Raytheon Company awarded $58.5M contract for wireless communications equipment by the Navy

Contract Overview

Contract Amount: $58,501,152 ($58.5M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2024-01-01

End Date: 2025-12-31

Contract Duration: 730 days

Daily Burn Rate: $80.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NAVY ACQUISITION

Place of Performance

Location: GOLETA, SANTA BARBARA County, CALIFORNIA, 93117

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $58.5 million to RAYTHEON COMPANY for work described as: NAVY ACQUISITION Key points: 1. Contract awarded via a sole-source justification, raising questions about potential cost efficiencies. 2. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle, suggesting a pre-existing relationship. 3. Fixed-price contract type aims to control costs, but the lack of competition limits price discovery. 4. The duration of 730 days provides a stable period for delivery and potential performance. 5. Focus on wireless communications equipment aligns with modern defense needs. 6. The awardee, Raytheon Company, is a major defense contractor with extensive experience.

Value Assessment

Rating: fair

Benchmarking the value of this specific delivery order is challenging without knowing the terms of the parent IDIQ contract and the specific equipment procured. However, the absence of competition suggests that taxpayers may not be receiving the most advantageous pricing. Comparing this to similar sole-source awards for specialized wireless communications equipment would be necessary for a more precise value assessment. The firm fixed-price nature provides some cost certainty, but the overall value proposition is diminished by the lack of competitive bidding.

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 solicited. This approach bypasses the competitive bidding process typically used to ensure fair market prices and identify the best value. While sole-source awards can be justified for unique capabilities or urgent needs, they limit the government's ability to leverage market forces for cost savings and innovation.

Taxpayer Impact: The lack of competition means taxpayers may be paying a premium for this equipment, as there was no opportunity for multiple vendors to bid and drive down prices.

Public Impact

The U.S. Navy benefits from the acquisition of critical wireless communications equipment. This contract supports the modernization of naval communication systems. The primary impact is on the operational readiness and technological capabilities of naval forces. The contract supports jobs within Raytheon Company and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Lack of transparency in the justification for sole-source procurement.
Potential for cost overruns if pricing was not adequately scrutinized without competition.

Positive Signals

Firm fixed-price contract type provides cost certainty for the government.
Awardee is a reputable defense contractor with a proven track record.
Contract duration allows for planned integration and deployment of equipment.

Sector Analysis

The defense sector, particularly within communications and electronics manufacturing, is characterized by high barriers to entry and significant R&D investment. Companies like Raytheon are key players in providing advanced technological solutions to government agencies. Spending in this area is driven by the need for secure, reliable, and cutting-edge communication systems to maintain military superiority. Comparable spending benchmarks would involve analyzing other sole-source or competitively awarded contracts for similar specialized wireless equipment within the Department of Defense.

Small Business Impact

This contract does not appear to involve a small business set-aside. As a sole-source award to a large prime contractor, there is no direct indication of subcontracting opportunities for small businesses within this specific award. The impact on the small business ecosystem is neutral to potentially negative if competitive opportunities that could have gone to small businesses were instead awarded to the prime.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contract management and oversight mechanisms, potentially involving the Defense Contract Management Agency (DCMA) for performance monitoring. Accountability is established through the contract terms and the firm fixed-price structure. Transparency is limited due to the sole-source nature of the award, with justifications for such awards usually being internal to the agency unless publicly released. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Navy Tactical Networks
Defense Communications Systems
Wireless Communication Equipment Procurement
Raytheon Company Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for non-competitive pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $58.5 million to RAYTHEON COMPANY. NAVY ACQUISITION

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $58.5 million.

What is the period of performance?

Start: 2024-01-01. End: 2025-12-31.

What is the specific justification provided by the Department of Defense for awarding this contract on a sole-source basis to Raytheon Company?

The provided data indicates the contract was 'NOT COMPETED' and is a 'DELIVERY ORDER'. Typically, sole-source justifications for such awards stem from reasons like the existence of only one responsible source capable of providing the required goods or services, urgent and compelling needs that preclude full and open competition, or specific national security requirements. Without access to the official justification document (e.g., a Justification and Approval - J&A), the precise rationale remains unknown. However, common reasons include proprietary technology, unique manufacturing capabilities, or essential integration with existing sole-source systems. The Navy likely cited one of these factors to bypass the competitive bidding process for this specific wireless communications equipment.

How does the $58.5 million value of this delivery order compare to other similar wireless communications equipment contracts awarded by the Navy or DoD?

Direct comparison of this $58.5 million delivery order to other wireless communications equipment contracts requires access to a broader dataset of federal procurement. However, as a sole-source award, its value is inherently less scrutinized than a competitively won contract. If this represents a significant portion of the total value of the parent IDIQ contract, it could indicate a substantial investment. To benchmark effectively, one would need to identify comparable contracts for similar types of advanced wireless equipment (e.g., secure radios, tactical data links, satellite communication terminals) awarded over the same period, noting whether they were competed or sole-sourced, and analyze their total values and per-unit costs. The absence of competition here suggests potential for a higher price than if multiple vendors had vied for the contract.

What are the key performance indicators (KPIs) or metrics used to assess the performance of Raytheon Company under this contract?

Performance assessment for this contract would likely be governed by the terms outlined in the parent IDIQ contract and this specific delivery order. Key performance indicators (KPIs) would typically focus on the timely delivery of the wireless communications equipment, adherence to technical specifications and quality standards, and potentially post-delivery support or warranty provisions. The firm fixed-price nature incentivizes Raytheon to meet these requirements within budget. The Defense Contract Management Agency (DCMA) or the relevant Navy contracting office would be responsible for monitoring Raytheon's performance against these metrics. Specific KPIs might include delivery schedules, defect rates, compliance with cybersecurity standards for communication equipment, and successful integration testing.

What is the historical spending pattern for wireless communications equipment by the Navy, and how does this $58.5 million award fit into that trend?

Analyzing historical spending patterns for wireless communications equipment by the Navy requires access to historical procurement data. Without that specific data, it's difficult to definitively place this $58.5 million award. However, the Navy, like other branches of the military, consistently invests in communication technology due to its critical role in operations. Spending in this area is generally driven by modernization efforts, replacing aging equipment, and adapting to evolving threats and technological advancements. This award, being a delivery order under an IDIQ, suggests it's part of an ongoing or established procurement strategy. If the Navy has a history of awarding significant sums for similar equipment, this $58.5 million might represent a typical or even moderate investment. Conversely, if such awards are infrequent, it could signify a major upgrade or a new capability acquisition.

What are the potential risks associated with a sole-source award for critical defense communication equipment, and what mitigation strategies are in place?

The primary risks associated with a sole-source award for critical defense communication equipment include higher costs due to lack of competition, potential for vendor lock-in, reduced innovation incentives, and supply chain vulnerabilities if the sole source faces disruptions. Mitigation strategies often involve rigorous negotiation of terms and pricing, establishing clear performance standards, requiring robust warranties and support, and potentially developing alternative sources or technologies over the long term. The government might also conduct thorough market research even for sole-source justifications to ensure no viable alternatives exist. For this specific contract, the firm fixed-price structure helps mitigate cost overrun risks, and Raytheon's established position may imply a degree of reliability, though the inherent risks of sole-sourcing remain.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

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: 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: $58,501,152

Exercised Options: $58,501,152

Current Obligation: $58,501,152

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $1,632,080

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0038322DT001

IDV Type: IDC

Timeline