Raytheon Company awarded $98.7M for COVER ASSY,FNT BALL, with limited competition and a long performance period

Contract Overview

Contract Amount: $98,710,821 ($98.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2020-03-26

End Date: 2024-08-31

Contract Duration: 1,619 days

Daily Burn Rate: $61.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: COVER ASSY,FNT BALL

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75071

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $98.7 million to RAYTHEON COMPANY for work described as: COVER ASSY,FNT BALL Key points: 1. Contract value of $98.7M over a 4-year period suggests a significant investment in critical defense components. 2. The 'NOT COMPETED' status raises questions about potential price efficiencies and the availability of alternative suppliers. 3. A firm-fixed-price contract type generally shifts risk to the contractor, which can be beneficial for the government if priced appropriately. 4. The contract's duration, spanning over 1600 days, indicates a long-term need for these specific components. 5. The North American Industry Classification System (NAICS) code 334511 points to a specialized manufacturing sector for search, detection, and navigation systems. 6. The award to a single, large contractor like Raytheon Company may limit opportunities for smaller, innovative firms in this niche.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the 'COVER ASSY,FNT BALL' components and their market rates. However, a $98.7 million award over four years for specialized defense equipment suggests a substantial investment. The lack of competition means there's no direct market comparison to assess if the pricing is optimal. Further analysis would require understanding the unit costs and comparing them to similar systems or historical pricing for this contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'NOT COMPETED' basis, indicating that a full and open competition was not conducted. This typically occurs when only one source is capable of meeting the government's needs, often due to proprietary technology, unique capabilities, or urgent requirements. The lack of multiple bidders means there was no direct price negotiation or comparison among potential suppliers, which could lead to less favorable pricing for the government.

Taxpayer Impact: The absence of competition means taxpayers may not be benefiting from the most cost-effective solution available. Without a competitive bidding process, there's a risk that the price paid is higher than it would be in a more open market.

Public Impact

The Department of Defense is the primary beneficiary, receiving critical components for its search, detection, navigation, guidance, aeronautical, and nautical systems. This contract supports the operational readiness and technological advancement of military platforms. The services delivered are the manufacturing and supply of specialized 'COVER ASSY,FNT BALL' components. The contract is being performed in Texas (TX), indicating a geographic concentration of this defense manufacturing activity. The award likely supports a specialized segment of the defense manufacturing workforce employed by Raytheon Company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs for taxpayers.
Sole-source awards can stifle innovation by limiting market entry for other potential suppliers.
Long contract duration without re-competition could lead to complacency in cost management.
Limited transparency into the justification for sole-sourcing could mask inefficiencies.

Positive Signals

Firm-fixed-price contract shifts cost overrun risk to the contractor.
Award to a known entity (Raytheon) suggests a reliance on established capabilities and potentially reduced technical risk.
Long performance period indicates a stable, long-term need for the product, ensuring supply chain continuity.

Sector Analysis

The contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector, classified under NAICS code 334511. This is a highly specialized segment of the defense industrial base, often characterized by high barriers to entry due to complex technology, intellectual property, and stringent quality requirements. Spending in this sector is driven by defense modernization efforts and the need for advanced sensing and navigation capabilities across various military platforms. Comparable spending benchmarks would typically involve other contracts for similar complex electronic and guidance systems within the defense industry.

Small Business Impact

This contract does not appear to involve a small business set-aside, as indicated by 'sb': false. The award is to a large prime contractor, Raytheon Company. There is no explicit information provided regarding subcontracting plans for small businesses. Without such details, it's difficult to assess the direct impact on the small business ecosystem, though large prime contracts often include subcontracting requirements that can benefit small and medium-sized enterprises.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Defense and the Defense Logistics Agency. As a sole-source award, the justification for not competing would be subject to review. Accountability measures would include contract performance monitoring, quality assurance checks, and adherence to the firm-fixed-price terms. Transparency is limited due to the non-competitive nature, but contract award data is publicly available. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse.

Related Government Programs

Defense Logistics Agency Procurement
Raytheon Company Contracts
Navigation and Guidance Systems
Aeronautical and Nautical Instruments
Defense Manufacturing

Risk Flags

Sole-source award lacks competitive pricing.
Long contract duration without re-competition.
Limited public information on specific component details.
Potential for contractor lock-in.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $98.7 million to RAYTHEON COMPANY. COVER ASSY,FNT BALL

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 $98.7 million.

What is the period of performance?

Start: 2020-03-26. End: 2024-08-31.

What is the specific nature of the 'COVER ASSY,FNT BALL' and why was it deemed suitable for a sole-source award?

The specific nature of 'COVER ASSY,FNT BALL' refers to a component assembly likely used in defense systems for protection or functionality, possibly related to a 'front ball' or a specific type of sensor/emitter. The justification for a sole-source award typically stems from unique technical requirements, proprietary technology held by a single manufacturer, or critical operational needs where only one contractor can meet the specifications within the required timeframe. Without access to the specific contract documentation detailing the justification (e.g., Justification and Approval - J&A), it's impossible to definitively state the precise reasons. However, in the defense sector, such awards are often linked to specialized, high-technology items where R&D investment or existing system integration makes alternative sourcing impractical or prohibitively expensive.

How does the $98.7 million contract value compare to similar procurements for navigation and guidance systems?

Comparing the $98.7 million contract value requires understanding the scope and complexity of the 'COVER ASSY,FNT BALL'. If these are highly specialized, mission-critical components for advanced platforms, the value might be within the expected range for such systems. However, without detailed specifications or unit costs, a direct comparison is difficult. Generally, procurements for complex electronic systems, including navigation and guidance, can range from tens of millions to billions of dollars depending on the quantity, technological sophistication, and integration requirements. The fact that this is a sole-source award means there's no direct competitive benchmark to assess if this price is optimal. Historical data on Raytheon's similar contracts or industry benchmarks for comparable components would be needed for a more robust comparison.

What are the primary risks associated with a sole-source contract of this magnitude and duration?

The primary risks associated with a sole-source contract of this magnitude ($98.7M) and duration (over 4 years) include potential overpricing due to the lack of competition, reduced incentive for the contractor to innovate or improve efficiency, and a lack of market pressure to offer the best value. Taxpayers may end up paying more than necessary. Furthermore, reliance on a single supplier can create vulnerabilities in the supply chain if the contractor faces production issues, financial instability, or geopolitical challenges. There's also a risk that the government becomes locked into a specific technology or vendor, making future transitions more difficult and costly. The long duration exacerbates these risks by extending the period of potential inefficiency or vulnerability.

What performance metrics or oversight mechanisms are likely in place to ensure Raytheon Company delivers effectively?

For a contract of this nature, the Department of Defense and the Defense Logistics Agency would typically implement robust oversight mechanisms. These would likely include detailed performance work statements (PWS) outlining specific deliverables, quality standards, and delivery schedules. Key performance indicators (KPIs) related to on-time delivery, defect rates, and technical compliance would be tracked. Regular progress reviews, site visits, and audits by government quality assurance representatives (QARs) are standard. The firm-fixed-price nature incentivizes Raytheon to meet these requirements to avoid financial penalties or contract breaches. Any significant deviations or failures to meet performance standards could lead to corrective actions, contract modifications, or even termination.

How does this contract fit into the broader context of US defense spending on navigation and guidance systems?

This contract represents a specific investment within the larger category of defense spending on navigation, guidance, and control systems. These systems are critical for the effective operation of a wide array of military assets, including aircraft, missiles, ships, and ground vehicles. The total US defense budget allocates significant funds to research, development, procurement, and sustainment of such technologies. Contracts like this, even if sole-sourced, reflect the ongoing need to maintain and modernize these capabilities, often involving proprietary technologies developed over years. The value of this $98.7M award, while substantial, is likely a fraction of the overall annual spending in this broad defense sub-sector, which can easily run into billions of dollars annually across all branches of the military.

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: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: SPRPA118RX392

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

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: $123,213,765

Exercised Options: $123,211,265

Current Obligation: $98,710,821

Subaward Activity

Number of Subawards: 101

Total Subaward Amount: $46,211,837

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