DoD Awards Raytheon $5.6M for Aircraft Parts, Lacking Competition

Contract Overview

Contract Amount: $5,685,333 ($5.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2023-09-28

End Date: 2026-05-01

Contract Duration: 946 days

Daily Burn Rate: $6.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CHASSIS

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75071

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $5.7 million to RAYTHEON COMPANY for work described as: CHASSIS Key points: 1. Significant award to Raytheon for aircraft parts. 2. Lack of competition raises concerns about potential overpricing. 3. Contract duration extends over two years. 4. Small business participation is not indicated.

Value Assessment

Rating: questionable

The contract value of $5.68 million for 'Other Aircraft Parts' is difficult to benchmark without specific item details. However, the absence of competition suggests potential for less favorable pricing compared to a competitive environment.

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 result in higher costs for the government.

Taxpayer Impact: Taxpayer funds are being spent without the benefit of competitive bidding, potentially leading to a less efficient use of resources.

Public Impact

Ensures supply of critical aircraft parts for the Department of Defense. Potential for higher costs due to lack of competitive pressure. Limited visibility into the specific components being procured.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for inflated pricing
Long contract duration

Positive Signals

Award to a known defense contractor
Addresses a specific defense need

Sector Analysis

This contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector. Spending in this area is critical for defense readiness, but competitive procurement is key to cost efficiency.

Small Business Impact

There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. This represents a missed opportunity for small business participation.

Oversight & Accountability

The 'NOT COMPETED' status suggests a lack of robust oversight in the initial procurement phase. Further review is needed to understand the justification for the sole-source award.

Related Government Programs

Other Aircraft Parts and Auxiliary Equipment Manufacturing
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Sole-source award
Potential for price gouging
Lack of small business inclusion
Limited transparency on justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $5.7 million to RAYTHEON COMPANY. CHASSIS

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 $5.7 million.

What is the period of performance?

Start: 2023-09-28. End: 2026-05-01.

What is the justification for awarding this contract on a sole-source basis?

The justification for a sole-source award typically involves factors such as unique capabilities, urgent need, or lack of available sources. Without further documentation, it's unclear if these criteria were met, raising questions about whether a competitive process could have yielded better value or if specific national security concerns necessitated this approach.

What is the estimated cost savings if this contract had been competed?

Estimating cost savings from a non-competed contract is challenging without detailed market research and a competitive bidding process. However, studies consistently show that competitive procurements can yield savings of 10-30% or more compared to sole-source awards, suggesting significant potential savings for taxpayers in this case.

How will the Defense Logistics Agency ensure fair pricing throughout the contract's duration?

Given the sole-source nature, the DLA should implement rigorous price analysis techniques, potentially including cost realism analyses and benchmarking against similar unclassified contracts. Regular reviews and audits will be crucial to monitor expenditures and ensure that the firm fixed price remains fair and reasonable over the contract's term.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: SPRHA423R0182

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

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: $5,685,333

Exercised Options: $5,685,333

Current Obligation: $5,685,333

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $702,487

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline