DoD Awards Raytheon $206M for Navigation Systems, Lacking Competition
Contract Overview
Contract Amount: $205,839,540 ($205.8M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2021-08-01
End Date: 2026-07-31
Contract Duration: 1,825 days
Daily Burn Rate: $112.8K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: UAE TA
Place of Performance
Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810
Plain-Language Summary
Department of Defense obligated $205.8 million to RAYTHEON COMPANY for work described as: UAE TA Key points: 1. Significant contract value of $205.8M awarded to a single large defense contractor. 2. Lack of competition raises concerns about potential overpricing and limited innovation. 3. Contract duration of 5 years suggests a long-term need for these systems. 4. The sector is critical for defense operations, but procurement methods warrant scrutiny.
Value Assessment
Rating: questionable
Without competitive bids, it's difficult to assess if the $205.8M price represents fair market value. Benchmarking against similar sole-source contracts for navigation systems is recommended.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This method limits price discovery and may lead to higher costs for taxpayers compared to a competitive process.
Taxpayer Impact: The absence of competition could result in taxpayers paying more than necessary for these critical navigation systems.
Public Impact
Taxpayers may be overpaying for essential defense navigation technology due to a lack of competitive bidding. The long-term nature of the contract could lock the government into a potentially suboptimal pricing arrangement. Reduced innovation is a risk when contracts are consistently awarded without competition.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Long contract duration
- No small business participation indicated
Positive Signals
- Critical defense system procurement
- Established contractor with proven capabilities
Sector Analysis
This contract falls within the Defense sector, specifically for navigation systems. Spending benchmarks for similar sole-source procurements in this sub-sector are needed for a more precise value assessment.
Small Business Impact
There is no indication of small business participation in this contract. Future solicitations should explore opportunities for small businesses to contribute to the supply chain.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the contractor is delivering value and that pricing remains reasonable throughout the contract term.
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 may lead to inflated costs.
- Potential for reduced innovation due to sole-source award.
- Long contract duration limits flexibility and potential cost savings.
- No clear small business participation strategy identified.
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 $205.8 million to RAYTHEON COMPANY. UAE TA
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 $205.8 million.
What is the period of performance?
Start: 2021-08-01. End: 2026-07-31.
What is the justification for awarding this contract on a sole-source basis, and what steps are being taken to ensure fair pricing?
The justification for a sole-source award typically involves unique capabilities or circumstances where only one source can meet the requirement. However, without transparency into this specific justification, it's difficult to assess. Agencies should provide detailed rationale and conduct thorough price analyses, potentially using historical data or independent cost estimates, to mitigate the risk of overpayment and ensure taxpayer funds are used efficiently.
How does the $205.8M cost compare to industry benchmarks for similar navigation systems, especially considering the lack of competition?
Benchmarking is challenging without competitive data. However, the absence of competition inherently increases the risk of the price being higher than it would be in a competitive environment. A thorough review of similar sole-source contracts, or independent cost estimates for the components and services, would be necessary to determine if the price is reasonable and reflects fair market value.
What is the long-term strategy for procuring these navigation systems to ensure future cost-effectiveness and technological relevance?
The 5-year duration suggests a need for a long-term strategy. The agency should consider market research for future procurements to identify potential competitors and explore options for breaking down the requirement into smaller, more competitive contracts. This could foster innovation and ensure the government benefits from evolving technologies and competitive pricing over time.
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: 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: $205,839,540
Exercised Options: $205,839,540
Current Obligation: $205,839,540
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: 2021-08-01
Current End Date: 2026-07-31
Potential End Date: 2026-07-31 12:07:00
Last Modified: 2025-02-06
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