DoD's $53.9M Raytheon ADI MANPADS Contract Lacks Competition, Raises Value Concerns
Contract Overview
Contract Amount: $53,890,424 ($53.9M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2019-04-04
End Date: 2023-09-28
Contract Duration: 1,638 days
Daily Burn Rate: $32.9K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: END SYSTEM IS AIR DEFENSE INTERROGATOR (ADI) MANPADS PART IS 5895-01-667-3467 PPX-4(V)1 PN B8071889-0501
Place of Performance
Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810
Plain-Language Summary
Department of Defense obligated $53.9 million to RAYTHEON COMPANY for work described as: END SYSTEM IS AIR DEFENSE INTERROGATOR (ADI) MANPADS PART IS 5895-01-667-3467 PPX-4(V)1 PN B8071889-0501 Key points: 1. Significant spending on a critical defense system. 2. Sole-source award to Raytheon Company limits competitive pricing. 3. Potential for overpayment due to lack of market price discovery. 4. High-value contract within the Defense Logistics Agency's purview.
Value Assessment
Rating: questionable
The contract's value of $53.9M for the ADI MANPADS is difficult to assess without competitive benchmarks. The lack of competition suggests potential for inflated pricing compared to what might be achieved in a more open market.
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 significantly limits price discovery and may lead to less favorable pricing for the government.
Taxpayer Impact: Taxpayers may be overpaying for this critical defense equipment due to the absence of competitive bidding.
Public Impact
Ensures availability of critical air defense systems for military operations. Supports Raytheon Company's role as a key defense contractor. Highlights potential inefficiencies in sole-source defense procurement. Impacts readiness by potentially limiting the quantity of systems acquired for the budget.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Sole-source award
- Potential for overpricing
Positive Signals
- Critical defense system acquisition
- Supports military readiness
Sector Analysis
This contract falls under the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector. Defense spending in this area is substantial, with sole-source awards often justified for specialized, high-tech systems, though they warrant close scrutiny for value.
Small Business Impact
The data indicates this contract was awarded to Raytheon Company, a large business. There is no indication of small business participation in this specific sole-source award.
Oversight & Accountability
The Department of Defense, specifically the Defense Logistics Agency, is responsible for this contract. Oversight should focus on ensuring the necessity of the sole-source award and validating the pricing through independent means.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Sole-source award limits price competition.
- Potential for above-market pricing.
- Lack of transparency in price justification.
- Dependency on a single supplier for critical equipment.
Tags
search-detection-navigation-guidance-aer, department-of-defense, ma, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $53.9 million to RAYTHEON COMPANY. END SYSTEM IS AIR DEFENSE INTERROGATOR (ADI) MANPADS PART IS 5895-01-667-3467 PPX-4(V)1 PN B8071889-0501
Who is the contractor on this award?
The obligated recipient is RAYTHEON COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $53.9 million.
What is the period of performance?
Start: 2019-04-04. End: 2023-09-28.
What is the justification for the sole-source award of this critical air defense system?
The justification for a sole-source award typically rests on factors such as unique capabilities, proprietary technology, or the absence of viable alternative sources. For the ADI MANPADS, it's likely related to specific performance requirements or integration with existing systems that only Raytheon can meet. Further documentation would be needed to confirm the precise rationale.
How can the government ensure fair pricing without competition for this contract?
Without competition, the government must rely on robust price analysis techniques. This includes comparing the proposed prices to historical prices for similar items, using cost realism analyses to scrutinize the contractor's proposed costs, and potentially negotiating based on independent government cost estimates or market research for comparable technologies.
What is the long-term strategic risk of relying on sole-source contracts for essential defense equipment?
Long-term reliance on sole-source contracts can stifle innovation, reduce overall defense industrial base resilience, and lead to sustained higher costs. It can also create dependency on a single supplier, making the supply chain vulnerable to disruptions and potentially limiting the government's leverage in future negotiations.
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: WEAPONS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: RTX Corp
Address: 350 LOWELL ST, ANDOVER, MA, 01810
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: $53,890,424
Exercised Options: $53,890,424
Current Obligation: $53,890,424
Actual Outlays: $9,438,808
Subaward Activity
Number of Subawards: 10
Total Subaward Amount: $10,060,003
Contract Characteristics
Consolidated Contract: Yes
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: SPRBL115D0017
IDV Type: IDC
Timeline
Start Date: 2019-04-04
Current End Date: 2023-09-28
Potential End Date: 2023-09-28 12:09:00
Last Modified: 2022-10-29
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