NASA's $1.22B VIRS instrument contract to Raytheon Company awarded without competition
Contract Overview
Contract Amount: $1,223,917,226 ($1.2B)
Contractor: Raytheon Company
Awarding Agency: National Aeronautics and Space Administration
Start Date: 2010-09-22
End Date: 2029-03-01
Contract Duration: 6,735 days
Daily Burn Rate: $181.7K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: R&D
Official Description: ENGINEERING SERVICES AND DEVELOPMENT LEADING TO THE DELIVERY OF THE VISIBLE INFRARED IMAGER RADIOMETER (VIRS) INSTRUMENT AND SUPPORT.
Place of Performance
Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245
Plain-Language Summary
National Aeronautics and Space Administration obligated $1.22 billion to RAYTHEON COMPANY for work described as: ENGINEERING SERVICES AND DEVELOPMENT LEADING TO THE DELIVERY OF THE VISIBLE INFRARED IMAGER RADIOMETER (VIRS) INSTRUMENT AND SUPPORT. Key points: 1. Contract awarded on a cost-plus-award-fee basis, which can incentivize performance but also carries cost risk. 2. The contract spans over 16 years, indicating a long-term need for the VIRS instrument and support. 3. The sole-source nature of this award raises questions about potential cost efficiencies and market alternatives. 4. This contract supports a critical component for Earth observation, highlighting its importance to scientific research. 5. The significant duration and value suggest a substantial investment in space-based instrumentation.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is challenging due to its sole-source nature and the specialized nature of the VIRS instrument. Cost-plus-award-fee contracts can lead to higher costs compared to fixed-price contracts if not managed carefully. Without competitive bids, it's difficult to assess if Raytheon Company's pricing reflects fair market value for engineering services and development of this specific instrument. The long duration of the contract also introduces potential for cost overruns if not closely monitored.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning there was no open competition. This typically occurs when a specific contractor possesses unique capabilities, proprietary technology, or when the urgency of the requirement precludes a competitive process. The lack of competition limits the government's ability to leverage market forces to drive down costs and ensure the best possible value.
Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of competitive bidding. The government's negotiating position is weakened without alternative offers.
Public Impact
The Visible Infrared Imaging Radiometer (VIRS) instrument, developed and supported under this contract, is crucial for Earth observation and climate research. This contract supports NASA's scientific mission, contributing to a better understanding of Earth's climate systems and environmental changes. The contract's duration and scope imply continued employment for specialized engineers and technicians within the aerospace sector. The successful delivery of the VIRS instrument will enhance NASA's capabilities in remote sensing and data collection from space.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price discovery and potential cost savings for taxpayers.
- Cost-plus-award-fee structure can lead to higher final costs if not rigorously managed.
- Long contract duration (over 16 years) increases the risk of cost escalation and scope creep.
- Lack of transparency in the procurement process due to sole-source award.
Positive Signals
- Supports a critical scientific instrument for Earth observation, aligning with NASA's core mission.
- Raytheon Company is a known entity in aerospace and defense, suggesting established technical expertise.
- The award fee component incentivizes contractor performance, potentially leading to high-quality delivery.
- Long-term nature of the contract provides stability for a critical program element.
Sector Analysis
The aerospace and defense sector is characterized by high R&D costs, complex technological requirements, and significant government procurement. Contracts for space-based instruments like VIRS are highly specialized and often involve a limited number of capable contractors. NASA's spending in this area is critical for its scientific and exploration missions. Comparable spending benchmarks are difficult to establish due to the unique nature of each instrument and mission, but large-scale instrument development contracts can easily reach hundreds of millions to billions of dollars.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Given the sole-source nature and the specialized technical requirements for developing and supporting a sophisticated instrument like VIRS, it is unlikely that subcontracting opportunities for small businesses would be mandated or extensively utilized, unless specifically required by the prime contractor for non-core functions.
Oversight & Accountability
Oversight for this contract would primarily fall under NASA's contracting officer and program management. The cost-plus-award-fee structure necessitates close monitoring of costs and performance against defined award criteria. Transparency is limited by the sole-source nature of the award. NASA's Office of Inspector General (OIG) would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.
