million to RAYTHEON COMPANY. CONVERTOR DC TO DC,

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 $18.1 million.

What is the period of performance?

Start: 2022-09-27. End: 2025-12-31.

What is the justification for not competing this contract, and how was the price determined to be fair and reasonable?

The justification for not competing this contract is not provided in the data. Typically, sole-source awards require detailed documentation outlining reasons such as unique capabilities, urgent need, or lack of viable alternatives. The price determination process for non-competed contracts relies heavily on cost analysis, historical pricing, or independent government cost estimates to ensure fairness.

What are the risks associated with a sole-source award for critical aircraft components?

Sole-source awards for critical components carry risks of inflated pricing due to the absence of competitive pressure. There's also a risk of vendor lock-in, reduced innovation, and potential supply chain vulnerabilities if the sole provider faces issues. The government may also miss out on cost savings and technological advancements that competition could foster.

How does this contract contribute to the overall effectiveness of the Department of the Navy's aviation assets?

This contract ensures the availability of essential DC-DC convertors, which are likely critical components for the operation and maintenance of various aircraft systems within the Department of the Navy. Reliable access to these parts is fundamental for maintaining fleet readiness and operational effectiveness, preventing mission delays or cancellations.

Industry Classification

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

Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS

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: 2000 E EL SEGUNDO BLVD, EL SEGUNDO, CA, 90245

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: $18,126,463

Exercised Options: $18,126,463

Current Obligation: $18,126,463

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $2,095,388

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0038319GUX01

IDV Type: BOA

Timeline