Raytheon Company awarded $13M for Antenna Control Elements, with limited competition impacting price discovery

Contract Overview

Contract Amount: $13,015,371 ($13.0M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2024-04-03

End Date: 2027-06-30

Contract Duration: 1,183 days

Daily Burn Rate: $11.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ANTENNA CONTROL ELE

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75071

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $13.0 million to RAYTHEON COMPANY for work described as: ANTENNA CONTROL ELE Key points: 1. The contract value of $13.01 million for Antenna Control Elements suggests a significant investment in specialized aircraft components. 2. The 'NOT COMPETED' status raises concerns about potential overpayment and lack of market-driven pricing. 3. The fixed-price contract type aims to control costs, but the absence of competition limits the ability to verify value. 4. The duration of the contract (over 3 years) indicates a long-term need for these components. 5. The award to Raytheon Company, a major defense contractor, places this within the context of large-scale defense procurement. 6. The specific product classification (NAICS 336413) points to a niche manufacturing sector within aerospace. 7. The contract's geographic location in Texas may have implications for regional economic impact and workforce development.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without competitive bids. The $13.01 million award for Antenna Control Elements, while substantial, cannot be definitively assessed for value-for-money due to the sole-source nature of the award. Without comparison to similar contracts or market rates derived from a competitive process, it is difficult to ascertain if the pricing is optimal. The fixed-price nature provides some cost certainty, but the lack of competition means taxpayers may not be receiving the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This approach is typically used when only one source is capable of meeting the requirement, or in specific circumstances where competition is not feasible or advantageous. The absence of multiple bidders means that the government did not benefit from the price discovery mechanisms inherent in a competitive bidding process, potentially leading to higher costs.

Taxpayer Impact: The lack of competition means taxpayers may have paid a premium for these Antenna Control Elements, as there was no market pressure to drive down prices.

Public Impact

The primary beneficiaries are likely the Department of the Navy and its operational readiness, ensuring the functionality of aircraft systems. The services delivered involve the manufacturing and supply of critical Antenna Control Elements, essential for aviation technology. The geographic impact is centered in Texas, where the contractor is located, potentially supporting local jobs and the regional economy. Workforce implications may include specialized manufacturing roles within Raytheon Company's facilities in Texas.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about price reasonableness and potential for inflated costs.
Sole-source awards can limit innovation by not exploring alternative solutions from other potential suppliers.
Dependence on a single contractor for critical components can create supply chain risks.
Transparency in the justification for a sole-source award is crucial for public trust.

Positive Signals

The fixed-price contract type offers cost certainty for the government, assuming the initial price was fair.
Awarding to a known entity like Raytheon Company suggests a reliance on established capabilities and quality.
The contract duration indicates a stable, long-term requirement, allowing for potential production efficiencies.

Sector Analysis

The aerospace manufacturing sector, particularly for aircraft parts and auxiliary equipment (NAICS 336413), is a highly specialized and technologically advanced industry. This contract falls within the broader defense industrial base, where spending is often characterized by long procurement cycles, high research and development costs, and significant government oversight. Comparable spending benchmarks are difficult to establish for niche components without competitive data, but the overall defense procurement budget runs into hundreds of billions annually, with a substantial portion allocated to aircraft and related systems.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. Furthermore, the absence of competition and the award to a large prime contractor like Raytheon Company suggests limited direct subcontracting opportunities for small businesses through this specific award mechanism. While Raytheon may have its own small business subcontracting goals, this particular contract does not appear to be structured to directly promote small business participation.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a sole-source award, the justification and negotiation process would be subject to scrutiny. Transparency regarding the rationale for the sole-source designation and the pricing negotiation is key. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's lifecycle.

Related Government Programs

Department of Defense Aircraft Procurement
Naval Aviation Systems
Aerospace Component Manufacturing
Defense Supply Chain Management

Risk Flags

Sole-source award lacks competitive pricing.
Potential for overpayment due to lack of market validation.
Supply chain risk associated with single-source dependency.
Limited transparency in the justification for non-competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.0 million to RAYTHEON COMPANY. ANTENNA CONTROL ELE

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 $13.0 million.

What is the period of performance?

Start: 2024-04-03. End: 2027-06-30.

What is the specific function and criticality of these 'Antenna Control Elements' within the Navy's aircraft systems?