Related Government Programs
- NASA Earth Science Division Programs
- Satellite Instrument Development Contracts
- Space-Based Observation Systems
- Raytheon Company Defense Contracts
Risk Flags
- Sole-source award
- Cost-plus-award-fee contract type
- Long contract duration
Tags
nasa, space-instrumentation, earth-observation, sole-source, cost-plus-award-fee, raytheon-company, california, r&d, definitive-contract, large-contract
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $1.22 billion to RAYTHEON COMPANY. ENGINEERING SERVICES AND DEVELOPMENT LEADING TO THE DELIVERY OF THE VISIBLE INFRARED IMAGER RADIOMETER (VIRS) INSTRUMENT AND SUPPORT.
Who is the contractor on this award?
The obligated recipient is RAYTHEON COMPANY.
Which agency awarded this contract?
Awarding agency: National Aeronautics and Space Administration (National Aeronautics and Space Administration).
What is the total obligated amount?
The obligated amount is $1.22 billion.
What is the period of performance?
Start: 2010-09-22. End: 2029-03-01.
What is the historical performance of Raytheon Company on similar NASA contracts?
Raytheon Company, now RTX, has a long history of working with NASA on various space and science missions. While specific performance data for all past contracts is not readily available in this summary, the company is a major defense and aerospace contractor with extensive experience in developing complex systems, including sensors and instruments for space applications. NASA's contracting data often includes performance ratings (e.g., CPARS - Contractor Performance Assessment Reporting System) which would provide a more detailed view of their past performance on specific projects. Generally, large contractors like Raytheon are expected to meet stringent technical and schedule requirements for NASA programs, though challenges and cost overruns can occur on complex, long-term projects.
How does the cost-plus-award-fee structure compare to other contract types for instrument development?
Cost-plus-award-fee (CPAF) contracts are used when the government needs flexibility and wants to incentivize contractor performance beyond basic requirements. Unlike fixed-price contracts, CPAF reimburses the contractor for allowable costs plus a fee that is composed of a fixed base amount and an award amount based on meeting or exceeding performance objectives. This structure is often employed for complex R&D or system development where the final scope or cost is uncertain. However, CPAF can lead to higher overall costs than fixed-price contracts if performance targets are not well-defined or if costs are not rigorously controlled, as the contractor is incentivized to incur costs to achieve award fees. It requires significant oversight from the government to manage costs and ensure value.
What are the primary risks associated with a sole-source award for a long-duration contract?
The primary risks associated with a sole-source award for a long-duration contract include a lack of competitive pressure, which can lead to inflated prices and reduced innovation. Without competing bids, the government has less leverage to negotiate favorable terms and pricing. For long-duration contracts, there's also an increased risk of cost overruns due to unforeseen technical challenges, changes in requirements, or market fluctuations over the extended period. Furthermore, a sole-source award can create vendor lock-in, making it difficult and costly to switch providers if performance issues arise or if better alternatives become available later. This necessitates robust contract management and oversight to mitigate these risks.
What is the significance of the VIRS instrument for NASA's scientific objectives?
The Visible Infrared Imaging Radiometer (VIRS) instrument is significant because it provides crucial data for monitoring Earth's climate and environment. VIRS instruments typically measure radiation in the visible and infrared spectrums, enabling scientists to study cloud properties, sea surface temperatures, land surface characteristics, and atmospheric aerosols. This data is vital for improving weather forecasting, understanding climate change, monitoring natural disasters, and managing natural resources. NASA's Earth Science Division relies heavily on such instruments to fulfill its mission of studying the Earth as a complex, interconnected system and to provide critical information for policy decisions and societal benefit.
What is the total historical spending by NASA on VIRS-related instruments or programs?
Determining the total historical spending by NASA specifically on VIRS-related instruments or programs requires a comprehensive search of NASA's procurement databases and historical budget allocations. This single contract represents $1.22 billion over its lifespan. However, VIRS instruments have been part of various NASA missions over the years, often as part of larger satellite platforms (e.g., TRMM - Tropical Rainfall Measuring Mission). Each iteration or related program would have its own development and operational costs. Without access to NASA's detailed historical financial records for all VIRS-related projects, providing an exact total historical spending figure is not feasible based solely on the provided data.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: SPACE VEHICLES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
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: $1,255,986,444
Exercised Options: $1,255,986,444
Current Obligation: $1,223,917,226
Actual Outlays: $316,026,300
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2010-09-22
Current End Date: 2029-03-01
Potential End Date: 2029-03-01 00:00:00
Last Modified: 2026-03-30
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