DoD's $38.8M Raytheon Contract for Electrical Signal Instruments: Limited Competition Raises Concerns

Contract Overview

Contract Amount: $38,854,012 ($38.9M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2013-09-30

End Date: 2016-08-31

Contract Duration: 1,066 days

Daily Burn Rate: $36.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ORGANIC DEPOT ACTIVIATION

Place of Performance

Location: JACKSONVILLE, DUVAL County, FLORIDA, 32212

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $38.9 million to RAYTHEON COMPANY for work described as: ORGANIC DEPOT ACTIVIATION Key points: 1. Contract awarded to Raytheon Company for specialized electrical signal instruments. 2. Significant spending of $38.8 million over nearly three years. 3. Limited competition raises questions about price discovery and value. 4. Sector context: Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals.

Value Assessment

Rating: questionable

The contract's value is substantial at $38.8 million. Without competitive bidding, it's difficult to assess if this price is optimal compared to similar instruments from other manufacturers.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not competed, indicating a sole-source or limited source award. This lack of competition likely resulted in higher prices than if multiple vendors had bid.

Taxpayer Impact: Taxpayers may have overpaid due to the absence of competitive pressure to lower costs.

Public Impact

Specialized instruments for electrical signal measurement are crucial for defense operations. The lack of competition could impact the availability and cost of future defense procurements in this niche. Transparency in sole-source contracts is vital for public trust and accountability.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for overpayment
Limited transparency

Positive Signals

Essential defense equipment procured
Long-term contract duration

Sector Analysis

This contract falls within the Instrument Manufacturing sector, specifically for measuring and testing electrical signals. Benchmarks for this niche are hard to establish without competitive data, but large sole-source awards warrant scrutiny.

Small Business Impact

There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. The award went to a large corporation, Raytheon.

Oversight & Accountability

The 'NOT COMPETED' status suggests a potential lack of robust oversight in exploring competitive options. Further review is needed to ensure the government received the best value.

Related Government Programs

Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competition
Potential for inflated pricing
Limited transparency in procurement process
No small business participation identified
Unclear justification for sole-source award

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.9 million to RAYTHEON COMPANY. ORGANIC DEPOT ACTIVIATION

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 $38.9 million.

What is the period of performance?

Start: 2013-09-30. End: 2016-08-31.

What specific factors justified the 'NOT COMPETED' status for this contract, and were alternative solutions explored?

The justification for not competing this contract is not provided in the data. Typically, 'not competed' implies a sole-source justification, such as unique capabilities, urgent need, or lack of market availability. Without further documentation, it's impossible to verify if alternatives were explored or if the justification was sound, raising concerns about potential missed opportunities for better pricing and innovation.

How does the $38.8 million price compare to industry benchmarks for similar electrical signal testing instruments, considering the lack of competition?

Direct comparison to industry benchmarks is challenging due to the 'NOT COMPETED' status. Without competitive bids, the $38.8 million price lacks a market-validated reference point. It's plausible that the price is higher than it would be under a competitive scenario. A thorough cost analysis or benchmarking against similar, albeit potentially less specialized, instruments would be necessary to assess value.

What is the long-term strategic impact of awarding such a significant contract without competition on the Department of Defense's capabilities and budget?

Awarding significant contracts without competition can reduce pressure on contractors to innovate and offer competitive pricing, potentially leading to higher long-term costs for the DoD. It may also limit the agency's access to a broader range of technological solutions and foster reliance on a single provider. This can impact strategic flexibility and budget efficiency over time, especially if the procured technology becomes critical.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6883613R0030

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2501 W UNIVERSITY DR, MCKINNEY, TX, 75071

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: $38,854,012

Exercised Options: $38,854,012

Current Obligation: $38,854,012

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline