Raytheon Company awarded $36.88M for MK-99 PBL POP 1, a sole-source contract for ship building and repair

Contract Overview

Contract Amount: $36,877,685 ($36.9M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2024-11-28

End Date: 2025-11-27

Contract Duration: 364 days

Daily Burn Rate: $101.3K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MK-99 PBL POP 1 (28 NOV 24 - 27 NOV 25)

Place of Performance

Location: MARLBOROUGH, MIDDLESEX County, MASSACHUSETTS, 01752

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $36.9 million to RAYTHEON COMPANY for work described as: MK-99 PBL POP 1 (28 NOV 24 - 27 NOV 25) Key points: 1. Contract awarded on a sole-source basis, limiting competitive pricing benefits. 2. Fixed-price contract type suggests cost certainty for the government. 3. Contract duration of one year with potential for follow-on orders. 4. Performance is for ship building and repair, a critical defense sector. 5. No small business set-aside noted, potentially impacting small business participation. 6. High value suggests a significant need for the specified goods or services.

Value Assessment

Rating: fair

This contract's value of $36.88 million for a one-year period for ship building and repair services appears to be within a reasonable range for specialized defense procurements. However, without direct comparable contracts for the specific MK-99 PBL POP 1 system or detailed cost breakdowns, a precise value-for-money assessment is challenging. The sole-source nature of the award means there's no direct competitive benchmark to evaluate pricing efficiency against market alternatives.

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. This typically occurs when only one responsible source can provide the required goods or services. The lack of competition means there were no other bidders, and the government did not benefit from a price discovery process driven by multiple offers. This approach can lead to higher prices compared to a fully competed contract.

Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of competitive bidding. The government's negotiating position is weakened without alternative offers.

Public Impact

The Department of the Navy is the primary beneficiary, receiving critical ship building and repair services. This contract supports the maintenance and readiness of naval assets. The contract is geographically focused on Massachusetts, where Raytheon Company is located. It likely supports a specialized workforce within the defense industrial base.

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 in the justification for sole-source award.
No indication of small business subcontracting goals, potentially limiting opportunities for smaller firms.

Positive Signals

Fixed-price contract type provides cost certainty for the government.
Award to a known contractor (Raytheon) may indicate a reliance on established capabilities.
Contract duration of one year allows for periodic review and potential adjustments.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on ship building and repair. This is a critical area for national security, often characterized by high barriers to entry, specialized technologies, and long-term government relationships. Spending in this sector is substantial, with significant investments made annually to maintain and modernize naval fleets. Comparable spending benchmarks would typically involve other major defense contractors involved in shipbuilding and maintenance.

Small Business Impact

This contract does not appear to have a small business set-aside. The sole-source nature of the award further suggests that opportunities for small businesses, either as prime contractors or through subcontracting, may be limited unless specifically included in Raytheon's subcontracting plan. Without explicit set-aside provisions or clear subcontracting goals, the direct impact on the small business ecosystem for this specific award is likely minimal.

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 structure, which shifts cost risk to the contractor. Transparency is limited due to the sole-source nature, with justifications for this award typically being internal to the agency. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Naval Ship Building Programs
Defense Maintenance and Repair Contracts
Weapon System Sustainment Contracts
Raytheon Company Contracts

Risk Flags

Sole-source award may indicate limited competition, potentially leading to higher costs.
Lack of transparency regarding the justification for sole-source procurement.
No explicit small business subcontracting goals mentioned.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.9 million to RAYTHEON COMPANY. MK-99 PBL POP 1 (28 NOV 24 - 27 NOV 25)

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 $36.9 million.

What is the period of performance?

Start: 2024-11-28. End: 2025-11-27.

What is the specific nature of the MK-99 PBL POP 1 system and its criticality to naval operations?

