Raytheon Company awarded $17.7M for engineering and technical services by the Department of the Navy

Contract Overview

Contract Amount: $17,746,822 ($17.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2019-01-09

End Date: 2023-02-25

Contract Duration: 1,508 days

Daily Burn Rate: $11.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ENGINEERING AND TECHNICAL SERVICES

Place of Performance

Location: SUDBURY, MIDDLESEX County, MASSACHUSETTS, 01776

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $17.7 million to RAYTHEON COMPANY for work described as: ENGINEERING AND TECHNICAL SERVICES Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Services provided under a Cost Plus Fixed Fee (CPFF) pricing structure. 3. Contract duration of approximately 1508 days, indicating a long-term need. 4. The contract falls under the Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing NAICS code. 5. No small business set-aside was utilized for this procurement. 6. The contract was awarded as a delivery order against an existing contract. 7. The value represents a significant investment in specialized engineering support.

Value Assessment

Rating: fair

The contract's value of $17.7 million over its duration suggests a substantial investment in specialized engineering and technical services. Without direct comparisons to similar sole-source contracts for equivalent services, a precise value-for-money assessment is challenging. The CPFF structure, while allowing flexibility, can sometimes lead to higher costs if not managed rigorously, as the contractor is reimbursed for allowable costs plus a fixed fee. Benchmarking against industry standards for similar engineering support would be necessary for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed and was awarded on a sole-source basis. This indicates that the Department of the Navy identified Raytheon Company as the only responsible source capable of providing the required engineering and technical services. The lack of competition means that the government did not benefit from a bidding process that could have potentially driven down prices or offered alternative solutions. The justification for a sole-source award would typically involve factors such as unique capabilities, proprietary technology, or urgent requirements.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible price through competitive bidding, potentially resulting in higher costs for taxpayers.

Public Impact

The Department of the Navy benefits from specialized engineering and technical expertise for its systems. Services likely support the development, maintenance, or enhancement of critical defense systems. The geographic impact is primarily tied to the contractor's operational locations and Navy facilities. Workforce implications include employment for engineers and technical specialists at Raytheon.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
CPFF contract type may incentivize cost increases if not closely monitored.
Lack of transparency inherent in sole-source procurements.

Positive Signals

Award to a known contractor with existing expertise in defense systems.
Long contract duration suggests a stable and ongoing requirement being met.
Delivery order against an existing contract may indicate streamlined procurement.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on engineering and technical services for navigation and guidance systems. The market for such specialized services is often characterized by high barriers to entry due to technical expertise, security clearances, and established relationships with government agencies. Spending in this area is critical for maintaining and advancing national defense capabilities. Comparable spending benchmarks would typically be found within the Department of Defense's overall budget for research, development, testing, and evaluation (RDT&E) and procurement of defense-related systems.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses indicated in the provided data. The absence of small business participation in this specific award means that opportunities for small businesses to contribute to this particular contract are limited. This could potentially impact the small business ecosystem if such specialized services are a significant area of focus for small defense contractors.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the Department of the Navy. The Cost Plus Fixed Fee structure necessitates robust oversight to ensure that costs are allowable, reasonable, and allocable, and that the fixed fee is earned. Transparency may be limited due to the sole-source nature of the award. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Department of Defense Engineering Services
Navy Research and Development Contracts
Navigation and Guidance System Development
Defense Contractor Services

Risk Flags

Sole-source award may limit cost savings.
CPFF contract type requires diligent cost oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.7 million to RAYTHEON COMPANY. ENGINEERING AND TECHNICAL SERVICES

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 $17.7 million.

What is the period of performance?

Start: 2019-01-09. End: 2023-02-25.

What is Raytheon Company's track record with the Department of the Navy for similar engineering services?

