DoD Awards Raytheon $5.2M for Circuit Card Assembly, Lacking Competition

Contract Overview

Contract Amount: $5,243,580 ($5.2M)

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: $5.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CIRCUIT CARD ASSEMBLY

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75071

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $5.2 million to RAYTHEON COMPANY for work described as: CIRCUIT CARD ASSEMBLY Key points: 1. Significant contract value for specialized electronic components. 2. Sole reliance on Raytheon Company raises competition concerns. 3. Potential for inflated costs due to lack of competitive bidding. 4. Sector: Defense Logistics Agency's need for critical hardware.

Value Assessment

Rating: questionable

The contract value of $5.24M for circuit card assembly appears high given the lack of competitive benchmarking. Without competing offers, it's difficult to ascertain if this price reflects fair market value compared to similar assemblies from other manufacturers.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Raytheon Company. This limits price discovery and may prevent the government from securing the best possible pricing through a competitive process.

Taxpayer Impact: The lack of competition could lead to taxpayers paying a premium for these circuit card assemblies, as there was no market pressure to drive down costs.

Public Impact

Ensures supply of critical electronic components for defense operations. Potential for increased defense spending due to non-competitive award. Highlights reliance on specific contractors for specialized parts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for overpricing

Positive Signals

Ensures supply chain for critical defense item
Fixed-price contract limits cost overrun risk

Sector Analysis

This contract falls within the defense electronics manufacturing sector, specifically for circuit card assemblies. Spending benchmarks in this area can vary widely based on complexity and volume, but competitive pricing is generally expected for standard components.

Small Business Impact

The data indicates no specific set-aside for small businesses, and the awardee is Raytheon Company, a large corporation. This suggests limited direct opportunity for small businesses on this particular contract.

Oversight & Accountability

The non-competitive nature of this award warrants further oversight to ensure the pricing is justified and that future requirements are competed where feasible to maximize value for taxpayers.

Related Government Programs

Bare Printed Circuit Board Manufacturing
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Sole-source award
Lack of competition
Potential for inflated pricing
Supply chain dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $5.2 million to RAYTHEON COMPANY. CIRCUIT CARD ASSEMBLY

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 $5.2 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 instead of competing it?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Without further details, it's difficult to assess the validity of this justification. However, the government should always explore competitive options first to ensure fair pricing and access to a broader range of solutions.

What are the potential risks associated with relying on a single supplier for critical defense components?

Relying on a single supplier for critical defense components poses significant risks, including supply chain vulnerability, potential price gouging, and lack of innovation. If the sole supplier faces production issues, geopolitical challenges, or decides to discontinue the product, the defense department could face severe shortages. This dependence also reduces leverage in price negotiations.

How can the Department of Defense ensure fair pricing and value for money in future sole-source procurements?

To ensure fair pricing and value in future sole-source procurements, the Department of Defense can employ robust cost analysis techniques, independent government cost estimates, and thorough market research to establish a reasonable price baseline. Engaging with industry experts and potentially using price negotiation strategies like should-cost analysis can also help. Furthermore, actively seeking opportunities to break down sole-source requirements into smaller, competitive packages is crucial.

Industry Classification

NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Bare Printed Circuit Board Manufacturing

Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: SPRHA423R0193

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: $5,243,580

Exercised Options: $5,243,580

Current Obligation: $5,243,580

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline