DoD Awards Raytheon $60M for Navigation Systems, Lacking Competition

Contract Overview

Contract Amount: $59,899,999 ($59.9M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2025-03-06

End Date: 2029-04-30

Contract Duration: 1,516 days

Daily Burn Rate: $39.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER SPRDL1-25-F-0084 ISSUED AGAINST SPRBL1-15-D-0017 FOR, 5998-01-468-9382 QTY 105, 5895-01-535-3047 QTY 490, 5977-01-543-0993 QTY 45, 6105-01-521-7889 QTY 12, 7025-01-542-3024 QTY 135 AND 1005-01-537-6902 QTY 79.

Place of Performance

Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $59.9 million to RAYTHEON COMPANY for work described as: DELIVERY ORDER SPRDL1-25-F-0084 ISSUED AGAINST SPRBL1-15-D-0017 FOR, 5998-01-468-9382 QTY 105, 5895-01-535-3047 QTY 490, 5977-01-543-0993 QTY 45, 6105-01-521-7889 QTY 12, 7025-01-542-3024 QTY 135 AND 1005-01-537-6902 QTY 79. Key points: 1. Significant award to Raytheon Company for critical defense systems. 2. Lack of competition raises concerns about potential overpricing and reduced innovation. 3. The contract spans over four years, indicating a long-term need for these components. 4. The sector is dominated by large prime contractors, limiting opportunities for smaller firms.

Value Assessment

Rating: questionable

The total award of $59,899,999 for a variety of navigation and guidance system components appears high given the lack of competitive bidding. Benchmarking against similar sole-source contracts would be necessary to confirm fair pricing.

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 potentially leads to higher costs for taxpayers as there is no market pressure to offer competitive pricing.

Taxpayer Impact: The absence of competition may result in taxpayers paying a premium for these essential defense components.

Public Impact

Ensures continued availability of critical navigation and guidance systems for military operations. Potential for increased costs due to sole-source procurement impacts overall defense budget allocation. Highlights reliance on a single large contractor for specialized defense equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source procurement
Lack of price competition
Long contract duration

Positive Signals

Award to established contractor
Addresses critical defense needs

Sector Analysis

This award falls within the Defense Logistics Agency's procurement of navigation, guidance, and control systems. Spending in this sector is substantial, often characterized by long-term contracts with a few major defense contractors.

Small Business Impact

The contract does not indicate any specific provisions for small business participation. Given the sole-source nature and the prime contractor, opportunities for small businesses are likely limited to subcontracting roles, if any.

Oversight & Accountability

The lack of competition warrants closer oversight to ensure the government is receiving fair value. The Defense Contract Audit Agency (DCAA) should scrutinize pricing to mitigate potential overruns.

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
Risk of vendor lock-in
Limited small business opportunities
Long contract duration may lead to obsolescence

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $59.9 million to RAYTHEON COMPANY. DELIVERY ORDER SPRDL1-25-F-0084 ISSUED AGAINST SPRBL1-15-D-0017 FOR, 5998-01-468-9382 QTY 105, 5895-01-535-3047 QTY 490, 5977-01-543-0993 QTY 45, 6105-01-521-7889 QTY 12, 7025-01-542-3024 QTY 135 AND 1005-01-537-6902 QTY 79.

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 $59.9 million.

What is the period of performance?

Start: 2025-03-06. End: 2029-04-30.

What is the justification for awarding this contract sole-source, and what steps were taken to ensure fair and reasonable pricing?

The justification for a sole-source award typically involves unique capabilities or urgent needs that only one contractor can meet. However, without detailed documentation, it's difficult to assess the validity of this claim. Steps to ensure fair pricing in sole-source situations often include detailed cost analysis, review of historical pricing, and negotiation with the contractor, but the effectiveness of these measures is unknown without further information.

What is the risk of technological obsolescence or vendor lock-in with a sole-source contract of this duration?

A sole-source contract of this duration, especially for technology-driven systems, carries a significant risk of technological obsolescence. The government may be locked into using older technology if the contractor does not innovate or if alternative solutions are not explored. Vendor lock-in is also a concern, as the government becomes dependent on Raytheon, potentially limiting future flexibility and competitive options.

How does this contract contribute to the overall effectiveness and readiness of the defense systems it supports?

This contract is crucial for maintaining the operational effectiveness and readiness of defense systems that rely on these specific navigation and guidance components. Ensuring a steady supply of these parts prevents potential mission degradation or delays. However, the sole-source nature raises questions about the long-term cost-effectiveness and potential for future upgrades compared to a more competitive procurement environment.

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: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

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: $59,899,999

Exercised Options: $59,899,999

Current Obligation: $59,899,999

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $1,639,647

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