DoD Awards Raytheon $149M for Navigation Systems, Lacking Competition
Contract Overview
Contract Amount: $149,408,346 ($149.4M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2020-01-29
End Date: 2028-02-01
Contract Duration: 2,925 days
Daily Burn Rate: $51.1K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: PMSC
Place of Performance
Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810
Plain-Language Summary
Department of Defense obligated $149.4 million to RAYTHEON COMPANY for work described as: PMSC Key points: 1. Significant contract value of $149.4M awarded to a single large business. 2. Lack of competition raises concerns about potential overpricing and value for money. 3. The contract is for critical navigation and guidance systems, essential for defense operations. 4. Sector focus is on IT/Defense, with specific application in system and instrument manufacturing.
Value Assessment
Rating: questionable
The contract's value of $149.4M is substantial. Without competitive bidding, it's difficult to assess if the pricing is optimal compared to similar systems or if it reflects fair market value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source or limited competition award. This significantly reduces price discovery mechanisms and may lead to higher costs for taxpayers.
Taxpayer Impact: The absence of competition could result in taxpayers paying a premium for these essential navigation systems.
Public Impact
Impacts military readiness by procuring essential navigation and guidance equipment. Potential for increased defense spending due to lack of competitive pressure. Highlights reliance on specific contractors for critical defense technology.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Sole-source award
- High contract value
Positive Signals
- Essential defense procurement
- Long-term contract duration
Sector Analysis
This contract falls within the Defense sector, specifically focusing on the manufacturing of navigation and guidance systems. Spending benchmarks in this niche area are hard to establish without competitive data, but large sole-source awards warrant scrutiny.
Small Business Impact
The contract was awarded to Raytheon Company, a large business. There is no indication that small businesses were involved in this specific award, missing an opportunity for their participation.
Oversight & Accountability
The sole-source nature of this award suggests limited oversight on pricing. Further review by the Defense Contract Audit Agency (DCAA) or similar bodies would be beneficial to ensure fair pricing.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Lack of competition
- Sole-source award
- Potential for overpricing
- Limited small business participation
- High contract value
Tags
search-detection-navigation-guidance-aer, department-of-defense, ma, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $149.4 million to RAYTHEON COMPANY. PMSC
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 $149.4 million.
What is the period of performance?
Start: 2020-01-29. End: 2028-02-01.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Without specific details on this contract's justification, it's presumed the agency determined Raytheon as the only capable source. However, rigorous price analysis, including cost breakdowns and comparisons to similar historical contracts, should have been performed to ensure fair and reasonable pricing despite the lack of competition.
What are the potential risks associated with a sole-source contract of this magnitude for critical defense systems?
The primary risk is inflated costs due to the absence of competitive pressure, leading to inefficient use of taxpayer funds. Other risks include potential complacency from the contractor regarding innovation and quality, and a lack of flexibility if requirements change. Furthermore, over-reliance on a single source can create vulnerabilities in the supply chain and national security if that source faces disruptions.
How does this contract contribute to the overall effectiveness and readiness of the Department of Defense's navigation and guidance capabilities?
This contract ensures the continued availability and potential modernization of critical navigation and guidance systems essential for various military platforms. By securing these systems through a long-term award, the DoD aims to maintain operational readiness and technological superiority in these areas. The effectiveness hinges on the quality and reliability of the delivered systems and the contractor's performance throughout the contract period.
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: $149,408,346
Exercised Options: $149,408,346
Current Obligation: $149,408,346
Actual Outlays: $6,365,251
Subaward Activity
Number of Subawards: 25
Total Subaward Amount: $4,890,303
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
Start Date: 2020-01-29
Current End Date: 2028-02-01
Potential End Date: 2028-02-01 00:00:00
Last Modified: 2025-12-16
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