The MK-99 PBL POP 1 refers to a specific Product Baseline (PBL) contract for the MK-99 system, likely a component or system related to naval platforms. PBL contracts are performance-based logistics arrangements designed to improve readiness and reduce costs by focusing on outcomes rather than individual parts. The criticality of the MK-99 system would depend on its function within the naval platform; it could be a fire control system, a sensor, a weapon component, or a support system. Its sole-source award suggests it is either a proprietary system, a highly specialized technology, or one where Raytheon is the only qualified provider with the necessary technical data and expertise to maintain and support it effectively over its lifecycle. Further details on the specific system's function would be needed for a complete understanding of its operational importance.

What is the historical spending trend for the MK-99 system or similar systems by the Department of the Navy?

Historical spending data for the MK-99 system or similar Product Baseline (PBL) arrangements by the Department of the Navy is not directly available in the provided data. However, the award of $36.88 million for a one-year period (POP 1) suggests a significant ongoing investment. Naval ship building and repair, along with weapon system sustainment, represent multi-billion dollar annual expenditures for the DoD. Contracts for PBLs are often multi-year and can involve substantial sums, reflecting the long-term support required for complex defense systems. To ascertain historical trends, one would need to access historical contract databases (like FPDS or USASpending) and search for previous awards related to the MK-99 system or comparable PBL contracts for similar naval systems, analyzing award amounts, durations, and contractor performance over time.

What are the specific performance metrics and Key Performance Indicators (KPIs) associated with this contract?

The provided data does not specify the Key Performance Indicators (KPIs) or performance metrics for this MK-99 PBL POP 1 contract. However, as a Product Baseline (PBL) contract, it is inherently performance-based. Typical KPIs for such contracts in ship building and repair or weapon system sustainment often revolve around system availability, reliability, maintainability, response times for repairs, and cost-effectiveness. The objective of a PBL is to incentivize the contractor to achieve specific, measurable outcomes that enhance fleet readiness and reduce total ownership costs. The 'POP 1' designation suggests this is the first year of a potential multi-year PBL effort, and the specific metrics would have been negotiated and detailed in the contract's Performance Work Statement (PWS).

What is Raytheon Company's track record with the Department of the Navy, particularly in ship building and repair or PBL contracts?

Raytheon Company (now RTX) has a long and extensive track record as a major defense contractor for the Department of the Navy, involved in a wide array of systems and services. They are known for producing advanced defense technologies, including radar, missiles, command and control systems, and cybersecurity solutions, many of which are integrated into naval platforms. While 'ship building and repairing' might not be their primary direct output (compared to specialized shipyards), they are crucial providers of systems and sustainment services for naval vessels. Their experience with Product Baseline (PBL) contracts is also substantial, as PBLs are a common strategy for managing the lifecycle support of complex defense equipment. Given their size and scope, Raytheon's performance with the Navy is generally considered significant, though like any large contractor, specific contract performance can vary.

What is the justification for awarding this contract on a sole-source basis instead of full and open competition?

The justification for awarding this contract on a sole-source basis is not detailed in the provided data but is typically based on specific circumstances outlined in federal acquisition regulations (FAR). Common reasons include: 1) Only one responsible source possesses the unique capability, specialized technology, or proprietary data required. 2) The item is available only from a single source (e.g., sole manufacturer). 3) For follow-on work, where a system's unique nature or prior investment makes switching contractors impractical or excessively costly. In the context of the MK-99 PBL POP 1, it's probable that Raytheon possesses unique technical knowledge, intellectual property, or manufacturing capabilities essential for the system's sustainment, making competition infeasible or not in the government's best interest due to potential disruptions or increased costs associated with technology transfer or requalification.

Industry Classification

NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing

Product/Service Code: ELECTRIC WIRE, POWER DISTRIB EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0038324R004C

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 1001 BOSTON POST RD E, MARLBOROUGH, MA, 01752

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: $49,170,246

Exercised Options: $49,170,246

Current Obligation: $36,877,685

Subaward Activity

Number of Subawards: 36

Total Subaward Amount: $5,976,276

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0038325DNE01

IDV Type: IDC

Timeline