Raytheon Company awarded $12.5M for DC to DC Convertors, a sole-source contract with a long performance period

Contract Overview

Contract Amount: $12,513,795 ($12.5M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2024-03-19

End Date: 2026-04-29

Contract Duration: 771 days

Daily Burn Rate: $16.2K/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 $12.5 million to RAYTHEON COMPANY for work described as: CONVERTOR DC TO DC, Key points: 1. The contract's value of $12.5 million for convertors suggests a significant need for specialized power management solutions. 2. As a sole-source award, the absence of competition may limit price negotiation advantages for the government. 3. The extended performance period of over two years indicates a long-term requirement for these components. 4. The specific NAICS code 336413 points to a niche manufacturing sector within aerospace and defense. 5. The contract's classification as 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' highlights its specialized nature.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the convertors' specifications and quantity. However, a $12.5 million award for specialized electronic components suggests a substantial investment. Given the sole-source nature, it's difficult to assess if the pricing reflects competitive market rates. Further analysis would require comparing the unit cost and performance characteristics against similar procurements or industry standards for comparable power conversion equipment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the requirement. The lack of competition means the government did not benefit from a bidding process that could drive down prices or foster innovation through multiple proposals.

Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of competitive bidding. This could lead to higher overall costs for the government compared to a competed procurement.

Public Impact

The Department of the Navy benefits from the acquisition of critical power conversion components for its operations. This contract supports the production and delivery of specialized electronic equipment essential for military platforms. The contract's impact is primarily within the defense sector, ensuring the readiness and functionality of naval assets. Workforce implications may include specialized manufacturing roles within Raytheon Company and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential cost savings.
Extended contract duration may tie up significant funds without periodic re-evaluation of market prices.
Lack of transparency in the justification for sole-sourcing could obscure potential alternatives.
Dependence on a single supplier for critical components can create supply chain risks.

Positive Signals

Award to a known entity (Raytheon Company) suggests a level of trust in their capabilities.
The contract addresses a specific, likely critical, need within the Department of Defense.
The firm fixed price contract type provides cost certainty for the government.

Sector Analysis

The aerospace and defense manufacturing sector is characterized by high technological complexity, stringent quality requirements, and significant government procurement. NAICS code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' falls within this broad category. Spending in this area is often driven by defense modernization programs and the need for specialized components. Comparable spending benchmarks would typically involve analyzing other contracts for similar electronic components or aircraft parts awarded to large defense contractors.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false and 'sb': false. The award to a large prime contractor like Raytheon Company suggests that subcontracting opportunities for small businesses may exist, but these are not explicitly mandated or detailed in the provided data. The impact on the small business ecosystem would depend on Raytheon's subcontracting strategy and the availability of small businesses capable of supplying the necessary components or services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm fixed price contract type, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is limited by the sole-source nature of the award; however, contract details are typically available through federal procurement databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Procurement
Naval Aviation Support Equipment
Aerospace Component Manufacturing
Sole-Source Defense Contracts
Electronic Component Procurement

Risk Flags

Sole-source award
Potential for non-competitive pricing
Long contract duration
Lack of detailed technical specifications in summary data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.5 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 $12.5 million.

What is the period of performance?

Start: 2024-03-19. End: 2026-04-29.

What is the specific technical requirement for the 'CONVERTOR DC TO DC' and why was it deemed a sole-source procurement?

The provided data indicates the item is a 'CONVERTOR DC TO DC,' which is a device that converts direct current (DC) from one voltage level to another. The specific technical requirements, such as input/output voltage ranges, current capacity, efficiency, environmental hardening (e.g., for military use), and form factor, are not detailed. The justification for a sole-source award typically stems from factors like unique technical capabilities, proprietary technology, essential interoperability with existing systems, or a lack of viable alternative sources. Without the specific justification documentation (e.g., a Justification and Approval for Other Than Full and Open Competition - J&A), it's impossible to definitively state why this particular convertor requirement was restricted to Raytheon Company. Common reasons include specialized military-grade specifications that only Raytheon can meet, or that the convertor is an integral part of a larger, sole-sourced platform system.

How does the $12.5 million contract value compare to historical spending on similar DC to DC convertors by the Department of Defense?

Comparing the $12.5 million contract value for these DC to DC convertors to historical spending requires access to a broader dataset of similar procurements. The provided data snippet is limited. However, $12.5 million is a substantial amount for electronic components, suggesting either a large quantity of units, very high-specification units, or a combination thereof. To benchmark this, one would need to query federal procurement databases (like FPDS or SAM.gov) for contracts with similar Product Service Codes (PSCs) or NAICS codes (like 336413) related to power conversion equipment, specifically for the Department of Defense or Department of the Navy. Analyzing the average contract value, the number of bidders on competed contracts, and the unit prices for comparable items over the past several years would provide context. A sole-source award of this magnitude warrants scrutiny to ensure the price is reasonable in the absence of competition.

What are the potential risks associated with a sole-source award of this magnitude and duration?

A sole-source award of $12.5 million with a duration extending to April 2026 presents several potential risks. Firstly, the lack of competition means the government may be paying a premium price, as there was no opportunity for vendors to bid against each other to offer the best value. This can lead to inefficient use of taxpayer funds. Secondly, reliance on a single supplier, Raytheon Company in this case, creates supply chain vulnerability. If Raytheon faces production issues, quality control problems, or financial instability, the Department of the Navy's operations could be significantly disrupted. Thirdly, the extended performance period might mean the government is locked into potentially outdated technology or pricing structures for an extended time, missing out on advancements or more cost-effective solutions that might emerge in the market. Finally, the justification for sole-sourcing itself could be flawed, potentially overlooking viable competitive alternatives.

What is Raytheon Company's track record with the Department of the Navy for similar electronic components or power systems?

Raytheon Company is a major defense contractor with an extensive and long-standing relationship with the Department of the Navy (DoN). While the specific data provided doesn't detail their history with DC to DC convertors, Raytheon is known for producing a wide array of complex electronic systems, avionics, and power management solutions for naval platforms. Their track record with the DoN includes numerous large contracts for aircraft, missiles, sensors, and communication systems. Generally, large defense contractors like Raytheon have established quality management systems and experience navigating the rigorous requirements of military procurement. However, past performance on other contract types or for different systems doesn't automatically guarantee optimal value or performance on this specific sole-source award. A thorough review would involve examining past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) specifically related to similar procurements, if available.

What are the performance metrics or deliverables expected under this contract, and how will they be measured?

The provided data indicates the contract is for 'CONVERTOR DC TO DC' with a delivery order (awarded under a larger contract, likely an IDIQ). The performance metrics and deliverables are not explicitly detailed in this snippet. However, for a contract of this nature, key performance indicators (KPIs) would typically include adherence to technical specifications (voltage, current, efficiency, reliability), delivery schedules, quality standards (e.g., defect rates), and potentially warranty provisions. Measurement would likely involve source inspection, testing of delivered units (both by the contractor and potentially by the government), review of test reports, and tracking of delivery timeliness against the contract schedule. The firm fixed price nature implies that meeting these defined deliverables is paramount for the contractor to receive full payment.

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: Rockwell Collins Australia PTY Limited

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: $12,513,795

Exercised Options: $12,513,795

Current Obligation: $12,513,795

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