Raytheon Company awarded $52M contract for Commander's Viewer Unit, a sole-source acquisition

Contract Overview

Contract Amount: $52,018,560 ($52.0M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2022-06-06

End Date: 2024-12-31

Contract Duration: 939 days

Daily Burn Rate: $55.4K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: COMMANDER'S VIEWER UNIT

Place of Performance

Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $52.0 million to RAYTHEON COMPANY for work described as: COMMANDER'S VIEWER UNIT Key points: 1. This contract represents a significant investment in specialized defense equipment. 2. The sole-source nature of this award warrants scrutiny regarding price justification. 3. Performance is tied to a firm-fixed-price structure, indicating cost certainty for the government. 4. The duration of the contract suggests a long-term need for these units. 5. The award falls under the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' NAICS code. 6. This procurement is managed by the Defense Logistics Agency, a key support agency for the military.

Value Assessment

Rating: questionable

Without competitive bidding, it is difficult to benchmark the value for money. The firm-fixed-price contract provides cost certainty, but the absence of competition raises concerns about whether the government secured the best possible price. A comparison to similar systems or previous procurements of this specific unit would be necessary to assess pricing effectiveness. The total award amount of $52,018,560 over its period of performance suggests a substantial investment.

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 approach bypasses the standard competitive bidding process. While sole-source awards can be justified under specific circumstances (e.g., unique capabilities, urgent needs), they limit price discovery and potentially lead to higher costs for the government compared to a fully competed contract. The lack of multiple bidders means there was no direct price competition to drive down costs.

Taxpayer Impact: The absence of competition means taxpayers may not be receiving the most cost-effective solution. Without a competitive environment, there is less pressure on the contractor to offer the lowest possible price, potentially leading to overspending of public funds.

Public Impact

The primary beneficiaries are likely military units requiring the Commander's Viewer Unit for operational effectiveness. The contract delivers specialized equipment essential for navigation, detection, and guidance systems. The geographic impact is likely global, supporting deployed military forces. Workforce implications may include specialized manufacturing and technical support roles within Raytheon Company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and may result in higher costs.
Lack of transparency in the justification for sole-source procurement.
Potential for cost overruns if pricing is not rigorously justified.
Dependence on a single supplier for critical defense equipment.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award to an established defense contractor with likely proven capabilities.
Contract duration suggests a sustained need and potential for long-term support.
Procurement managed by the Defense Logistics Agency, indicating established procurement processes.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on the manufacturing of advanced electronic systems for military applications. The NAICS code 334511 covers a niche market for specialized instruments. Spending in this area is often driven by defense modernization efforts and the need for cutting-edge technology. Comparable spending benchmarks would typically involve other sole-source or limited-competition awards for similar complex defense systems, where pricing is often negotiated rather than determined by open market forces.

Small Business Impact

This contract does not appear to involve a small business set-aside, as the award is to Raytheon Company, a large defense contractor. There is no explicit information regarding subcontracting plans for small businesses within this specific award notice. The absence of a set-aside suggests that opportunities for small businesses may be limited unless they are part of Raytheon's broader supply chain for this contract. Further analysis would be needed to determine if subcontracting goals were established.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Logistics Agency (DLA) and potentially the Department of Defense's Inspector General, especially given the sole-source nature of the award. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver the specified goods at the agreed-upon price. Transparency is limited by the sole-source justification, but contract award details are publicly available. The DLA likely has internal review processes to ensure the necessity and justification of sole-source procurements.

Related Government Programs

Defense Logistics Agency Procurement
Military Navigation Systems
Aerospace and Defense Manufacturing
Sole-Source Defense Contracts
Commander's Viewer Systems

Risk Flags

Sole-source award
Lack of competitive justification
Potential for inflated pricing
Long-term reliance on a single vendor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $52.0 million to RAYTHEON COMPANY. COMMANDER'S VIEWER UNIT

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 $52.0 million.

What is the period of performance?

Start: 2022-06-06. End: 2024-12-31.

What is the specific justification for awarding this contract on a sole-source basis to Raytheon Company?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are awarded when only one responsible source can provide the required supplies or services, such as when there is a unique capability, a critical need that cannot be met through competition, or when follow-on work is required from the original source. Without the official justification document, it is impossible to ascertain the precise reasons. This lack of transparency is a common concern with sole-source procurements, as it limits the public's understanding of why competitive bidding was bypassed and potentially higher prices were accepted.

How does the $52 million award compare to historical spending on similar Commander's Viewer Units?

The provided data does not contain historical spending information for this specific contract or similar Commander's Viewer Units. To make a comparison, one would need to access historical contract databases and search for previous awards for the same or comparable systems. Factors such as inflation, technological advancements, and changes in military requirements would need to be considered when comparing past and present spending. The current award of $52,018,560 over a period of approximately 2.5 years (June 2022 to December 2024) represents a significant investment, but its value relative to historical spending remains unknown without further data.

What are the key performance metrics and deliverables associated with this contract?

The data indicates the contract is for a 'COMMANDER'S VIEWER UNIT' and is a 'DELIVERY ORDER' under a larger contract with a 'FIRM FIXED PRICE' type. However, specific performance metrics, technical specifications, and detailed deliverables are not provided in this data snippet. These would typically be outlined in the contract's statement of work (SOW) or performance work statement (PWS). Key deliverables would likely include the physical Commander's Viewer Units, along with any associated documentation, training, or support services. Performance would be measured against the technical requirements and delivery schedule outlined in the SOW.

What is Raytheon Company's track record with the Defense Logistics Agency and similar contracts?

Raytheon Company is a major defense contractor with a long history of supplying various systems and services to the Department of Defense, including the Defense Logistics Agency (DLA). While this specific data snippet doesn't detail their entire track record, Raytheon is known for producing advanced defense technologies, including sensors, communication systems, and avionics, which align with the NAICS code provided (334511). Their experience with the DLA likely involves numerous previous awards for logistics support and equipment provision. A comprehensive assessment would require reviewing their contract history with the DLA and other agencies for similar product categories to evaluate past performance, delivery timeliness, and quality.

Are there any identified risks associated with this sole-source contract, beyond the lack of competition?

Beyond the inherent risk of reduced price competition associated with sole-source awards, other potential risks could include vendor lock-in, where the government becomes overly reliant on Raytheon for future upgrades or maintenance, potentially at inflated prices. There's also the risk that without competitive pressure, innovation or responsiveness might be slower compared to a more competitive environment. Furthermore, the specific nature of the 'Commander's Viewer Unit' might involve proprietary technology or specialized manufacturing processes that could limit alternative sourcing options, thereby increasing risk if Raytheon faces production issues or financial instability. The long contract duration also presents a risk if the technology becomes obsolete or if requirements change significantly.

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: WEAPONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

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: $52,018,560

Exercised Options: $52,018,560

Current Obligation: $52,018,560

Subaward Activity

Number of Subawards: 37

Total Subaward Amount: $16,027,423

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