Raytheon Company awarded $27.1M for Depot Maintenance Plant Equipment by the Department of Defense

Contract Overview

Contract Amount: $27,137,644 ($27.1M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2019-10-18

End Date: 2022-10-31

Contract Duration: 1,109 days

Daily Burn Rate: $24.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DEPOT MAINTENANCE PLANT EQUIPMENT

Place of Performance

Location: WALTHAM, MIDDLESEX County, MASSACHUSETTS, 02451

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $27.1 million to RAYTHEON COMPANY for work described as: DEPOT MAINTENANCE PLANT EQUIPMENT Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. The contract duration of 1109 days suggests a long-term need for the equipment. 3. Fixed-price contract type aims to control costs for the government. 4. The North American Industry Classification System (NAICS) code 334511 indicates a focus on manufacturing instruments for search, detection, and navigation. 5. This award represents a significant investment in maintaining critical defense infrastructure. 6. The absence of small business set-asides warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to the sole-source nature and specific equipment type. Without competitive bids, it's difficult to ascertain if the $27.1 million represents optimal value for money. The firm fixed-price structure provides some cost certainty, but the lack of competition could lead to higher-than-market prices. Further analysis would require comparing the specific equipment's pricing to similar procurements or market rates, which are not readily available in the provided data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Raytheon Company, was solicited. This approach bypasses the competitive bidding process, which typically drives down prices and encourages innovation. While sole-source awards can be justified for unique capabilities or urgent needs, they inherently reduce price discovery and may result in less favorable terms for the government compared to a fully competed contract.

Taxpayer Impact: Taxpayers may be paying a premium for this equipment due to the lack of competition. Without multiple bids, there is no market pressure to ensure the lowest possible price is achieved.

Public Impact

The Department of Defense benefits from the acquisition of essential depot maintenance plant equipment. This equipment is crucial for maintaining and repairing defense systems, ensuring operational readiness. The contract supports the defense industrial base, particularly in the manufacturing of navigation and guidance systems. The geographic impact is primarily within Massachusetts, where the contractor is located, potentially supporting local jobs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source award limits transparency in the procurement process.
No indication of small business participation or subcontracting goals.

Positive Signals

Firm fixed-price contract provides cost certainty.
Award supports critical defense maintenance capabilities.
Contract duration indicates a sustained need for the equipment.

Sector Analysis

The contract falls within the "Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing" sector, classified under NAICS code 334511. This is a specialized segment of the manufacturing industry focused on high-technology defense and aerospace components. The market size for such specialized equipment is often driven by government defense spending and technological advancements. Comparable spending benchmarks would typically involve analyzing other procurements for similar depot maintenance equipment or related manufacturing instruments within the Department of Defense or other federal agencies.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This means that Raytheon Company, a large business, was the sole recipient of the award. Without a small business set-aside or explicit subcontracting requirements, there is a risk that small businesses will not benefit from this significant federal expenditure. Further review of the contract's terms and conditions would be necessary to determine if any subcontracting plans were mandated.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and financial management offices. The Defense Logistics Agency (DLA) is the awarding agency, suggesting their oversight mechanisms are in place. As a firm fixed-price contract, financial oversight would focus on ensuring delivery and compliance with terms. Transparency is limited due to the sole-source nature. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Depot Maintenance
Plant Equipment
Defense Logistics Agency Procurements
Raytheon Company Contracts
Navigation System Manufacturing
Guidance System Manufacturing

Risk Flags

Sole-source award lacks competitive pricing.
Potential for higher costs to taxpayers.
Limited transparency in procurement justification.
No explicit small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.1 million to RAYTHEON COMPANY. DEPOT MAINTENANCE PLANT EQUIPMENT

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 $27.1 million.

What is the period of performance?

Start: 2019-10-18. End: 2022-10-31.

What is Raytheon Company's track record with the Department of Defense for similar equipment procurements?

Raytheon Company, now part of RTX, has a long and extensive history of contracting with the Department of Defense across various sectors, including defense electronics, aerospace, and cybersecurity. While specific data on their track record for 'Depot Maintenance Plant Equipment' is not detailed here, their overall portfolio includes numerous large-scale contracts for complex systems and components. Analyzing their past performance on similar firm fixed-price contracts, especially those involving manufacturing and specialized equipment, would provide insight into their reliability and cost management capabilities. Historical data from contract databases like FPDS or SAM.gov would be necessary to assess their performance trends, delivery timeliness, and any past disputes or contract modifications.

How does the $27.1 million award compare to other federal spending on depot maintenance plant equipment?

Directly comparing the $27.1 million award for 'Depot Maintenance Plant Equipment' to other federal spending requires access to comprehensive historical spending data across all agencies and contract types. The provided data indicates this is a significant award for a specific type of equipment under NAICS 334511. However, without a broader market analysis or benchmark data for similar procurements, it's difficult to definitively state if this amount is high or low relative to the overall federal market. Factors such as the specific capabilities of the equipment, the duration of the contract (1109 days), and the sole-source nature influence the total value. A more thorough analysis would involve querying federal procurement databases for similar items over several fiscal years to establish a spending trend and identify comparable contract values.

What are the primary risks associated with this sole-source contract for depot maintenance plant equipment?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competition. When only one vendor is solicited, there is no market pressure to ensure the government receives the best possible price. This can lead to higher costs for taxpayers. Another risk is reduced transparency in the procurement process, making it harder to scrutinize the justification for the sole-source award and the reasonableness of the price. Furthermore, if Raytheon Company faces production issues or delays, the government has limited leverage compared to a situation with multiple bidders. The reliance on a single supplier also poses a risk to supply chain resilience if unforeseen events impact the contractor's ability to deliver.

How effective is the firm fixed-price contract type in managing costs for this type of equipment?

The firm fixed-price (FFP) contract type is generally considered effective for managing costs when the scope of work and requirements are well-defined and unlikely to change significantly. For 'Depot Maintenance Plant Equipment,' where the specifications are likely established, FFP provides cost certainty for the government. The contractor assumes the risk of cost overruns, incentivizing them to manage their expenses efficiently. This structure helps prevent scope creep and unexpected cost increases that can plague cost-reimbursement contracts. However, the effectiveness of FFP in this sole-source scenario is diminished, as the initial price negotiation lacks the competitive pressure that would typically ensure a fair market price is established from the outset.

What are the historical spending patterns for 'Depot Maintenance Plant Equipment' by the Defense Logistics Agency?

Historical spending patterns for 'Depot Maintenance Plant Equipment' by the Defense Logistics Agency (DLA) are not detailed in the provided data. However, the DLA is responsible for providing logistics support to the U.S. Armed Forces, which includes the procurement and maintenance of a wide range of equipment, including plant equipment for depots. Awards for such equipment are typically driven by the lifecycle needs of military installations and the modernization of their facilities. Analyzing DLA's historical procurement data over several years would reveal trends in spending on plant equipment, the types of equipment most frequently purchased, and the primary contractors involved. This specific $27.1 million award suggests a notable investment in this category during the contract period (2019-2022).

What are the implications of the NAICS code 334511 for this contract's scope and the contractor's expertise?

The North American Industry Classification System (NAICS) code 334511, 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing,' indicates that the equipment procured under this contract is highly specialized and technologically advanced. This code signifies that the contract likely involves manufacturing or supplying instruments critical for military operations, such as radar systems, GPS devices, flight control instruments, or related components. Raytheon Company's expertise in defense electronics and aerospace systems aligns well with this NAICS code, suggesting they possess the necessary technical capabilities and manufacturing infrastructure to fulfill the contract requirements. This specialization implies a focus on high-precision, reliable equipment essential for defense readiness.

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: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

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: $27,137,644

Exercised Options: $27,137,644

Current Obligation: $27,137,644

Contract Characteristics

Consolidated Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: SPRBL115D0017

IDV Type: IDC

Timeline