DoD Awards Raytheon $11.1M for DC-DC Convertors, Lacking Competition

Contract Overview

Contract Amount: $11,089,492 ($11.1M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2023-10-25

End Date: 2025-12-31

Contract Duration: 798 days

Daily Burn Rate: $13.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

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 $11.1 million to RAYTHEON COMPANY for work described as: CONVERTOR DC TO DC, Key points: 1. Significant award to a major defense contractor. 2. Lack of competition raises concerns about price discovery. 3. Contract duration extends over two years. 4. Sector focus on aircraft parts manufacturing.

Value Assessment

Rating: questionable

The award amount of $11.1 million for DC-DC convertors is difficult to benchmark without specific technical details and unit costs. The lack of competition suggests potential overpricing compared to a competitive environment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source or limited competition award. This method can lead to higher prices as there is no market pressure to offer the best value.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding, potentially funding a higher profit margin for the contractor.

Public Impact

Essential components for naval aircraft operations. Potential for increased defense spending without competitive justification. Impact on the supply chain for specialized electronic parts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Sole-source award
Long contract duration

Positive Signals

Award to established contractor
Supports critical defense systems

Sector Analysis

This award falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, a critical component of the defense industrial base. Spending in this area is often driven by specific platform needs and long-term sustainment.

Small Business Impact

The awardee, Raytheon Company, is a large prime contractor. There is no indication that small businesses were involved in this specific delivery order, suggesting missed opportunities for SMB participation.

Oversight & Accountability

The 'NOT COMPETED' status warrants further review by oversight bodies to ensure the justification for sole-source procurement was valid and that fair and reasonable pricing was achieved.

Related Government Programs

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

Risk Flags

Lack of competitive bidding
Potential for inflated pricing
Limited transparency on justification
Missed small business opportunities

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.1 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 $11.1 million.

What is the period of performance?

Start: 2023-10-25. End: 2025-12-31.

What is the specific technical requirement driving the need for these DC-DC convertors, and why was competition deemed impractical?

The specific technical requirements for these DC-DC convertors are not detailed in the provided data. However, the 'NOT COMPETED' status suggests a potential justification such as unique technical specifications, urgent need, or lack of available sources. Further investigation would be required to ascertain the precise reasons and validate the necessity of a sole-source award.

How does the $11.1 million award compare to industry benchmarks for similar electronic components, especially given the lack of competition?

Without specific unit costs, technical specifications, and volume, a direct comparison to industry benchmarks is challenging. However, the absence of competition inherently raises concerns about price reasonableness. In a competitive scenario, similar components might be procured at a lower cost due to market pressures and multiple vendor bids.

What is the potential impact on future procurements if sole-source awards for standard components become common practice?

If sole-source awards for standard components become common, it could stifle innovation, reduce overall market efficiency, and lead to consistently higher prices for the government. This practice may discourage new entrants and limit the government's ability to leverage competitive advantages, ultimately increasing long-term spending.

Industry Classification

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

Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS

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: 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: $11,089,492

Exercised Options: $11,089,492

Current Obligation: $11,089,492

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $882,158

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: N0038319GUX01

IDV Type: BOA

Timeline