DoD Awards $90.8M to Raytheon for MV/CMV/CV-22 Common Software, Sole-Source

Contract Overview

Contract Amount: $90,826,698 ($90.8M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2019-08-23

End Date: 2024-05-31

Contract Duration: 1,743 days

Daily Burn Rate: $52.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: MV-22, CMV-22, AND CV-22 COMMON SOFTWARE

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46219

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $90.8 million to RAYTHEON COMPANY for work described as: MV-22, CMV-22, AND CV-22 COMMON SOFTWARE Key points: 1. Significant contract value for specialized aircraft software. 2. Raytheon is the sole awardee, indicating limited competition. 3. Potential risk associated with single-source procurement. 4. Spending falls within the IT and Defense sectors.

Value Assessment

Rating: fair

The contract value of $90.8M over five years appears reasonable for specialized software development and sustainment. However, without competitive bids, it's difficult to definitively assess if this represents the best value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, likely due to the specialized nature of the software and Raytheon's existing role. The lack of competition limits price discovery and potentially increases costs for the government.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding, as the government did not explore alternative solutions or pricing.

Public Impact

Ensures continued operational capability for critical V-22 Osprey variants. Supports advanced navigation and control systems for military aircraft. Impacts readiness and effectiveness of special operations and logistics missions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Cost-plus contract type

Positive Signals

Supports critical defense systems
Long-term sustainment planned

Sector Analysis

This contract falls under the IT and Defense sectors, specifically for software supporting advanced aeronautical systems. Spending benchmarks for similar specialized defense software contracts can vary widely, but sole-source awards often trend higher.

Small Business Impact

There is no indication that small businesses were involved in this sole-source award. The contract was awarded directly to Raytheon Company, suggesting no subcontracting opportunities for small businesses were mandated or identified.

Oversight & Accountability

The Department of the Navy awarded this contract. Oversight will be crucial to ensure Raytheon meets all performance requirements and to justify the sole-source nature of the procurement in future actions.

Related Government Programs

Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Sole-source procurement
Lack of competitive bidding
Cost-plus contract type risk
Potential for higher costs
Limited innovation opportunities

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $90.8 million to RAYTHEON COMPANY. MV-22, CMV-22, AND CV-22 COMMON SOFTWARE

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 $90.8 million.

What is the period of performance?

Start: 2019-08-23. End: 2024-05-31.

What is the justification for the sole-source award, and were any market research efforts conducted to identify potential competitors?

The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the need for seamless integration with existing systems. For this contract, the specialized nature of common software for the MV-22, CMV-22, and CV-22 variants likely led the Department of the Navy to Raytheon. Market research should have been conducted to confirm no other sources could meet the requirement, or that only one source was capable of fulfilling it.

How does the cost-plus fixed fee (CPFF) contract type impact cost control and potential overruns for this software development?

A Cost-Plus Fixed Fee (CPFF) contract type means the contractor (Raytheon) is reimbursed for allowable costs plus a fixed fee representing profit. While the fee is fixed, the government bears the risk of cost overruns. This can incentivize contractors to incur higher costs if not closely monitored, potentially leading to a less cost-effective outcome for the taxpayer compared to fixed-price contracts.

What are the long-term implications for the V-22 program's software sustainment and modernization given this sole-source award?

A sole-source award for common software raises concerns about long-term sustainment and modernization. Without competition, the government may face escalating costs for updates, maintenance, and future upgrades. It could also limit the adoption of innovative solutions from other vendors, potentially hindering the program's ability to adapt to evolving technological landscapes and operational needs.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

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: $97,461,781

Exercised Options: $97,461,781

Current Obligation: $90,826,698

Actual Outlays: $8,294,778

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $485,614

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001915G0003

IDV Type: BOA

Timeline