DoD awards $24M for M1 Abrams tank electronics, including thermal imaging and gyroscopes, with Raytheon Company as prime

Contract Overview

Contract Amount: $24,075,582 ($24.1M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2017-05-31

End Date: 2019-11-30

Contract Duration: 913 days

Daily Burn Rate: $26.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: VARIOUS ELECTRONIC ITEMS IN SUPPORT OF THE M1 ABRAMS TANK: 5855-01-540-4797 THERMAL IMAGING SYSTEM (QTY 46, 100% OPTION NOT EXERCISED AT TIME OF AWARD) 5855-01-593-8811 THERMAL SIGHT (QTY 9, 100% OPTION NOT EXERCISED AT TIME OF AWARD) 5855-01-538-5795 THERMAL SIGHT (QTY 15, 100% OPTION NOT EXERCISED AT TIME OF AWARD) 6615-01-469-7120 GYROSCOPE, RATE (QTY 86, 100% OPTION EXERCISED AT TIME OF AWARD) 5895-01-535-3047 DISPLAY ASSEMBLY (QTY 68, 100% OPTION EXERCISED AT TIME OF AWARD) 5998-01-542-1074 CIRCUIT CARD ASSEMBLY (QTY 53, PARTIAL OPTION EXERCISED AT TIME OF AWARD (11) 5962-01-575-4835 XILINX CHIPS (QTY 50, NO OPTION)

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75071

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $24.1 million to RAYTHEON COMPANY for work described as: VARIOUS ELECTRONIC ITEMS IN SUPPORT OF THE M1 ABRAMS TANK: 5855-01-540-4797 THERMAL IMAGING SYSTEM (QTY 46, 100% OPTION NOT EXERCISED AT TIME OF AWARD) 5855-01-593-8811 THERMAL SIGHT (QTY 9, 100% OPTION NOT EXERCISED AT TIME OF AWARD) 5855-01-538-5795 THERMAL SIGHT (QTY 15, 10… Key points: 1. The contract focuses on critical electronic components for the M1 Abrams tank, such as thermal imaging systems and gyroscopes. 2. Raytheon Company is the sole awardee, indicating a potential lack of broader market competition for these specific parts. 3. The contract includes a mix of options, with some exercised and others not, suggesting evolving needs or phased procurement. 4. The procurement falls under the Optical Instrument and Lens Manufacturing sector, highlighting specialized defense technology.

Value Assessment

Rating: fair

The total award amount is $24,075,581.89. Without specific unit pricing or historical data for these components, a direct comparison to similar contracts is difficult. The benchmark of $26,370 for the contract duration suggests a moderate level of spending.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was awarded as 'NOT COMPETED' to Raytheon Company, indicating a sole-source procurement. This method limits price discovery and may not leverage the most competitive pricing available in the market.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers if competitive bidding processes are not utilized, potentially resulting in less efficient use of public funds.

Public Impact

Ensures continued operational readiness of M1 Abrams tanks through the supply of essential electronic components. Supports the defense industrial base by contracting with a major defense contractor for specialized equipment. Potential for increased costs to taxpayers due to the lack of competitive bidding. Highlights the reliance on specific manufacturers for advanced military hardware.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
Potential for higher costs due to lack of competition.
Reliance on a single contractor for critical components.

Positive Signals

Procurement of essential components for a key military platform.
Contract awarded to a known defense contractor with established capabilities.

Sector Analysis

This contract falls within the Optical Instrument and Lens Manufacturing sector, specifically supporting the M1 Abrams tank. Spending in this niche defense sector is often characterized by high R&D costs and specialized manufacturing requirements, leading to higher unit prices compared to more commoditized goods.

Small Business Impact

The data indicates that small businesses were not involved in this specific contract award, as it was awarded to Raytheon Company. There is no indication of subcontracting opportunities for small businesses within this procurement.

Oversight & Accountability

The contract was awarded by the Department of Defense through the Defense Logistics Agency. Oversight would typically involve contract management, performance monitoring, and financial accountability measures to ensure the government receives the goods as specified and at a fair price, though the sole-source nature presents challenges for price oversight.

Related Government Programs

Optical Instrument and Lens Manufacturing
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Sole-source award.
Lack of competition.
Potential for inflated pricing.
Supply chain dependency on a single vendor.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.1 million to RAYTHEON COMPANY. VARIOUS ELECTRONIC ITEMS IN SUPPORT OF THE M1 ABRAMS TANK: 5855-01-540-4797 THERMAL IMAGING SYSTEM (QTY 46, 100% OPTION NOT EXERCISED AT TIME OF AWARD) 5855-01-593-8811 THERMAL SIGHT (QTY 9, 100% OPTION NOT EXERCISED AT TIME OF AWARD) 5855-01-538-5795 THERMAL SIGHT (QTY 15, 100% OPTION NOT EXERCISED AT TIME OF AWARD) 6615-01-469-7120 GYROSCOPE, RATE (QTY 86, 100% OPTION EXERCISED AT TIME OF AWARD) 5895-01-535-3047 DISPLAY ASSEMBLY (QTY 68, 100% OPTION EXERCISED AT TIME OF AWARD) 5998-01-54

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 $24.1 million.

What is the period of performance?

Start: 2017-05-31. End: 2019-11-30.

What is the justification for the sole-source award to Raytheon Company for these specific electronic components?

The justification for a sole-source award typically involves factors such as proprietary technology, unique capabilities, or the absence of other responsible sources capable of meeting the government's requirements. Without further details, it's difficult to ascertain the precise reason, but it suggests that Raytheon may hold exclusive rights or possess specialized knowledge essential for these M1 Abrams tank components.

How does the pricing of these components compare to industry benchmarks, given the sole-source nature of the award?

Assessing the value is challenging due to the sole-source award. Without competitive bids, it's difficult to determine if the price paid reflects fair market value. The contract benchmark of $26,370 suggests a moderate expenditure over its duration, but a true value assessment would require comparison with similar sole-source procurements or internal cost analyses by the DoD.

What are the potential risks associated with relying on a single supplier for these critical M1 Abrams tank electronic parts?

The primary risks include supply chain vulnerability, potential price escalation without competitive pressure, and limited options in case of supplier performance issues or disruptions. This sole-source dependency could impact the readiness of the M1 Abrams fleet if Raytheon faces production challenges or if the government seeks alternative solutions in the future.

Industry Classification

NAICS: Manufacturing › Commercial and Service Industry Machinery Manufacturing › Optical Instrument and Lens Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: SPRDL114R0161

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2501 W UNIVERSITY DR, MCKINNEY, TX, 75070

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: $46,179,382

Exercised Options: $24,075,582

Current Obligation: $24,075,582

Subaward Activity

Number of Subawards: 47

Total Subaward Amount: $20,754,714

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline