Raytheon Company awarded $15.8M for DC to DC convertors, a sole-source contract with a 900-day duration

Contract Overview

Contract Amount: $15,858,649 ($15.9M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2023-12-14

End Date: 2026-06-01

Contract Duration: 900 days

Daily Burn Rate: $17.6K/day

Competition Type: NOT COMPETED

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 $15.9 million to RAYTHEON COMPANY for work described as: CONVERTOR DC TO DC, Key points: 1. The contract value of $15.8 million for convertors suggests a significant need for specialized power management solutions. 2. As a sole-source award, the absence of competition may impact price optimization and potentially lead to higher costs. 3. The 900-day duration indicates a long-term requirement, suggesting the convertors are critical for ongoing operations. 4. The contract falls under 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' highlighting its role in aviation support. 5. The lack of a small business set-aside raises questions about opportunities for smaller firms in this specialized supply chain.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the convertor's technical specifications and performance requirements. However, a $15.8 million award for what appears to be a component suggests a substantial unit cost or a large quantity. Given it was sole-source, a direct comparison to competitively bid alternatives is not possible, which inherently limits a robust value-for-money assessment. Further analysis would require understanding the criticality and unique nature of these convertors to justify the expenditure.

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. The rationale for this approach is not detailed in the provided data, but sole-source awards typically occur when a product or service is unique, proprietary, or when only one responsible source can fulfill the requirement. The lack of competition means that price discovery through market forces was bypassed, potentially leading to a less favorable price for the government compared to a competitive scenario.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. Without multiple offers, there is less assurance that the price reflects the lowest possible cost for these essential convertors.

Public Impact

The Department of the Navy benefits from the acquisition of critical DC to DC convertors, likely for use in naval aviation or other electronic systems. These convertors are essential components for power management within complex military hardware. The contract's impact is primarily within the defense sector, supporting the operational readiness of naval assets. The workforce implications are likely concentrated within Raytheon Company's manufacturing and engineering divisions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency regarding the justification for sole-sourcing.
Potential for vendor lock-in due to specialized nature of the component.

Positive Signals

Award to a known defense contractor (Raytheon Company) suggests a level of established capability and reliability.
Contract duration of 900 days indicates a stable, long-term need, allowing for predictable production and supply.
The specific nature of the component (DC to DC convertor) points to a critical function within a larger system.

Sector Analysis

The defense electronics manufacturing sector is characterized by high technological complexity and significant government procurement. Contracts for specialized components like DC to DC convertors are crucial for the functionality of advanced military platforms. The market is often dominated by a few large, established players due to high barriers to entry, including R&D costs and stringent quality requirements. Spending in this sub-sector is driven by modernization efforts and the need for reliable power solutions in demanding environments. Comparable spending benchmarks would depend heavily on the specific technical requirements and volume of convertors needed.

Small Business Impact

This contract was not set aside for small businesses, nor does it indicate any subcontracting requirements for small businesses. The award to a large prime contractor like Raytheon Company suggests that the primary manufacturing and assembly will occur within their facilities or those of their direct, likely large, suppliers. This limits direct opportunities for small businesses to participate in this specific contract, though they may be involved further down the supply chain.

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 pricing would be subject to scrutiny. Inspector General offices within the Department of Defense may conduct audits to ensure compliance and prevent fraud, waste, and abuse. Transparency is limited by the sole-source nature, but contract modifications and performance reports would be key areas for oversight.

Related Government Programs

Defense Electronics Manufacturing
Aircraft Component Procurement
Power Supply Systems
Naval Aviation Support Equipment

Risk Flags

Sole-source award
Lack of competitive justification
Potential for inflated pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.9 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 $15.9 million.

What is the period of performance?

Start: 2023-12-14. End: 2026-06-01.

What is the specific technical requirement and performance standard for these DC to DC convertors?

The provided data does not detail the specific technical requirements or performance standards for the 'CONVERTOR DC TO DC'. This information is critical for a comprehensive assessment of the contract's value and necessity. Typically, such specifications would include input/output voltage ranges, current capacity, efficiency ratings, operating temperature ranges, environmental resistance (e.g., shock, vibration, humidity), and electromagnetic interference (EMI) characteristics. Without these details, it's difficult to ascertain if the $15.8 million price is justified or if alternative, potentially more cost-effective, solutions exist that meet the same or similar performance criteria.

What was the justification for awarding this contract on a sole-source basis?

The data indicates this contract was 'NOT COMPETED,' signifying a sole-source award. The specific justification for this determination is not provided. Common reasons for sole-sourcing include the unique proprietary nature of the product, the unavailability of other sources, or urgent and compelling circumstances. For a component like a DC to DC convertor, it might be due to a highly specialized design integrated into a specific platform where only Raytheon Company possesses the necessary intellectual property or manufacturing capability. A thorough review of the Justification and Approval (J&A) document would be necessary to understand the government's rationale and assess its validity.

How does the $15.8 million contract value compare to similar procurements for DC to DC convertors?

Direct comparison of the $15.8 million contract value to similar procurements is challenging without knowing the exact specifications, quantity, and type of DC to DC convertors. However, as a sole-source award, this price may not reflect the lowest achievable market rate. If these convertors are standard or semi-standard components, competitive bids could potentially yield a lower overall cost. The value of $15.8 million over a 900-day period suggests a significant investment, and without competitive benchmarking, it's difficult to definitively assess if it represents good value for money. Further investigation into the unit cost and quantity would be needed.

What is Raytheon Company's track record with similar defense contracts, particularly for power electronics?

Raytheon Company is a major defense contractor with extensive experience in various defense systems, including those requiring sophisticated power electronics. They have a long history of supplying components and integrated systems to the Department of Defense and other government agencies. While specific details on their track record for 'DC to DC convertors' are not in the provided data, their general profile suggests a capacity to deliver complex electronic components. Past performance reviews and contract histories for similar items would provide a more granular understanding of their reliability, quality, and pricing consistency in this domain.

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

The primary risk associated with a sole-source contract is the lack of price competition, which can lead to inflated costs for the government and taxpayers. There's also a risk of vendor lock-in, where the government becomes dependent on a single supplier, potentially limiting future flexibility and negotiation power. Furthermore, without the validation of a competitive process, there's a slightly elevated risk regarding the supplier's continued commitment to quality and innovation, although this is mitigated by Raytheon's established reputation. Ensuring robust oversight and clear performance metrics becomes even more critical in sole-source situations.

What is the historical spending pattern for this specific type of component or within this contract category (NAICS 336413)?

The provided data does not include historical spending patterns for this specific 'CONVERTOR DC TO DC' or for the broader NAICS code 336413 (Other Aircraft Parts and Auxiliary Equipment Manufacturing). To assess historical spending, one would need to query federal procurement databases (like FPDS or SAM.gov) for similar contracts awarded to the Department of the Navy or other agencies within this manufacturing category. Analyzing past contract values, durations, and competition levels for related items would help establish a baseline and identify any significant deviations or trends in spending for aircraft parts and auxiliary equipment.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary 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: 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: $15,858,649

Exercised Options: $15,858,649

Current Obligation: $15,858,649

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0038319DUP01

IDV Type: IDC

Timeline