Raytheon awarded $31.5M for APY-10 radar on P-8A aircraft, a sole-source contract

Contract Overview

Contract Amount: $31,510,514 ($31.5M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2017-09-27

End Date: 2019-09-30

Contract Duration: 733 days

Daily Burn Rate: $43.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AWARD FOR THE APY-10 RADAR ON THE P-8A AIRCRAFT

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75071

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $31.5 million to RAYTHEON COMPANY for work described as: AWARD FOR THE APY-10 RADAR ON THE P-8A AIRCRAFT Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. The contract value represents a significant investment in advanced radar technology for maritime patrol. 3. Performance period of 2 years suggests a focused scope for this award. 4. The award is for aircraft parts, indicating a role in the broader aerospace supply chain. 5. Fixed-price contract type aims to control costs for the government. 6. Awarded by the Department of the Navy, highlighting defense procurement priorities.

Value Assessment

Rating: fair

Benchmarking the value of this specific radar system is challenging without detailed technical specifications and market comparisons. However, the $31.5 million award for a two-year period for specialized aircraft parts suggests a substantial investment. The firm fixed-price nature of the contract provides some cost certainty, but the lack of competition means there's less opportunity for aggressive price negotiation that could drive down costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Raytheon Company, was solicited. This approach bypasses the competitive bidding process, which typically involves multiple companies vying for the contract. While sole-source awards can be justified for unique capabilities or urgent needs, they inherently limit price discovery and can potentially lead to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings that can arise from competitive bidding, potentially leading to a higher overall expenditure for this radar system.

Public Impact

The P-8A Poseidon aircraft, equipped with the APY-10 radar, is crucial for maritime patrol, anti-submarine warfare, and intelligence, surveillance, and reconnaissance missions. This contract directly supports the operational readiness and technological advancement of the U.S. Navy's P-8A fleet. The award contributes to the defense industrial base, particularly in advanced radar manufacturing. Personnel operating and maintaining the P-8A aircraft will benefit from the enhanced capabilities provided by the APY-10 radar.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher prices than a competed award.
Sole-source nature raises questions about the necessity and justification for not seeking competitive bids.
Dependence on a single contractor for critical radar components could pose supply chain risks.

Positive Signals

Firm fixed-price contract type provides cost certainty for the government.
Award to an established contractor like Raytheon suggests a focus on proven technology and reliability.
The contract supports a critical defense platform (P-8A) vital for national security.

Sector Analysis

The aerospace and defense sector is characterized by high R&D investment, complex supply chains, and significant government procurement. Radar systems, like the APY-10, are critical components for various military platforms, enabling surveillance, targeting, and navigation. The market for advanced defense electronics is often dominated by a few large, specialized contractors due to the technical expertise and capital required. Spending in this area is driven by evolving threats and the need for technological superiority.

Small Business Impact

This contract was awarded to Raytheon Company and does not appear to have a specific small business set-aside. While the prime contractor may utilize small businesses for subcontracting, the direct award mechanism does not prioritize small business participation. Further analysis would be needed to determine the extent of small business involvement in the supply chain for this specific radar system.

Oversight & Accountability

The Department of the Navy, as the awarding agency, is responsible for the oversight of this contract. The firm fixed-price nature of the award provides a degree of cost control. Transparency regarding the justification for the sole-source award would be beneficial for public accountability. Inspector General reviews could be initiated if specific concerns regarding performance or pricing arise.

Related Government Programs

P-8A Poseidon Aircraft Program
Maritime Patrol Aircraft Systems
Advanced Radar Systems Procurement
Department of Defense Aircraft Components

Risk Flags

Sole-source award limits competition and potential cost savings.
Lack of transparency regarding justification for sole-source procurement.
Potential for higher costs due to absence of competitive bidding.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.5 million to RAYTHEON COMPANY. AWARD FOR THE APY-10 RADAR ON THE P-8A AIRCRAFT

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 $31.5 million.

What is the period of performance?

