Raytheon Company awarded $15.5M for Global Broadcast System sustainment, a sole-source contract

Contract Overview

Contract Amount: $15,447,034 ($15.4M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2008-01-31

End Date: 2010-09-30

Contract Duration: 973 days

Daily Burn Rate: $15.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: GLOBAL BROADCAST SYSTEM SBM O&M SUSTAINMENT

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $15.4 million to RAYTHEON COMPANY for work described as: GLOBAL BROADCAST SYSTEM SBM O&M SUSTAINMENT Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can lead to cost overruns if not managed carefully. 2. The contract was not competed, raising questions about potential price efficiencies and value for money. 3. Duration of 973 days suggests a long-term need for sustainment services. 4. The specific services provided under 'Engineering Services' are broad and require further detail to assess performance. 5. Awarded to a single, large defense contractor, potentially limiting opportunities for smaller, specialized firms.

Value Assessment

Rating: questionable

Benchmarking the value for this specific contract is challenging due to its sole-source nature and the broad 'Engineering Services' category. Without competitive bids, it's difficult to ascertain if the pricing reflects market rates or if Raytheon Company provided the most cost-effective solution. The cost-plus-fixed-fee structure necessitates close oversight to ensure costs remain reasonable and that the fixed fee is appropriate for the scope of work. Further analysis of the detailed cost breakdowns would be needed for a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities or when urgency dictates a rapid award. The lack of competition means there was no direct price comparison with other potential providers, which can sometimes lead to higher costs for the government. It also limits the government's ability to explore a wider range of technical solutions or innovative approaches that might be offered by other firms.

Taxpayer Impact: Sole-source awards can result in taxpayers paying a premium, as the government does not benefit from the price reductions typically driven by competitive bidding processes. This can also indicate a lack of market research or a failure to identify alternative sources for the required services.

Public Impact

The Department of Defense benefits from the sustainment of the Global Broadcast System, ensuring continued operational capability. Services provided are critical for maintaining the functionality and reliability of a key military communication network. The contract supports specialized engineering and maintenance personnel, likely within Raytheon Company's workforce. Geographic impact is likely global, given the nature of broadcast systems supporting military operations worldwide.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Cost-plus-fixed-fee contract type requires robust oversight to prevent cost overruns.
Sole-source award limits opportunities for small businesses to participate.

Positive Signals

Awarded to a known entity (Raytheon Company) with established capabilities in defense contracting.
Contract addresses sustainment, indicating a focus on maintaining existing critical infrastructure.
The contract duration suggests a stable, long-term requirement for these services.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense-related infrastructure. The market for defense sustainment services is dominated by large, established aerospace and defense contractors. Spending in this area is driven by the need to maintain aging military systems and ensure their operational readiness. Comparable spending benchmarks would typically involve other sustainment contracts for complex communication or command and control systems within the Department of Defense.

Small Business Impact

This contract was not competed and there is no indication of a small business set-aside. As a sole-source award to a large prime contractor, it is unlikely to include significant subcontracting opportunities for small businesses unless explicitly mandated. This limits the direct economic benefit to the small business ecosystem for this particular award.

Oversight & Accountability

Oversight for this contract would fall under the Department of the Air Force's contracting and program management offices. Given the sole-source nature and cost-plus-fixed-fee structure, rigorous financial and performance monitoring is crucial. Transparency would be enhanced through regular reporting requirements from the contractor and potential audits by government agencies or the Inspector General's office, although specific IG involvement is not detailed here.

Related Government Programs

Global Broadcast System (GBS)
Defense Communications Infrastructure
Engineering Services Contracts
Aerospace and Defense Sustainment

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.4 million to RAYTHEON COMPANY. GLOBAL BROADCAST SYSTEM SBM O&M SUSTAINMENT

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 $15.4 million.

What is the period of performance?

Start: 2008-01-31. End: 2010-09-30.

What is the historical spending trend for the Global Broadcast System sustainment program?

