DoD awards $16M+ to Raytheon for F/A-18/EA-18G sensor systems support, a sole-source contract
Contract Overview
Contract Amount: $16,070,828 ($16.1M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2019-09-26
End Date: 2023-10-31
Contract Duration: 1,496 days
Daily Burn Rate: $10.7K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: F/A-18/EA-18G SENSOR SYSTEMS SUPPORT
Place of Performance
Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245
Plain-Language Summary
Department of Defense obligated $16.1 million to RAYTHEON COMPANY for work described as: F/A-18/EA-18G SENSOR SYSTEMS SUPPORT Key points: 1. Significant contract value for specialized sensor systems. 2. Sole-source award to Raytheon Company raises competition concerns. 3. Risk of limited innovation and potentially higher costs due to lack of competition. 4. IT/Engineering services sector with a focus on defense aviation.
Value Assessment
Rating: questionable
The contract is Cost Plus Fixed Fee, which can lead to cost overruns if not managed tightly. Benchmarking against similar sole-source contracts for specialized defense systems is difficult but the lack of competition suggests potential for above-market pricing.
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 limits price discovery and potentially allows the contractor to set terms with less market pressure, impacting overall value for taxpayers.
Taxpayer Impact: The lack of competition for this critical defense system support may result in higher costs for taxpayers compared to a competitively bid contract.
Public Impact
Ensures continued operational readiness for critical F/A-18/EA-18G aircraft. Supports advanced sensor technology vital for naval aviation. Potential for taxpayer funds to be used less efficiently due to sole-source nature.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Lack of small business participation
Positive Signals
- Ensures critical system support
- Long-term contract duration
Sector Analysis
This contract falls within the Engineering Services sector, specifically supporting advanced sensor systems for naval aircraft. Defense sector spending on specialized engineering services is substantial, often involving complex, high-value contracts.
Small Business Impact
The data indicates no small business participation in this contract. This is common for highly specialized defense contracts awarded to large prime contractors, but it represents a missed opportunity for small business growth and innovation.
Oversight & Accountability
The sole-source nature of this award warrants close oversight by the Department of the Navy to ensure fair pricing and effective performance. Robust auditing of costs under the Cost Plus Fixed Fee structure is essential.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition and price discovery.
- Cost Plus Fixed Fee contract type carries inherent risk of cost overruns.
- Lack of small business participation.
- Potential for vendor lock-in due to specialized nature of systems.
Tags
engineering-services, department-of-defense, ca, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $16.1 million to RAYTHEON COMPANY. F/A-18/EA-18G SENSOR SYSTEMS SUPPORT
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 $16.1 million.
What is the period of performance?
Start: 2019-09-26. End: 2023-10-31.
What is the justification for the sole-source award of this critical sensor systems support contract?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent requirements where only one contractor can meet the need. For the F/A-18/EA-18G, Raytheon likely possesses specific expertise or intellectual property related to these advanced sensor systems, making competition impractical or impossible without significant delays and costs.
How does the Cost Plus Fixed Fee structure impact the risk of cost overruns for this contract?
Cost Plus Fixed Fee (CPFF) contracts share cost risk between the government and the contractor. While the contractor's profit is fixed, they are reimbursed for allowable costs. This can incentivize cost control, but if the government's oversight is insufficient or the initial cost estimates are inaccurate, there's a risk of cost overruns as the contractor may not bear the full brunt of unexpected expenses.
What is the long-term effectiveness of relying on a sole-source provider for critical defense system maintenance?
Sole-source reliance can ensure consistent support and deep institutional knowledge, contributing to long-term effectiveness. However, it can also stifle innovation, reduce competitive pressure on pricing and performance, and create dependency. The government must actively manage the relationship, seek opportunities for knowledge transfer, and periodically re-evaluate the necessity of the sole-source designation.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N6893618R0044
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Rockwell Collins Australia PTY Limited
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: $16,084,534
Exercised Options: $16,084,534
Current Obligation: $16,070,828
Subaward Activity
Number of Subawards: 10
Total Subaward Amount: $2,785,570
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: N6893619D0001
IDV Type: IDC
Timeline
Start Date: 2019-09-26
Current End Date: 2023-10-31
Potential End Date: 2023-10-31 00:00:00
Last Modified: 2025-09-24
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