Raytheon Company awarded $32.2M for camera and sensor assemblies, with 100% option exercised at award

Contract Overview

Contract Amount: $32,248,578 ($32.2M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2020-09-24

End Date: 2024-02-28

Contract Duration: 1,252 days

Daily Burn Rate: $25.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CAMERA, TELEVISION NSN: 5820-01-469-7889 P/N: 3225863-1 QTY: 79, 100% OPTION EXERCISED AT THE TIME OF AWARD SENSOR ASSEMBLY UNIT NSN: 5865-01-535-3046 P/N: 13007314 QTY: 40, 100% OPTION EXERCISED AT THE TIME OF AWARD

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75071

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $32.2 million to RAYTHEON COMPANY for work described as: CAMERA, TELEVISION NSN: 5820-01-469-7889 P/N: 3225863-1 QTY: 79, 100% OPTION EXERCISED AT THE TIME OF AWARD SENSOR ASSEMBLY UNIT NSN: 5865-01-535-3046 P/N: 13007314 QTY: 40, 100% OPTION EXERCISED AT THE TIME OF AWARD Key points: 1. Contract awarded to a single, large defense contractor, indicating potential for limited competition. 2. The contract's duration of 1252 days suggests a long-term need for these specialized components. 3. 100% option exercise at award may limit future opportunities for competitive bidding on follow-on work. 4. The firm-fixed-price structure aims to transfer risk to the contractor, but requires careful monitoring of performance. 5. Awarded by the Defense Logistics Agency, this contract supports the broader Department of Defense's equipment needs. 6. The specific NSNs point to highly specialized electronic components, likely for advanced defense systems.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without detailed cost breakdowns or comparable contract data. The firm-fixed-price nature suggests an agreed-upon value, but the lack of competition raises questions about whether the government secured the best possible price. The long duration and 100% option exercise at award could indicate a stable, but potentially less cost-optimized, procurement strategy.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one responsible source can provide the required supplies or services. The lack of competition means that price discovery through market forces was absent, and the government relied on negotiation to establish the contract price.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as competitive pressures are removed. It also limits opportunities for new or smaller businesses to enter the market for these specific components.

Public Impact

The Department of Defense benefits from the acquisition of critical camera and sensor assemblies for its operational needs. These components are likely integral to various defense systems, contributing to national security. The contract supports advanced manufacturing and technology within the defense industrial base. Personnel involved in the production and integration of these assemblies are indirectly impacted.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs for taxpayers.
Sole-source award limits opportunities for other qualified vendors.
Long contract duration could lead to price increases if market conditions change significantly.

Positive Signals

Award to a reputable contractor like Raytheon suggests a focus on reliability and quality.
Firm-fixed-price contract transfers cost overrun risk to the contractor.
100% option exercise at award ensures continuity of supply for critical components.

Sector Analysis

This contract falls within the Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing sector (NAICS 334220). This sector is characterized by the production of electronic equipment used for communication and broadcasting. Within the defense industry, such components are vital for intelligence, surveillance, reconnaissance, and communication systems. Comparable spending benchmarks are difficult to ascertain without more specific details on the technology and application, but defense electronics represent a significant portion of the overall defense procurement budget.

Small Business Impact

The data indicates this contract was not set aside for small businesses, and the prime contractor is a large corporation. There is no explicit information on subcontracting plans for small businesses. Without a small business set-aside or specific subcontracting goals, the direct impact on the small business ecosystem for this particular award is likely minimal, though the prime contractor may engage small businesses in its supply chain.

Oversight & Accountability

The Defense Logistics Agency, as the awarding agency, is responsible for oversight. The contract type (firm-fixed-price) implies performance standards that the contractor must meet. Transparency is facilitated by contract databases, but detailed cost and performance data may be proprietary. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Procurement
Defense Logistics Agency Contracts
Electronic Equipment Manufacturing
Surveillance and Reconnaissance Systems
National Defense Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for price inflation
Limited market access for other vendors

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.2 million to RAYTHEON COMPANY. CAMERA, TELEVISION NSN: 5820-01-469-7889 P/N: 3225863-1 QTY: 79, 100% OPTION EXERCISED AT THE TIME OF AWARD SENSOR ASSEMBLY UNIT NSN: 5865-01-535-3046 P/N: 13007314 QTY: 40, 100% OPTION EXERCISED AT THE TIME OF AWARD

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 $32.2 million.