Analyzing historical spending for the Global Broadcast System (GBS) sustainment program is crucial for understanding long-term investment and identifying potential cost trends. While this specific award covers a period from 2008 to 2010, it represents a segment of the overall GBS sustainment lifecycle. To provide a comprehensive view, data from previous and subsequent contracts for GBS sustainment would be needed. This would allow for an assessment of whether spending has increased, decreased, or remained stable over time, and whether the $15.5 million awarded to Raytheon Company is in line with historical expenditures for similar sustainment periods. Without access to a broader dataset of GBS sustainment contracts, it's difficult to establish a definitive historical spending pattern or identify any significant deviations.

How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for similar sustainment services?

The Cost-Plus-Fixed-Fee (CPFF) contract type, used here, reimburses the contractor for allowable costs plus a fixed fee representing profit. This structure is often employed when the scope of work is not precisely defined or when there's a high degree of uncertainty, such as in complex sustainment operations. Compared to fixed-price contracts, CPFF offers more flexibility but carries a higher risk of cost growth for the government if costs escalate beyond initial estimates. Other common contract types for sustainment include Firm-Fixed-Price (FFP), which offers the government the best price certainty but can disincentivize the contractor from exceeding basic requirements, and Cost-Plus-Incentive-Fee (CPIF), which shares cost savings and overruns between the government and contractor, incentivizing efficiency. For sustainment services, the choice of contract type significantly impacts risk allocation and potential for cost control.

What are the specific performance metrics and deliverables associated with this contract?

The provided data does not detail the specific performance metrics and deliverables for the Global Broadcast System (GBS) O&M Sustainment contract awarded to Raytheon Company. Typically, sustainment contracts for complex systems like GBS would include requirements related to system uptime, response times for maintenance and repair, availability of spare parts, and successful execution of planned maintenance schedules. Deliverables might include regular performance reports, maintenance logs, updated technical documentation, and successful completion of system upgrades or modifications. Without access to the contract's Statement of Work (SOW) or Performance Work Statement (PWS), a thorough assessment of the contractor's obligations and the government's ability to measure performance against defined standards is not possible.

What is Raytheon Company's track record with the Global Broadcast System or similar defense communication systems?

Raytheon Company, now part of RTX, has a long history of providing complex systems and services to the Department of Defense, including in the areas of command, control, communications, computers, and intelligence (C4I). Their involvement with the Global Broadcast System (GBS) likely stems from their expertise in satellite communications, network engineering, and sustainment of large-scale defense infrastructure. While this specific contract highlights their role in GBS sustainment, Raytheon has a broader portfolio encompassing similar large-scale communication and information systems. Assessing their track record would involve reviewing past performance evaluations, contract awards, and any documented issues or successes related to their management of similar critical defense systems, looking for consistency in meeting performance requirements and managing costs effectively.

What is the estimated total cost of ownership for the Global Broadcast System over its lifecycle?

Estimating the total cost of ownership (TCO) for the Global Broadcast System (GBS) is a complex undertaking that extends far beyond the $15.5 million awarded for this specific sustainment contract (2008-2010). TCO encompasses all costs associated with acquiring, operating, maintaining, and eventually disposing of the system. This includes initial procurement, infrastructure development, software licenses, personnel training, ongoing sustainment (like the awarded contract), upgrades, and eventual decommissioning. To calculate TCO, one would need data on all previous and future investments in GBS, including hardware, software, and services across its entire operational lifespan. This specific contract represents only a fraction of the overall GBS lifecycle costs.

Industry Classification

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

Product/Service Code: QUALITY CONTROL, TEST, INSPECTION › OTHER QUALITY, TEST, INSPECT SVCS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1768 BUSINESS CENTER DR, RESTON, VA, 11

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $15,447,034

Exercised Options: $15,447,034

Current Obligation: $15,447,034

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA820706D0001

IDV Type: IDC

Timeline