DoD awards Raytheon $53.5M for 60 units of electronic components, with no competition
Contract Overview
Contract Amount: $53,474,837 ($53.5M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2018-09-14
End Date: 2023-07-31
Contract Duration: 1,781 days
Daily Burn Rate: $30.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 60 UNITS EACH OF PART# 11472532-1
Place of Performance
Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810
Plain-Language Summary
Department of Defense obligated $53.5 million to RAYTHEON COMPANY for work described as: 60 UNITS EACH OF PART# 11472532-1 Key points: 1. High unit cost suggests potential overpricing or specialized nature of components. 2. Lack of competition raises concerns about price discovery and taxpayer value. 3. Long contract duration (1781 days) may indicate complex supply chain or demand. 4. Sector is 'Other Electronic Component Manufacturing', a critical but often opaque area.
Value Assessment
Rating: questionable
The average unit price is approximately $891,247. Without comparable contract data or detailed specifications, it's difficult to definitively assess if this price is reasonable. However, for electronic components, this appears exceptionally high.
Cost Per Unit: $891,247
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source or limited competition award. This significantly limits price discovery and potentially leads to higher costs for the government compared to a competitive environment.
Taxpayer Impact: The absence of competition means taxpayers may be paying a premium for these components, as there was no market pressure to drive down prices.
Public Impact
Defense readiness may be impacted if these components are critical and expensive. Taxpayers bear the cost of a non-competitive procurement, potentially funding inflated prices. Lack of transparency in pricing for specialized electronic components hinders public trust.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of Competition
- High Unit Cost
- Sole-Source Award
Positive Signals
- Definitive Contract Awarded
- Long-Term Supply Secured
Sector Analysis
This contract falls under 'Other Electronic Component Manufacturing' within the Defense sector. Spending in this area is crucial for military technology but can be prone to high costs due to specialized requirements and limited suppliers.
Small Business Impact
The contract was awarded to Raytheon Company, a large defense contractor. There is no indication that small businesses were involved in this specific procurement, either as prime contractors or subcontractors.
Oversight & Accountability
The contract is a definitive contract, suggesting a more structured oversight process than a simpler agreement. However, the lack of competition warrants close scrutiny by oversight bodies to ensure fair pricing.
Related Government Programs
- Other Electronic Component Manufacturing
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- High Unit Cost
- Lack of Competition
- Sole-Source Award
- Potential for Overpricing
- Limited Small Business Participation
Tags
other-electronic-component-manufacturing, department-of-defense, ma, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $53.5 million to RAYTHEON COMPANY. 60 UNITS EACH OF PART# 11472532-1
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 $53.5 million.
What is the period of performance?
Start: 2018-09-14. End: 2023-07-31.
What specific technical requirements justify the exceptionally high per-unit cost of these electronic components?
The high per-unit cost of $891,247 suggests these are not standard electronic components. They likely possess highly specialized functionalities, extreme durability requirements (e.g., radiation hardening, extreme temperature tolerance), or are custom-designed for a specific, advanced military system. Further technical documentation or a justification for sole-source procurement would be needed to fully understand the cost drivers.
What steps can the DoD take to ensure better price competition for similar specialized electronic components in the future?
The DoD could explore strategies like market research to identify potential new suppliers, investing in technology insertion to create more standardized parts, or using longer-term, broader solicitations that encourage innovation and economies of scale. Developing clearer specifications that allow for multiple vendors to compete, even on specialized items, is also crucial.
How does the long contract duration (1781 days) impact the government's ability to adapt to technological advancements or changing needs?
A long contract duration like 1781 days can lock the government into specific technology or suppliers, potentially hindering its ability to adopt newer, more effective, or cost-efficient solutions that emerge during the contract period. While it ensures supply stability, it reduces flexibility and could lead to obsolescence if not managed carefully with appropriate review and modification clauses.
Industry Classification
NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Other Electronic Component Manufacturing
Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: SPRRA218R0008
Offers Received: 1
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: $53,474,837
Exercised Options: $53,474,837
Current Obligation: $53,474,837
Actual Outlays: $25,213,412
Subaward Activity
Number of Subawards: 54
Total Subaward Amount: $151,872,801
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2018-09-14
Current End Date: 2023-07-31
Potential End Date: 2023-07-31 00:00:00
Last Modified: 2024-09-09
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