DoD's $58.8M Raytheon Contract for Aircraft Parts: Long Duration, Limited Competition Raises Concerns
Contract Overview
Contract Amount: $58,797,356 ($58.8M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2005-01-11
End Date: 2016-12-31
Contract Duration: 4,372 days
Daily Burn Rate: $13.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Place of Performance
Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245
Plain-Language Summary
Department of Defense obligated $58.8 million to RAYTHEON COMPANY for work described as: Key points: 1. Significant spending of $58.8 million over 11 years. 2. Sole-source award to Raytheon Company limits competitive pricing. 3. Long contract duration (4372 days) may indicate potential for cost overruns. 4. Sector: Defense spending on aircraft parts and auxiliary equipment.
Value Assessment
Rating: questionable
The contract's value of $58.8 million over nearly 12 years is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar aircraft parts contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Raytheon Company. This lack of competition likely resulted in higher prices and reduced opportunities for other suppliers to offer potentially more cost-effective solutions.
Taxpayer Impact: The absence of competition in this sole-source award means taxpayers may have paid a premium for these aircraft parts, as there was no market pressure to drive down costs.
Public Impact
Taxpayers funded a significant contract without competitive bidding. Long-term commitment to a single supplier for critical aircraft components. Potential for reduced innovation due to lack of market competition.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Long contract duration
- Lack of competition
- Cost-plus contract type
Positive Signals
- Established supplier (Raytheon Company)
- Specific need met
Sector Analysis
This contract falls within the Defense sector, specifically for 'Other Aircraft Parts and Auxiliary Equipment Manufacturing.' Spending in this area is critical for maintaining military aviation capabilities. Benchmarks for such specialized parts can vary widely based on complexity and technology.
Small Business Impact
The data indicates this was a sole-source award to Raytheon Company and does not mention any subcontracting to small businesses. This suggests limited opportunity for small businesses to participate in this specific contract.
Oversight & Accountability
The contract was awarded by the Department of Defense through the Defense Contract Management Agency. Oversight would focus on ensuring Raytheon meets the cost-plus fixed fee terms and delivers the required aircraft parts, though the lack of competition limits price oversight.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award limits competition and potentially inflates costs.
- Long contract duration increases risk of cost overruns and obsolescence.
- Cost-plus contract type can incentivize higher spending.
- Lack of transparency regarding justification for sole-source award.
- Potential for missed opportunities for small business participation.
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, ca, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $58.8 million to RAYTHEON COMPANY. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is RAYTHEON COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $58.8 million.
What is the period of performance?
Start: 2005-01-11. End: 2016-12-31.
What was the justification for awarding this contract on a sole-source basis, and were alternatives explored?
The justification for a sole-source award is not provided in the data. Typically, sole-source contracts are used when only one responsible source can provide the required supplies or services. However, without further documentation, it's unclear if alternatives were thoroughly explored or if specific circumstances necessitated this approach, potentially impacting value for money.
Given the 11-year duration and cost-plus contract type, what mechanisms were in place to control costs and ensure efficiency?
Cost-plus contracts, especially over long durations, carry inherent risks of cost escalation. The data does not specify cost control mechanisms. Effective oversight would require rigorous monitoring of Raytheon's incurred costs, performance metrics, and justification for expenditures to ensure taxpayer funds were used efficiently and effectively.
How does the unit cost of these aircraft parts compare to commercially available equivalents or contracts with competitive bidding?
Direct comparison is challenging without specific part numbers and detailed specifications. However, sole-source, cost-plus contracts over extended periods generally lead to higher unit costs than competitively procured items. A benchmark analysis against similar DoD contracts or commercial off-the-shelf (COTS) parts, if applicable, would be necessary to quantify the price difference.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment 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
Address: 2000 EAST EL SEGUNDO BLVD, EL SEGUNDO, CA, 90245
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2005-01-11
Current End Date: 2016-12-31
Potential End Date: 2016-12-31 00:00:00
Last Modified: 2017-08-03
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