Antenna Control Elements are crucial components responsible for the precise positioning and operation of radar and communication antennas on naval aircraft. They ensure that antennas can be directed accurately to track targets, communicate effectively, and gather intelligence. Their criticality stems from their direct impact on the mission effectiveness and situational awareness of the aircraft. Failure or malfunction of these elements could significantly degrade or disable key sensor and communication systems, potentially compromising the aircraft's ability to perform its intended missions, whether in combat, surveillance, or support roles. The specific design and performance requirements are highly specialized, often tailored to the unique operating environment and mission profile of naval aviation platforms.

What is the historical spending pattern for 'Antenna Control Elements' by the Department of the Navy or similar entities?

Analyzing historical spending patterns for 'Antenna Control Elements' requires access to detailed procurement databases. Without specific data points for this exact component, a general trend in defense spending on aircraft components can be observed. The Department of Defense consistently allocates significant portions of its budget to sustain and modernize its aircraft fleet, which includes a vast array of specialized electronic and mechanical parts. Spending on such components is often driven by fleet size, operational tempo, modernization programs, and the lifecycle of existing platforms. Historically, sole-source or limited-competition awards have been common for highly specialized or proprietary components, leading to potentially fluctuating price points over time depending on contract type and negotiation. A detailed analysis would involve tracking awards for similar NAICS codes (e.g., 336413) and specific contract line item numbers over several fiscal years to identify trends in volume, pricing, and contractor awards.

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

The primary risk associated with a sole-source award for critical aircraft components is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government has less leverage to negotiate the best possible price, potentially leading to higher costs for taxpayers. Another significant risk is the lack of innovation; a sole-source award may discourage other capable manufacturers from developing alternative or improved solutions. Furthermore, reliance on a single supplier can create supply chain vulnerabilities. If the sole-source provider experiences production issues, quality control problems, or faces financial instability, it could lead to significant delays or disruptions in the supply of these critical parts, impacting aircraft availability and operational readiness. Ensuring robust oversight and justification for the sole-source determination is crucial to mitigate these risks.

How does the fixed-price contract type mitigate risks in this sole-source scenario?

The fixed-price contract type (FIRM FIXED PRICE) in this sole-source scenario offers a degree of cost certainty for the government. Under this type of contract, the price is set and not subject to adjustment based on the contractor's cost experience. This shifts the risk of cost overruns from the government to the contractor. If Raytheon Company incurs higher-than-expected costs in producing the Antenna Control Elements, their profit margin will decrease, but the government's payment obligation remains fixed. This is particularly beneficial in a sole-source situation where competitive benchmarking is absent, as it caps the government's financial exposure. However, it is crucial that the initial fixed price was negotiated fairly and based on realistic cost estimates, as the government loses the opportunity to benefit from potential cost savings discovered through competition.

What is Raytheon Company's track record in supplying similar components to the Department of Defense?

Raytheon Company, now part of RTX, has an extensive and long-standing track record as a major defense contractor supplying a wide array of complex systems and components to the Department of Defense and other government agencies. Their portfolio includes advanced electronics, sensors, communication systems, and aerospace components. For the Department of the Navy specifically, Raytheon has been a key supplier for various naval aviation platforms, contributing to radar systems, electronic warfare capabilities, and other critical subsystems. Their history generally reflects a capacity to deliver sophisticated technology, though like any large contractor, they have experienced contract reviews and performance evaluations across their diverse product lines. Information on their specific performance related to antenna control elements would require a deeper dive into contract performance reports and historical delivery data.

Are there any alternative suppliers or technologies that could fulfill the requirement for Antenna Control Elements, and why might they not have been considered?

Identifying alternative suppliers or technologies requires a thorough market analysis, which is often the justification for a sole-source award if deemed impractical or too costly to conduct. Potential alternatives could exist within specialized aerospace component manufacturers or companies developing advanced antenna positioning systems. However, several factors might lead to the exclusion of alternatives in a sole-source determination. These can include unique technical specifications that only Raytheon can meet due to proprietary designs or patents, stringent qualification and testing requirements specific to the naval platform that only Raytheon has already satisfied, or the prohibitive cost and time required to re-qualify a new supplier and their components for critical defense applications. The government's justification for the sole-source award would typically detail why alternatives were not pursued, often citing factors like urgency, unique capabilities, or prohibitive costs of competition.

Industry Classification

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

Product/Service Code: INSTRUMENTS AND LABORATORY 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: 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: $13,015,371

Exercised Options: $13,015,371

Current Obligation: $13,015,371

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $237,608

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: N0038319GPF01

IDV Type: BOA

Timeline