Raytheon Company awarded $15.6M contract for engineering and technical services by the Department of the Navy

Contract Overview

Contract Amount: $15,557,878 ($15.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2023-06-21

End Date: 2026-06-20

Contract Duration: 1,095 days

Daily Burn Rate: $14.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: ENGINEERING & TECHNICAL SERVICES NGJ-MB

Place of Performance

Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $15.6 million to RAYTHEON COMPANY for work described as: ENGINEERING & TECHNICAL SERVICES NGJ-MB Key points: 1. Contract value represents a significant investment in specialized engineering and technical support. 2. Sole-source award suggests limited market availability or specific contractor expertise required. 3. Cost-plus-fixed-fee structure may lead to cost overruns if not carefully managed. 4. Contract duration of three years indicates a need for sustained support. 5. Geographic focus on California highlights regional concentration of defense activities. 6. Absence of small business set-aside raises questions about broader economic impact.

Value Assessment

Rating: fair

The contract value of $15.6 million for engineering and technical services appears moderate for a sole-source award to a major defense contractor like Raytheon. Without comparable contract data for similar services or specific deliverables, it's difficult to definitively benchmark value. The cost-plus-fixed-fee (CPFF) pricing structure introduces inherent risk, as costs can fluctuate, and the fixed fee may not adequately incentivize cost efficiency. Further analysis would require understanding the specific technical requirements and the basis for the fixed fee.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating that the Department of the Navy identified Raytheon Company as the only responsible source capable of meeting the specific requirements. This typically occurs when there is a unique capability, proprietary technology, or urgent need that cannot be fulfilled through a competitive process. The lack of competition means that price discovery through market forces was bypassed, potentially leading to a higher price than might have been achieved in a competitive environment.

Taxpayer Impact: For taxpayers, a sole-source award means less assurance of obtaining the best possible price. The government relies on negotiation and oversight to ensure fair pricing, which can be more challenging without competitive pressure.

Public Impact

The Department of the Navy benefits from specialized engineering and technical expertise to support its operations. Services delivered likely include design, development, testing, and maintenance of complex systems. Geographic impact is concentrated in California, supporting regional defense industry employment. Workforce implications include employment for engineers, technicians, and support staff within Raytheon and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee structure can incentivize higher spending if not managed rigorously.
Sole-source award limits opportunities for other capable firms and potentially reduces competitive pricing.
Lack of small business participation may limit broader economic benefits and subcontracting opportunities.

Positive Signals

Award to a reputable contractor like Raytheon suggests a high likelihood of technical competence.
Definitive contract structure provides a clear framework for service delivery over a defined period.
Focus on engineering and technical services indicates support for critical defense capabilities.

Sector Analysis

This contract falls within the broader defense industry, specifically supporting the development and maintenance of advanced technological systems. The market for specialized engineering and technical services is highly competitive among large defense contractors, but often becomes concentrated for specific, niche capabilities. The $15.6 million award is a moderate-sized contract within this sector, reflecting a specific need rather than a large-scale program acquisition. Comparable spending benchmarks would depend heavily on the precise nature of the engineering services required.

Small Business Impact

This contract was not awarded as a small business set-aside, and the data indicates the prime contractor is Raytheon Company, a large business. This means that opportunities for small businesses would primarily come through subcontracting. The absence of a specific small business subcontracting plan requirement in the provided data raises concerns about the extent to which small businesses will be engaged. Further investigation into subcontracting goals and performance would be necessary to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy's contracting and program management offices. Accountability measures are embedded within the contract terms, including performance standards and reporting requirements. Transparency is facilitated through contract databases like FPDS, though detailed performance metrics are often not publicly disclosed. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Research and Development
Naval Systems Engineering Support
Defense Contractor Services
Advanced Technology Development

Risk Flags

Sole-source award limits competition and price discovery.
Cost-plus-fixed-fee structure carries inherent risk of cost overruns.
Lack of small business set-aside may limit broader economic participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.6 million to RAYTHEON COMPANY. ENGINEERING & TECHNICAL SERVICES NGJ-MB

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 $15.6 million.

What is the period of performance?

Start: 2023-06-21. End: 2026-06-20.

What specific engineering and technical services are being procured under this contract?

The provided data indicates the contract is for 'ENGINEERING & TECHNICAL SERVICES NGJ-MB' awarded to Raytheon Company. While the specific nature of 'NGJ-MB' is not detailed, it likely refers to a particular program or system within the Navy's portfolio, possibly related to Next Generation Jammer (NGJ) or a similar advanced electronic warfare or communications system. These services typically encompass a range of activities such as system design, integration, testing, analysis, maintenance, and lifecycle support. The contract type (Cost Plus Fixed Fee) suggests that the scope may involve some level of uncertainty or evolving requirements, where the contractor is reimbursed for allowable costs plus a fixed fee representing profit.

How does the $15.6 million contract value compare to similar sole-source awards for engineering services within the Department of the Navy?

Benchmarking the $15.6 million value requires access to a broader dataset of sole-source contracts for comparable engineering and technical services within the Department of the Navy. However, for a major defense contractor like Raytheon, this value is considered moderate. Sole-source awards are often justified by unique capabilities or urgent needs, which can sometimes command higher prices due to the lack of competition. Without specific details on the deliverables and the duration (3 years), a precise comparison is challenging. Generally, sole-source contracts warrant closer scrutiny to ensure fair and reasonable pricing compared to what might be achieved through competition.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract structure for these services?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is that the contractor has less incentive to control costs compared to fixed-price contracts. Since the government agrees to reimburse all allowable costs plus a predetermined fixed fee, the contractor may not be as motivated to find the most cost-effective solutions. This can lead to cost overruns if the initial cost estimates are inaccurate or if project requirements change significantly. For the government, the risk lies in potentially paying more than necessary. Effective oversight, detailed cost tracking, and robust negotiation are crucial to mitigate these risks.

What is the historical spending pattern for 'ENGINEERING & TECHNICAL SERVICES NGJ-MB' or similar services by the Department of the Navy?

The provided data only includes this single contract award. To understand historical spending patterns for 'ENGINEERING & TECHNICAL SERVICES NGJ-MB' or similar services, one would need to analyze historical contract awards from the Department of the Navy over several fiscal years. This would involve searching contract databases for keywords related to the service type and potentially the specific program (NGJ-MB), and examining the total obligated amounts, number of awards, and prime contractors involved. Without this historical context, it's difficult to determine if this $15.6 million award represents an increase, decrease, or stable level of spending for these types of services.

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

Raytheon Company is a major defense contractor with a long-standing relationship with the Department of the Navy, undertaking numerous contracts for a wide array of services and systems. Their track record typically includes experience in areas such as aerospace, defense electronics, and complex systems integration. For specific engineering and technical services, their performance history would be documented through past performance evaluations within government contracting systems. While this specific contract is sole-source, Raytheon's broader history suggests they possess the necessary technical capabilities and infrastructure to fulfill such requirements, though individual contract performance can vary.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Other Measuring and Controlling Device Manufacturing

Product/Service Code: MAINT/REPAIR SHOP EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6833522R0027

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

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: $15,557,878

Exercised Options: $15,557,878

Current Obligation: $15,557,878

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline