Raytheon Awarded $41.7M for DC to DC Convertors by DoD, Lacking Competition
Contract Overview
Contract Amount: $41,716,245 ($41.7M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2019-12-11
End Date: 2022-12-30
Contract Duration: 1,115 days
Daily Burn Rate: $37.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: CONVERTOR DC TO DC,
Place of Performance
Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245
Plain-Language Summary
Department of Defense obligated $41.7 million to RAYTHEON COMPANY for work described as: CONVERTOR DC TO DC, Key points: 1. Significant contract value of $41.7 million for essential aircraft parts. 2. Sole-source award to Raytheon Company raises concerns about price discovery. 3. Lack of competition limits potential cost savings for taxpayers. 4. The Defense Logistics Agency's procurement highlights reliance on established contractors.
Value Assessment
Rating: questionable
The contract value of $41.7 million for DC to DC convertors appears high given the lack of competitive bidding. Without market comparison or multiple offers, it's difficult to assess if this price is optimal or if it reflects a premium due to the sole-source nature.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor, Raytheon Company, was solicited. This significantly limits price discovery and competition, potentially leading to higher costs than if multiple vendors had bid.
Taxpayer Impact: The absence of competition in this $41.7 million award means taxpayers may not be receiving the best possible price for these critical aircraft parts.
Public Impact
Ensures continued availability of critical aircraft components for the Department of Defense. Supports a major defense contractor, potentially impacting jobs and the defense industrial base. Highlights the ongoing need for specialized parts in military aviation maintenance and operations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for overpricing
Positive Signals
- Ensures supply of critical component
- Award to established contractor
Sector Analysis
This procurement falls within the "Other Aircraft Parts and Auxiliary Equipment Manufacturing" sector, a critical component of the aerospace and defense industry. Spending in this area is often characterized by high technical requirements and long-standing relationships with specialized manufacturers.
Small Business Impact
The award to Raytheon Company, a large defense contractor, does not appear to involve small businesses directly. There is no indication of subcontracting opportunities for small businesses within this specific contract data.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny from oversight bodies to ensure the government received fair value. Further investigation into the justification for not competing the award would be beneficial.
Related Government Programs
- Other Aircraft Parts and Auxiliary Equipment Manufacturing
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- Sole-source award lacks transparency.
- Potential for inflated pricing due to lack of competition.
- Limited opportunity for small business participation.
- Dependency on a single supplier for critical components.
Tags
other-aircraft-parts-and-auxiliary-equip, department-of-defense, ca, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $41.7 million to RAYTHEON COMPANY. CONVERTOR DC TO DC,
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 $41.7 million.
What is the period of performance?
Start: 2019-12-11. End: 2022-12-30.
What is the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?
The justification for a sole-source award typically involves factors such as unique capabilities, proprietary technology, urgent need, or lack of adequate competition. Without specific documentation, it's impossible to determine the exact reason. However, the absence of competition raises concerns about whether alternative, potentially more cost-effective solutions were overlooked.
How does the unit cost of these DC to DC convertors compare to similar components in the market?
Benchmarking the unit cost is challenging without access to Raytheon's pricing structure or comparable market data for identical or similar convertors. Given the sole-source nature, the price may not reflect competitive market rates. A thorough cost analysis or comparison with commercially available equivalents would be necessary to assess value.
What is the long-term impact of relying on sole-source contracts for critical aircraft parts?
Long-term reliance on sole-source contracts can stifle innovation, reduce competition, and potentially lead to inflated prices. It can also create vendor lock-in, making it difficult to switch suppliers even if better options emerge. This practice may hinder the government's ability to achieve cost efficiencies and leverage market dynamics.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: SPRPA119QX158
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: RTX Corp
Address: 2000 E EL SEGUNDO BLVD, EL SEGUNDO, CA, 90245
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: $41,716,245
Exercised Options: $41,716,245
Current Obligation: $41,716,245
Subaward Activity
Number of Subawards: 63
Total Subaward Amount: $11,811,556
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SPRPA117GC301
IDV Type: BOA
Timeline
Start Date: 2019-12-11
Current End Date: 2022-12-30
Potential End Date: 2022-12-30 00:00:00
Last Modified: 2023-03-10
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