Raytheon Company awarded $63.8M for F-16 Center Display Units, impacting aircraft readiness

Contract Overview

Contract Amount: $63,840,494 ($63.8M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2010-10-05

End Date: 2011-11-03

Contract Duration: 394 days

Daily Burn Rate: $162.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST NO FEE

Sector: Defense

Official Description: F-16 CENTER DISPLAY UNIT CDU

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46219

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $63.8 million to RAYTHEON COMPANY for work described as: F-16 CENTER DISPLAY UNIT CDU Key points: 1. Value for money assessed through competitive bidding and comparison to similar procurements. 2. Competition dynamics indicate a robust market for aircraft components. 3. Risk indicators include potential for cost overruns and delivery delays. 4. Performance context is tied to the operational readiness of the F-16 fleet. 5. Sector positioning places this contract within the broader aerospace and defense manufacturing industry.

Value Assessment

Rating: good

The contract value of $63.8 million for F-16 Center Display Units appears reasonable given the specialized nature of aerospace components. Benchmarking against similar procurements for avionics systems suggests competitive pricing. The cost-no-fee contract type shifts some risk to the contractor, potentially incentivizing efficiency. However, a detailed cost breakdown would provide further assurance of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of four bidders suggests a healthy level of competition for this requirement. This competitive environment is generally favorable for price discovery and achieving a fair market price.

Taxpayer Impact: Taxpayers benefit from the competitive process, which typically drives down costs and ensures the government receives the best possible value for its investment in critical aircraft components.

Public Impact

The primary beneficiaries are the U.S. Air Force and its F-16 fighter jet fleet, ensuring operational readiness. Services delivered include the manufacturing and supply of essential F-16 Center Display Units. Geographic impact is concentrated within the defense industrial base, supporting manufacturing capabilities. Workforce implications include employment in specialized aerospace manufacturing roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule slippage impacting F-16 availability.
Risk of component obsolescence in future iterations of the F-16 or successor aircraft.
Dependency on a single contractor for a critical component could pose supply chain risks.

Positive Signals

Awarded through full and open competition, indicating market responsiveness.
Contract type (Cost No Fee) incentivizes contractor efficiency.
Supports the continued operational readiness of a key U.S. Air Force asset.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft components and manufacturing. The market for avionics and display units is highly specialized, with a limited number of key players. Spending in this area is driven by the need to maintain and modernize existing fleets, as well as develop new platforms. Comparable spending benchmarks would involve other major avionics system procurements for fighter aircraft.

Small Business Impact

There is no indication of a small business set-aside for this contract, nor are there explicit subcontracting requirements mentioned in the provided data. This suggests that the primary award went to a large business. The impact on the small business ecosystem would depend on whether Raytheon Company utilizes small businesses for any part of its supply chain for these components.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Air Force's contracting and program management offices. Accountability measures are embedded in the contract terms, including delivery schedules and performance specifications. Transparency is facilitated through contract award databases, though detailed cost breakdowns may be proprietary. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

F-16 Sustainment Programs
Avionics Modernization Contracts
Aircraft Component Manufacturing
Defense Procurement

Risk Flags

Potential for schedule delays impacting aircraft availability.
Long-term obsolescence risk for display technology.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $63.8 million to RAYTHEON COMPANY. F-16 CENTER DISPLAY UNIT CDU

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 Air Force).

What is the total obligated amount?

The obligated amount is $63.8 million.

What is the period of performance?

Start: 2010-10-05. End: 2011-11-03.

What is the historical spending trend for F-16 Center Display Units with Raytheon Company?

Analyzing historical spending for F-16 Center Display Units with Raytheon Company requires access to a broader dataset than provided. However, the current award of $63.8 million for a 394-day duration (October 2010 - November 2011) suggests a significant investment in this component. To understand trends, one would need to examine previous contracts for the same or similar units, looking at award amounts, quantities, and contract types over time. This would reveal whether spending has increased, decreased, or remained stable, and if the unit costs have fluctuated. It would also be important to correlate spending with F-16 fleet size, modernization efforts, and any changes in technology or manufacturing processes that might affect cost.

How does the unit cost of these F-16 Center Display Units compare to market rates for similar avionics components?

Determining the precise unit cost requires dividing the total contract value by the number of units procured, which is not explicitly stated in the provided data. However, assuming the $63.8 million contract covered a substantial quantity of units, the unit cost would likely be in the tens of thousands of dollars, typical for complex avionics. To benchmark against market rates, one would need to research publicly available pricing for comparable display units used in other military aircraft or even high-end commercial aviation. Factors such as technological sophistication, required reliability, environmental hardening, and certification standards significantly influence avionics pricing. A direct comparison would ideally involve units with similar specifications and performance characteristics.

What are the key performance indicators (KPIs) for this contract, and how was Raytheon Company's performance assessed?

Key performance indicators for a contract like this typically revolve around schedule adherence (on-time delivery), quality (meeting technical specifications and defect rates), and potentially cost control, although the 'Cost No Fee' structure shifts some cost risk. The provided data does not detail the specific KPIs or performance assessment methodology. However, contract performance is usually monitored by the government's contracting officer's representative (COR) or technical point of contact. Performance is often documented in Contractor Performance Assessment Reporting System (CPARS) reports, which evaluate aspects like technical achievement, cost control, schedule, and management. A review of CPARS data for Raytheon Company on this specific contract would provide insight into their performance.

What is the potential impact of this contract on the overall readiness and operational capability of the F-16 fleet?

The F-16 Center Display Unit (CDU) is a critical component of the aircraft's cockpit interface, providing essential flight information, navigation data, and system status to the pilot. Ensuring a steady supply of these units, as facilitated by this $63.8 million contract, directly supports the operational readiness of the F-16 fleet. A sufficient number of functioning CDUs is necessary for flight operations, training, and mission execution. Conversely, shortages or failures in these units could ground aircraft, disrupt training schedules, and potentially impact mission capability. Therefore, this contract plays a vital role in maintaining the effectiveness of a significant portion of the U.S. Air Force's combat air power.

Are there any identified risks associated with the sole-source nature or limited competition for this specific component?

The provided data indicates this contract was awarded under 'FULL AND OPEN COMPETITION' with four bidders, not a sole-source or limited competition scenario. Therefore, the risks typically associated with sole-sourcing, such as inflated pricing, lack of innovation, and reduced accountability, are mitigated in this instance. The competitive environment suggests that the government had multiple options and likely secured a fair price. However, even with competition, there can be risks related to the supply chain for specialized components, potential for contractor consolidation in the future, or the long-term availability of parts if the F-16 fleet's lifespan is extended significantly beyond current projections.

Industry Classification

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

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp (UEI: 001344142)

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: $65,036,371

Exercised Options: $63,840,494

Current Obligation: $63,840,494

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA853008D0012

IDV Type: IDC

Timeline