Raytheon Company, now part of RTX, has a long-standing and extensive history of providing a wide array of services and products to the Department of the Navy. This includes complex systems engineering, integration, software development, and sustainment for various naval platforms and weapon systems. Their track record typically involves large-scale, high-value contracts, often in areas requiring specialized technical expertise similar to what this contract addresses. Historical data would likely show numerous awards for engineering and technical support across different Navy commands and programs, indicating a deep familiarity with naval requirements and processes. While specific performance metrics for this particular contract are not detailed here, Raytheon's general performance with the Navy is often characterized by its ability to deliver on complex technological requirements, though like many large defense contractors, they may also have faced scrutiny on specific contract performance or pricing in the past.

How does the $17.7 million contract value compare to other sole-source engineering service contracts awarded by the Navy?

The $17.7 million contract value for engineering and technical services is a moderate-sized award within the context of the Department of the Navy's overall spending. Sole-source awards of this magnitude are not uncommon, particularly when specialized expertise or unique capabilities are required that only one contractor can provide. To benchmark effectively, one would need to compare this value against other sole-source contracts for similar types of engineering support (e.g., system design, software integration, technical analysis) awarded by the Navy over a comparable period. Larger sole-source contracts, often for major system development or sustainment, can easily reach hundreds of millions or even billions of dollars. Conversely, smaller sole-source awards might be in the low millions. Therefore, $17.7 million suggests a significant but not exceptionally large sole-source procurement for specialized engineering services.

What are the primary risks associated with a sole-source Cost Plus Fixed Fee (CPFF) contract for engineering services?

The primary risks associated with a sole-source CPFF contract for engineering services are twofold. Firstly, the sole-source nature eliminates competitive pressure, meaning the government may not achieve the lowest possible price and could potentially overpay for the services. The justification for sole-sourcing must be robust to ensure it's truly necessary. Secondly, the CPFF structure, while providing flexibility for evolving requirements, carries inherent risks. The contractor is reimbursed for all allowable costs plus a fixed fee. If cost controls are weak or if the scope of work expands without adequate adjustments to the fee, costs can escalate beyond initial projections. This structure can incentivize the contractor to incur more costs, as their fee is fixed regardless of the total cost incurred. Effective government oversight, detailed cost monitoring, and clear definition of allowable costs are crucial to mitigate these risks.

What is the expected program effectiveness or outcome based on this contract award?

Based on the contract data, the expected program effectiveness hinges on the successful delivery of specialized engineering and technical services by Raytheon Company to the Department of the Navy. These services are crucial for the development, maintenance, or enhancement of search, detection, navigation, guidance, aeronautical, and nautical systems. The effectiveness will be measured by the quality and timeliness of the engineering support provided, its contribution to the performance and reliability of the targeted systems, and ultimately, its impact on the Navy's operational capabilities. A long contract duration (1508 days) suggests a sustained need and an expectation of ongoing contribution to program objectives. The success of the program is directly tied to Raytheon's ability to meet the technical specifications and performance requirements outlined in the contract, ensuring the systems function as intended.

How has the Department of the Navy's spending on 'ENGINEERING AND TECHNICAL SERVICES' (NAICS 334511) trended historically?

Historical spending data for the Department of the Navy under NAICS code 334511 ('Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing') would reveal trends in investment for these specific types of systems and related services. While this specific contract is for 'ENGINEERING AND TECHNICAL SERVICES,' it falls under the broader manufacturing NAICS code, suggesting a close link between service provision and system development/production. Generally, spending in this category within the Navy is driven by modernization efforts, platform upgrades, and the development of new technologies to maintain a strategic advantage. Fluctuations in spending can be attributed to budget cycles, geopolitical priorities, and the lifecycle of major defense programs. Analyzing historical data would show whether spending has been increasing, decreasing, or remaining relatively stable, providing context for the significance of the $17.7 million award.

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: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

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: RTX Corp

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: $19,277,605

Exercised Options: $19,277,605

Current Obligation: $17,746,822

Actual Outlays: $1,331,768

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $34,960

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002417G5103

IDV Type: BOA

Timeline