Raytheon Company awarded $115.6M for aircraft parts, with 5 prior orders and a 13-year duration

Contract Overview

Contract Amount: $115,611,781 ($115.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2010-05-25

End Date: 2023-12-31

Contract Duration: 4,968 days

Daily Burn Rate: $23.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: OTHER AIRCRAFT PART AND AUXILIARY EQUIPMENT MANUFACTURING

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46219

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $115.6 million to RAYTHEON COMPANY for work described as: OTHER AIRCRAFT PART AND AUXILIARY EQUIPMENT MANUFACTURING Key points: 1. The contract's long duration suggests a sustained need for these aircraft parts. 2. The award to a single large contractor may limit competitive pricing pressures. 3. The Cost Plus Fixed Fee (CPFF) contract type can incentivize cost overruns. 4. Performance context is limited without specific delivery and quality metrics. 5. This contract falls within the broader Defense sector's aircraft manufacturing sub-sector.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the parts procured and their market rates. The total award of $115.6 million over 13 years averages to approximately $8.9 million annually, which appears moderate for a sustained defense supply contract. However, the CPFF contract type carries inherent risks of cost escalation, making a definitive value-for-money assessment difficult without detailed cost breakdowns and performance data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. However, the data only specifies 5 prior delivery orders, and the total number of bids received is not provided. A high level of competition typically drives down prices, but the long duration and specialized nature of aircraft parts might limit the number of capable bidders.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best possible pricing through market forces. However, the ultimate benefit depends on the actual number of bids and the effectiveness of the negotiation process.

Public Impact

The Department of Defense benefits from a sustained supply of critical aircraft parts. The contract supports the operational readiness of military aircraft. The geographic impact is primarily centered in Indiana, where the contractor is located. The contract likely supports a workforce involved in the manufacturing and supply chain of aircraft components.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to higher costs if not managed diligently.
The extended duration of the contract (13 years) may reduce flexibility to adapt to changing technological needs or market prices.
Lack of specific performance metrics makes it difficult to assess the contractor's efficiency and effectiveness.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process.
The contractor, Raytheon Company, is a well-established entity in the defense industry.
The contract ensures a consistent supply of essential aircraft parts, supporting military readiness.

Sector Analysis

This contract falls within the "OTHER AIRCRAFT PART AND AUXILIARY EQUIPMENT MANUFACTURING" industry, a segment of the broader aerospace and defense sector. This sector is characterized by high technological demands, stringent quality requirements, and significant government procurement. Comparable spending benchmarks would involve analyzing other contracts for similar aircraft components awarded by the Department of Defense or other defense agencies.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). While the prime contractor is Raytheon Company, a large entity, there may be subcontracting opportunities for small businesses within its supply chain. The extent of small business subcontracting is not detailed here, but it is a common practice in large defense contracts to meet federal goals.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Defense, likely through the Defense Contract Management Agency (DCMA), which is listed as the servicing agency. Accountability measures would be embedded in the contract terms, including delivery schedules, quality standards, and financial reporting. Transparency is generally maintained through contract award databases, though detailed cost breakdowns may be proprietary.

Related Government Programs

Aircraft Parts Manufacturing
Defense Procurement
Aerospace Components
Military Aircraft Support
Raytheon Company Contracts

Risk Flags

Cost Plus Fixed Fee contract type can lead to cost overruns.
Long contract duration may limit flexibility and price competitiveness over time.
Lack of specific performance metrics hinders detailed value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $115.6 million to RAYTHEON COMPANY. OTHER AIRCRAFT PART AND AUXILIARY EQUIPMENT MANUFACTURING

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 $115.6 million.

What is the period of performance?

Start: 2010-05-25. End: 2023-12-31.

What is the historical spending trend for this specific contract or similar aircraft parts procured by the DoD?

Historical spending data for this specific contract shows a total award of $115,611,781 over its 13-year duration, from May 25, 2010, to December 31, 2023. This includes 5 prior delivery orders, indicating a phased approach to procurement. Analyzing broader historical spending trends for similar aircraft parts would require access to a more extensive database of defense contracts, allowing for comparisons of annual spending, average contract values, and the number of awards within the 'OTHER AIRCRAFT PART AND AUXILIARY EQUIPMENT MANUFACTURING' NAICS code (336411) over various fiscal years. This would help determine if the $115.6 million represents a typical or outlier investment for such components.

How does the pricing structure (Cost Plus Fixed Fee) compare to other contracts for similar aircraft parts?

The Cost Plus Fixed Fee (CPFF) pricing structure used for this contract is common in defense procurement, particularly for research, development, or complex manufacturing where costs can be uncertain. However, CPFF contracts carry a risk of cost overruns, as the contractor is reimbursed for all allowable costs plus a fixed fee. Compared to fixed-price contracts, CPFF can be less cost-effective for the government if not managed rigorously. Benchmarking against similar aircraft parts contracts would involve examining the fee percentages and the final cost compared to initial estimates. Contracts with more defined scopes might utilize fixed-price incentive fee or firm-fixed-price structures, which offer greater cost certainty for the government.

What are the specific types of aircraft parts being procured under this contract?

The provided data identifies the contract's purpose as "OTHER AIRCRAFT PART AND AUXILIARY EQUIPMENT MANUFACTURING" under NAICS code 336411. However, it does not specify the exact types of aircraft parts or auxiliary equipment being procured. These could range from engine components, structural elements, avionics parts, to specialized systems. A detailed understanding of the specific parts is crucial for assessing their criticality, market availability, and the appropriateness of the contract's value and pricing structure. Without this specificity, the analysis remains at a high level, focusing on the general category of aircraft manufacturing components.

What is Raytheon Company's track record with similar DoD contracts, particularly regarding cost performance and delivery timeliness?

Raytheon Company is a major defense contractor with extensive experience in supplying aircraft parts and systems to the Department of Defense. While specific performance metrics for this particular $115.6 million contract are not detailed in the provided data, Raytheon's overall track record with the DoD is generally robust, marked by the successful execution of numerous large-scale programs. However, like many large contractors, they may have faced challenges on specific contracts related to cost overruns or delivery delays, which are common in complex defense manufacturing. A thorough assessment would require reviewing contract performance reports, past performance evaluations, and any documented instances of disputes or corrective actions related to Raytheon's prior awards in this category.

What is the potential impact of this contract on the broader aerospace manufacturing supply chain and small business participation?

This contract, valued at $115.6 million and awarded to Raytheon Company, likely has a significant impact on the aerospace manufacturing supply chain. As a large prime contractor, Raytheon relies on a network of subcontractors, potentially including small businesses, to fulfill its obligations. The sustained nature of the contract over 13 years suggests a stable demand for specific components, which can provide predictability for suppliers. However, the data indicates no specific small business set-aside (sb: false), meaning small business participation would be through subcontracting. The extent to which Raytheon engages small businesses as subcontractors is critical for assessing the contract's broader economic impact on the small business ecosystem within the defense industrial base.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 5

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 6125 E 21ST ST, INDIANAPOLIS, IN, 46219

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $115,909,433

Exercised Options: $115,641,258

Current Obligation: $115,611,781

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA853008D0012

IDV Type: IDC

Timeline