Start: 2017-09-27. End: 2019-09-30.

What is the specific technical capability of the APY-10 radar and how does it compare to previous generations or alternative systems?

The APY-10 radar is a multi-role surveillance radar system designed for the P-8A Poseidon maritime patrol aircraft. It integrates advanced capabilities for maritime surveillance, including inverse synthetic aperture radar (ISAR) for target identification, a weather radar mode, and a ground moving target indicator (GMTI) mode. It is designed to provide enhanced situational awareness in various operational environments, including over-water and over-land scenarios. Compared to older radar systems, the APY-10 offers improved resolution, longer detection ranges, and greater flexibility in mission profiles. While specific performance metrics are often classified, its integration into the P-8A signifies a leap in sensor technology for maritime patrol and reconnaissance missions, enabling more effective tracking of vessels, submarines (via periscopes or wakes), and other targets of interest.

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

Sole-source awards are typically justified when only one responsible source is available or capable of meeting the agency's needs. For advanced defense systems like specialized radar components, this can occur if the technology is proprietary, requires unique manufacturing expertise held by a single entity, or if there's an urgent and compelling need that cannot be met through a lengthy competitive process. In the case of the APY-10 radar for the P-8A, Raytheon (or its predecessor/component) likely developed this specific system, making them the sole entity with the necessary technical data, tooling, and expertise to produce or maintain it. The Department of the Navy would have had to formally document and approve this justification, often requiring review by higher authorities to ensure competition was not feasible or practical.

How does the $31.5 million award compare to historical spending on similar radar systems or for the P-8A program overall?

Comparing the $31.5 million award for the APY-10 radar requires context within the broader P-8A program and defense radar procurement. The P-8A Poseidon is a multi-billion dollar program, and individual component awards can vary significantly based on quantity, scope, and contract type. This $31.5 million award, covering a two-year period, appears to be for a specific batch of radars or related support services. Without knowing the exact number of units or the specific services included, a direct cost-per-unit comparison is difficult. However, advanced military radar systems are inherently expensive due to their complexity, R&D costs, and specialized manufacturing. Historical spending data for similar advanced maritime surveillance radars would likely show figures in the tens of millions of dollars for significant procurements or development phases, making this award fall within a plausible range for such critical defense technology.

What are the potential risks associated with a sole-source award for critical defense components like the APY-10 radar?

The primary risk associated with a sole-source award for critical defense components is the potential for inflated costs due to the absence of competitive pressure. Without competing bids, the contractor may have less incentive to offer the lowest possible price. Another significant risk is technological stagnation; if only one supplier is involved, there may be less drive for innovation or improvement compared to a market with multiple players. Furthermore, sole-source awards can create dependency on a single supplier, making the supply chain vulnerable to disruptions if that supplier faces financial difficulties, production issues, or geopolitical challenges. This dependency can also limit the government's flexibility in seeking alternative solutions or upgrades in the future.

What is Raytheon Company's track record in supplying radar systems to the Department of Defense, particularly for naval aviation?

Raytheon Company (now RTX) has a long and extensive track record of supplying advanced radar systems and other defense electronics to the Department of Defense, including the U.S. Navy. They are a major player in radar technology, known for developing and producing a wide array of systems for various platforms, including fighter jets, bombers, surveillance aircraft, and ships. For naval aviation, Raytheon has been a key supplier for numerous programs. Their involvement with the APY-10 radar for the P-8A Poseidon is a testament to their established capabilities in this domain. The company has consistently been awarded large contracts for radar development, production, and sustainment, indicating a strong performance history and a deep understanding of military requirements and operational environments.

Industry Classification

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

Product/Service Code: MAINT/REPAIR SHOP EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6833516R0057

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 2501 W UNIVERSITY DR, MCKINNEY, TX, 75070

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: $32,308,327

Exercised Options: $31,510,514

Current Obligation: $31,510,514

Actual Outlays: $1,118,018

Subaward Activity

Number of Subawards: 13

Total Subaward Amount: $989,672

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline