DoD Spends $11M on Raytheon Engineering Services via Full and Open Competition

Contract Overview

Contract Amount: $10,964,208 ($11.0M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2003-09-30

End Date: 2006-01-31

Contract Duration: 854 days

Daily Burn Rate: $12.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $11.0 million to RAYTHEON COMPANY for work described as: Key points: 1. Contract awarded to Raytheon Company for engineering services. 2. Significant spending of over $10.9 million by the Department of Defense. 3. Procurement method was Full and Open Competition after Exclusion of Sources. 4. Contract duration spanned over 854 days.

Value Assessment

Rating: fair

The contract value of $10.9 million for engineering services is substantial. Without specific benchmarks for similar engineering contracts, it's difficult to definitively assess pricing. However, the Cost Plus Fixed Fee structure suggests potential for cost overruns if not managed tightly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract utilized 'Full and Open Competition after Exclusion of Sources,' indicating a competitive process was intended. This method aims to ensure fair pricing by allowing multiple vendors to bid, though the 'exclusion of sources' clause warrants further investigation into its justification and impact on price discovery.

Taxpayer Impact: The competitive bidding process, despite the exclusion clause, aims to secure reasonable prices for taxpayers. The total value of $10.9 million represents a significant investment, and the effectiveness of the competition in controlling costs is key to taxpayer value.

Public Impact

Taxpayers funded over $10.9 million for specialized engineering services. The Department of Defense utilized a competitive procurement strategy. The contract supported Raytheon Company's engineering capabilities. The duration of the contract suggests a long-term need for these services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns with Cost Plus Fixed Fee structure.
Justification for 'Exclusion of Sources' in competition needs review.
Lack of specific performance metrics makes value assessment challenging.

Positive Signals

Utilized Full and Open Competition, promoting market fairness.
Awarded to a major defense contractor, suggesting capability.
Contract duration indicates sustained need for services.

Sector Analysis

Engineering services are critical for defense projects, supporting design, development, and testing. The $10.9 million spent falls within a moderate range for specialized defense engineering contracts, but benchmarks vary widely based on complexity and duration.

Small Business Impact

This contract was awarded to Raytheon Company, a large prime contractor. There is no indication that small businesses were directly involved as prime contractors or significant subcontractors in this specific award, suggesting limited direct impact on the small business sector for this procurement.

Oversight & Accountability

The contract was managed by the Defense Contract Management Agency (DCMA), responsible for oversight. The 'Cost Plus Fixed Fee' structure necessitates robust oversight to control costs and ensure contractor performance aligns with contract requirements and taxpayer interests.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Cost Plus Fixed Fee structure can lead to cost overruns.
Potential for limited competition due to 'Exclusion of Sources'.
Lack of specific performance metrics hinders value assessment.
Contract duration is substantial, requiring ongoing oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.0 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 $11.0 million.

What is the period of performance?

Start: 2003-09-30. End: 2006-01-31.

What was the specific justification for excluding certain sources in the 'Full and Open Competition' process, and did this exclusion limit competitive pricing?

The justification for excluding sources in a full and open competition is typically based on specific technical requirements, proprietary data, or unique capabilities that only certain vendors possess. Without access to the contract's documentation, it's impossible to determine the exact reasons. However, any exclusion, even with a competitive process, can potentially limit the breadth of bids received and may impact the final negotiated price, potentially leading to less favorable terms for the government.

How effectively did the Cost Plus Fixed Fee structure control costs for these engineering services, and what was the final profit margin for Raytheon?

Assessing the cost control effectiveness of a Cost Plus Fixed Fee (CPFF) contract requires detailed financial data and performance reports, which are not provided here. CPFF contracts aim to provide a fixed fee to the contractor regardless of actual costs, incentivizing efficiency. However, they can also lead to cost overruns if the base cost estimate is inaccurate or if scope creep occurs without proper management. The final profit margin is determined by the fixed fee negotiated against the final allowable costs.

What were the key performance indicators (KPIs) for this contract, and how did Raytheon's performance against these KPIs impact the overall value delivered?

The provided data does not include specific Key Performance Indicators (KPIs) for this engineering services contract. Effective performance measurement is crucial for CPFF contracts to ensure value for money. Without defined KPIs related to technical milestones, delivery schedules, or quality standards, it is challenging to objectively assess whether Raytheon delivered optimal value. The contract's success would hinge on the government's ability to monitor and enforce performance against any implicit or explicit performance expectations.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: BASIC RESEARCH

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Address: 1151 EAST HERMANS ROAD, TUCSON, AZ, 90

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline