Navy awards $14M Raytheon contract for circuit cards, raising competition concerns

Contract Overview

Contract Amount: $14,059,579 ($14.1M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2022-11-22

End Date: 2025-12-30

Contract Duration: 1,134 days

Daily Burn Rate: $12.4K/day

Competition Type: NOT COMPETED

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 $14.1 million to RAYTHEON COMPANY for work described as: CIRCUIT CARD ASSEMB Key points: 1. Significant contract value for specialized aircraft parts. 2. Sole-source award to Raytheon Company limits competitive pricing. 3. Potential risk of inflated costs due to lack of competition. 4. Spending concentrated in the Defense sector, specifically aircraft parts manufacturing.

Value Assessment

Rating: questionable

The $14 million contract for circuit cards is a substantial amount. Without competitive bidding, it's difficult to assess if this price is fair compared to market rates for similar components from other manufacturers.

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 considered. This significantly limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The lack of competition in this sole-source award may result in taxpayers paying a premium for these critical circuit cards.

Public Impact

Taxpayers may be overpaying for essential aircraft components due to a lack of competitive bidding. The Department of the Navy relies on Raytheon for these specific circuit cards, highlighting potential single-source dependency. The long contract duration (over 3 years) means sustained potential for overpayment if pricing is not optimized.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for overpricing

Positive Signals

Award to established defense contractor
Contract supports critical defense needs

Sector Analysis

This contract falls within the Defense sector, specifically the manufacturing of aircraft parts. Spending benchmarks in this area are highly variable based on technological complexity and specific component requirements.

Small Business Impact

The contract was awarded to Raytheon Company, a large corporation, and there is no indication that small businesses were involved in this specific sole-source award.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny. Oversight should focus on ensuring the necessity of the sole-source justification and verifying the reasonableness of the price through independent analysis.

Related Government Programs

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

Risk Flags

Sole-source award limits competition.
Potential for inflated pricing.
Lack of transparency in price negotiation.
Dependency on a single supplier.
Contract duration extends potential for overpayment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.1 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 $14.1 million.

What is the period of performance?

Start: 2022-11-22. End: 2025-12-30.

What is the justification for the sole-source award, and has the Navy explored alternative sourcing options?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. The Navy should have documented this justification. It's crucial to verify if alternatives were truly unavailable or if the sole-source path was chosen for convenience, which could be a missed opportunity for cost savings.

How does the unit cost of these circuit cards compare to similar components procured competitively by the DoD or other agencies?

Without access to specific component details and market data, a direct comparison is challenging. However, the absence of competition inherently raises a red flag. A thorough analysis would involve benchmarking against publicly available data for comparable electronic components, considering factors like technological specifications, volume, and supplier type.

What is the potential impact on operational readiness if Raytheon is the only supplier for these critical circuit cards?

Sole-source dependency on a single supplier for critical components like circuit cards can pose a significant risk to operational readiness. Any disruption in Raytheon's supply chain, production issues, or price increases could directly impact the Navy's ability to maintain its aircraft fleet, potentially leading to delays or grounding of essential assets.

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

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: $14,059,579

Exercised Options: $14,059,579

Current Obligation: $14,059,579

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