What is the period of performance?

Start: 2020-09-24. End: 2024-02-28.

What is the specific function and technological sophistication of the camera and sensor assemblies procured under this contract?

The provided data lists National Stock Numbers (NSNs) and part numbers (P/N) for 'CAMERA, TELEVISION' and 'SENSOR ASSEMBLY UNIT'. While the NSNs (5820-01-469-7889 and 5865-01-535-3046) and part numbers (3225863-1 and 13007314) identify the specific items, they do not detail their exact technological capabilities. Given the award to Raytheon Company and the Department of Defense as the end-user, it is highly probable these are advanced, specialized components designed for demanding military applications, potentially including high-resolution imaging, multi-spectral sensing, or integration into complex electronic warfare or intelligence systems. Further research into the NSNs would be required to ascertain precise specifications and technological advancements.

How does the unit price of these components compare to similar items procured by the government or in the commercial market?

The total contract value is $32,248,578.46 for 79 camera assemblies and 40 sensor assemblies. This yields a blended average unit price of approximately $32,248,578.46 / (79 + 40) = $271,000 per unit. However, it's crucial to note that these are distinct items. The average price per camera assembly is $32,248,578.46 / 79 = $408,209.85, and per sensor assembly is $32,248,578.46 / 40 = $806,214.46. Without specific technical specifications and direct comparisons to identical or highly similar NSNs or part numbers from other contracts, a precise value-for-money assessment is difficult. Given the sole-source nature and likely advanced military application, these unit prices may be within a reasonable range for specialized defense hardware, but a definitive benchmark requires more granular data.

What are the potential risks associated with a sole-source award for critical defense components?

A sole-source award for critical defense components carries several risks. Primarily, the absence of competition can lead to inflated prices, as the government lacks the leverage of multiple bids to drive down costs. This can result in a suboptimal use of taxpayer funds. Secondly, it limits the government's access to potentially innovative solutions or alternative technologies that other vendors might offer. Dependence on a single supplier can also create supply chain vulnerabilities; if the sole-source provider experiences production issues, delays, or financial instability, the government's access to essential equipment could be jeopardized. Furthermore, it can stifle competition and innovation within the broader defense industrial base by creating barriers to entry for other qualified manufacturers.

What is the historical spending pattern for these specific NSNs or similar components by the Defense Logistics Agency or the Department of Defense?

The provided data indicates this contract was awarded on September 24, 2020, with an end date of February 28, 2024, and included a 100% option exercised at the time of award. This suggests a continuous procurement of these items over this period. To assess historical spending patterns, one would need to query contract databases for previous awards of these specific NSNs (5820-01-469-7889 and 5865-01-535-3046) or functionally equivalent items by the DLA or DoD. A review of past contracts would reveal the volume, pricing trends, and awarding agencies over time. A significant increase in quantity or price in this award compared to historical data might warrant further investigation into the reasons, such as increased demand, technological upgrades, or market shifts.

What is Raytheon Company's track record in fulfilling similar defense contracts, particularly those involving sole-source awards?

Raytheon Company (now RTX) is a major defense contractor with a long history of supplying complex systems and components to the U.S. military and allied nations. Their track record generally includes successful delivery of sophisticated technologies. However, like any large defense prime, they are involved in numerous contracts, some of which may be sole-source due to the specialized nature of the technology or program requirements. Assessing their specific track record on sole-source awards for camera and sensor assemblies would require examining past performance evaluations (e.g., CPARS reports) and contract histories for similar items. While Raytheon is a reputable entity, the inherent risks of sole-source procurement remain, regardless of the contractor's general performance.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: SPRDL117R0422

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 2501 W UNIVERSITY DR, MCKINNEY, TX, 75071

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: $32,248,578

Exercised Options: $32,248,578

Current Obligation: $32,248,578

Subaward Activity

Number of Subawards: 25

Total Subaward Amount: $3,091,005

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline