DoD Awards Raytheon $41.3M for Navigation Systems, Lacking Competition

Contract Overview

Contract Amount: $41,318,696 ($41.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2022-10-31

End Date: 2026-02-28

Contract Duration: 1,216 days

Daily Burn Rate: $34.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: POLAND TA

Place of Performance

Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $41.3 million to RAYTHEON COMPANY for work described as: POLAND TA Key points: 1. Significant contract value of $41.3 million awarded to a single large business. 2. Lack of competition raises concerns about potential overpricing and reduced value. 3. Contract duration extends to February 2026, indicating a long-term need. 4. Focus on critical navigation systems highlights defense sector importance.

Value Assessment

Rating: questionable

The contract's value of $41.3 million for navigation systems appears high given the lack of competitive bidding. Without comparison to similar contracts or market rates, it's difficult to ascertain if this price represents fair value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This significantly limits price discovery and may lead to higher costs for taxpayers as there was no opportunity for multiple vendors to bid.

Taxpayer Impact: The absence of competition likely results in a higher cost to taxpayers than if the contract had been competitively bid.

Public Impact

Taxpayers may be overpaying for essential defense navigation equipment. Limited visibility into the justification for a sole-source award. Potential for reduced innovation due to lack of competitive pressure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
High contract value

Positive Signals

Critical defense system
Long-term contract

Sector Analysis

This contract falls within the defense sector, specifically for navigation systems. Spending in this area is critical for military operations, but competitive bidding is crucial to ensure cost-effectiveness.

Small Business Impact

The contract was awarded to Raytheon Company, a large business, and there is no indication of small business participation. This represents a missed opportunity for small businesses to contribute to defense contracts.

Oversight & Accountability

The sole-source nature of this award warrants further oversight to ensure the pricing is justified and that future procurements are competed whenever possible to maximize value.

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 lacks competition
Potential for inflated pricing
Limited transparency on justification
No small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.3 million to RAYTHEON COMPANY. POLAND 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 $41.3 million.

What is the period of performance?

Start: 2022-10-31. End: 2026-02-28.

What is the specific justification for awarding this contract on a sole-source basis, and has a market research report been conducted to validate the necessity of this approach?

The provided data indicates the contract was 'NOT COMPETED,' suggesting a sole-source award. A thorough justification, typically documented in a Justification and Approval (J&A) document, would be required by federal acquisition regulations. This justification should detail why full and open competition is not feasible or would not be in the government's best interest, often citing unique capabilities or urgent needs. Without access to the J&A, it's impossible to confirm the specific rationale or if adequate market research was performed.

How does the per-unit cost of these navigation systems compare to industry benchmarks or previous similar contracts awarded competitively?

The data does not provide per-unit cost information, making a direct comparison impossible. However, given the sole-source nature of this $41.3 million contract, there is a heightened risk that the per-unit cost may be higher than if the contract had been subject to competitive bidding. Without benchmark data or prior competitive awards for these specific systems, assessing cost-effectiveness is challenging.

What measures are in place to ensure the effectiveness and performance of the navigation systems, given the lack of competitive pressure to drive quality?

While competition can drive quality, federal contracts typically include robust performance standards, quality assurance surveillance plans (QASPs), and acceptance criteria regardless of the procurement method. The contract type, 'FIRM FIXED PRICE,' also incentivizes the contractor to meet specifications efficiently. However, ongoing government oversight and rigorous testing are crucial to ensure the systems meet all performance requirements and operational needs.

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: $41,318,696

Exercised Options: $41,318,696

Current Obligation: $41,318,696

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