DoD's $30.4M Patriot Tech contract with Raytheon raises concerns over limited competition and cost-plus structure
Contract Overview
Contract Amount: $30,420,572 ($30.4M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2021-05-06
End Date: 2026-05-05
Contract Duration: 1,825 days
Daily Burn Rate: $16.7K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: PATRIOT TECH PUBS (US)
Place of Performance
Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810
Plain-Language Summary
Department of Defense obligated $30.4 million to RAYTHEON COMPANY for work described as: PATRIOT TECH PUBS (US) Key points: 1. The contract awarded to Raytheon Company for navigation systems is a significant expenditure. 2. Limited competition raises questions about potential overspending and lack of market pressure. 3. The Cost Plus Fixed Fee (CPFF) contract type can incentivize cost overruns. 4. The Defense Logistics Agency is the awarding agency, indicating a focus on military readiness.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee structure, combined with a lack of competition, suggests potential for inflated costs. Benchmarking against similar navigation system contracts is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
This contract was not competed, indicating a sole-source or limited source award. This significantly restricts price discovery and may lead to higher costs for taxpayers compared to a fully competitive process.
Taxpayer Impact: The lack of competition and potentially inefficient contract type could result in millions of taxpayer dollars being spent unnecessarily.
Public Impact
Taxpayers may be overpaying for critical defense navigation systems due to a lack of competitive bidding. The reliance on a single contractor, Raytheon, could stifle innovation in the defense navigation sector. The long duration of the contract (5 years) means potential cost inefficiencies will persist over an extended period.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of Competition
- Cost-Plus Contract Type
- Long Contract Duration
Positive Signals
- Awarded to a known defense contractor
- Supports critical defense logistics
Sector Analysis
This contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector. Spending in this area is crucial for national security, but competitive procurement is vital to ensure value for money.
Small Business Impact
There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. This represents a missed opportunity to support small business participation in defense contracting.
Oversight & Accountability
The lack of competition and the CPFF structure warrant closer oversight from the Department of Defense and Congress to ensure cost control and accountability.
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 competitive bidding
- Cost-plus contract type may lead to higher costs
- Potential for contractor inefficiency
- Limited transparency on justification for sole-source award
- No small business participation noted
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 $30.4 million to RAYTHEON COMPANY. PATRIOT TECH PUBS (US)
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 $30.4 million.
What is the period of performance?
Start: 2021-05-06. End: 2026-05-05.
What specific factors justified the 'NOT COMPETED' determination for this significant contract?
The justification for not competing this contract is not provided in the data. Typically, such determinations are made when only one source can meet the requirement due to unique capabilities, urgent needs, or specific security concerns. However, without further documentation, it's impossible to ascertain the precise rationale, raising questions about whether alternatives were adequately explored.
How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types in managing risk for navigation system procurements?
CPFF contracts shift much of the cost risk to the government, as the contractor is reimbursed for all allowable costs plus a fixed fee. While it can be useful for research and development or when cost uncertainty is high, it offers less incentive for the contractor to control costs compared to fixed-price contracts. For established systems like navigation instruments, fixed-price contracts often provide better value and cost certainty.
What is the potential impact on technological advancement in navigation systems if contracts are consistently awarded without competition?
Consistently awarding contracts without competition can stifle technological advancement by reducing the incentive for innovation. When a single contractor is guaranteed business, they may face less pressure to invest in research and development or adopt cutting-edge technologies. This can lead to the government procuring outdated systems and missing out on more efficient or effective solutions developed by a competitive market.
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: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Rockwell Collins Australia PTY Limited
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: $30,420,572
Exercised Options: $30,420,572
Current Obligation: $30,420,572
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: 2021-05-06
Current End Date: 2026-05-05
Potential End Date: 2026-05-05 12:05:00
Last Modified: 2025-04-15
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