Raytheon Company awarded $33.9M contract for antenna elements, with limited competition impacting price discovery

Contract Overview

Contract Amount: $33,950,952 ($34.0M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2023-06-27

End Date: 2026-11-30

Contract Duration: 1,252 days

Daily Burn Rate: $27.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ANTENNA ELEMENT NSN: 5985-01-632-4902 MFR CAGE: 18876 MFR PART NUMBER: 11455763-2

Place of Performance

Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $34.0 million to RAYTHEON COMPANY for work described as: ANTENNA ELEMENT NSN: 5985-01-632-4902 MFR CAGE: 18876 MFR PART NUMBER: 11455763-2 Key points: 1. The contract value of $33.9 million for antenna elements represents a significant investment in defense logistics. 2. Limited competition for this contract raises questions about achieving optimal value for taxpayer funds. 3. The firm fixed-price contract type suggests a defined cost structure, but price discovery may be suboptimal. 4. The duration of over 1000 days indicates a long-term need for these critical defense components. 5. The contract is positioned within the broader defense electronics manufacturing sector, supporting navigation and guidance systems. 6. The absence of small business set-asides suggests a focus on large prime contractors for this specific procurement.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific unit cost data or comparable contract details. However, the $33.9 million award for antenna elements, particularly under a non-competed scenario, warrants scrutiny. While firm fixed-price contracts offer cost certainty, the lack of competitive bidding may have led to a higher price than could have been achieved through open market competition. Further analysis of the unit costs against industry benchmarks would be necessary to definitively assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in situations where urgency or specific technical requirements preclude open competition. The lack of competition limits the opportunity for price discovery and may result in higher costs for the government compared to a fully competed procurement.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the best possible price, as there was no competitive pressure to drive down costs. This can lead to less efficient use of public funds.

Public Impact

The primary beneficiaries are the Department of Defense and its various branches, ensuring the availability of critical components for defense systems. The services delivered include the manufacturing and supply of specialized antenna elements essential for search, detection, navigation, and guidance systems. The geographic impact is primarily within the United States, with Raytheon Company's operations likely centered in Massachusetts, where the contract was awarded. Workforce implications include employment opportunities within Raytheon and its supply chain, particularly in specialized manufacturing and engineering roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices.
Sole-source award limits transparency in pricing.
Long contract duration could mask inefficiencies if not actively managed.
Dependence on a single supplier for critical components poses a supply chain risk.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award to a known entity (Raytheon) suggests a level of established capability.
Contract supports critical defense systems, ensuring operational readiness.

Sector Analysis

The defense electronics manufacturing sector is a critical component of the national security industrial base. This contract falls under the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' subsector. The market is characterized by high barriers to entry due to specialized technology, stringent quality requirements, and long development cycles. Spending in this area is often driven by modernization programs and sustainment of existing platforms. Comparable spending benchmarks would typically involve analyzing other contracts for similar electronic components or systems within the Department of Defense.

Small Business Impact

This contract does not appear to have a small business set-aside (ss: false, sb: false). The award to Raytheon Company, a large defense contractor, suggests that the primary focus was on established capabilities rather than promoting small business participation. There is no explicit information regarding subcontracting plans for small businesses within the provided data, which could represent a missed opportunity to foster growth within the small business defense ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and procurement regulations, managed by the Defense Logistics Agency. Accountability measures are inherent in the firm fixed-price structure, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Logistics Agency Procurement
Raytheon Company Contracts
Antenna and Radar Systems
Navigation and Guidance Systems
Defense Electronics Manufacturing

Risk Flags

Sole-source award limits competition.
Potential for higher costs due to lack of competitive bidding.
Supply chain risk associated with single-source provider.
Limited transparency in pricing and negotiation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.0 million to RAYTHEON COMPANY. ANTENNA ELEMENT NSN: 5985-01-632-4902 MFR CAGE: 18876 MFR PART NUMBER: 11455763-2

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 $34.0 million.

What is the period of performance?

Start: 2023-06-27. End: 2026-11-30.

What is Raytheon Company's track record with the Department of Defense for similar antenna components?

Raytheon Company, now part of RTX Corporation, has a long and extensive history of supplying defense systems and components to the Department of Defense. They are a major prime contractor across various defense platforms, including radar, missile systems, and electronic warfare. While specific data on their track record for this exact antenna element is not provided, their overall profile suggests significant experience and capability in producing complex defense electronics. Historical performance data, including past delivery performance, quality metrics, and contract modifications on similar previous contracts, would be crucial for a comprehensive assessment. However, given their established position, it is likely they have fulfilled numerous similar requirements in the past, though the specifics of this particular contract's award justification (sole-source) might indicate unique circumstances or a lack of viable alternatives at the time of procurement.

How does the $33.9 million contract value compare to similar antenna element procurements by the DoD?

Direct comparison of the $33.9 million contract value for these specific antenna elements is difficult without access to detailed contract databases that allow for granular comparison of like-for-like items. The 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' NAICS code covers a broad range of products. Factors such as technological sophistication, material costs, production volume, and specific performance requirements heavily influence pricing. Given this is a sole-source award, it inherently bypasses the price discovery mechanism of competitive bidding, making direct value-for-money comparisons with potentially competed contracts problematic. To assess value, one would ideally benchmark the unit price against industry standards or analyze the cost breakdown provided by the contractor, if available, against historical data for similar components.

What are the primary risks associated with a sole-source award for critical defense components?

The primary risks associated with a sole-source award for critical defense components like these antenna elements are multifaceted. Firstly, there is a significant risk of paying a premium price due to the absence of competitive pressure, potentially leading to inefficient use of taxpayer funds. Secondly, it can foster complacency in the contractor, as there is no immediate threat of losing future business to competitors. Thirdly, it creates a dependency on a single supplier, which can be a vulnerability in the supply chain; if the sole-source provider experiences production issues, quality problems, or financial instability, it could directly impact defense readiness. Lastly, it reduces transparency in the procurement process, making it harder for oversight bodies to ensure fair pricing and optimal value.

What is the expected impact of this contract on the broader defense electronics market?

The impact of this specific $33.9 million contract on the broader defense electronics market is likely to be localized rather than transformative. As a sole-source award to Raytheon Company, it primarily reinforces their position as a key supplier within their niche. It signals continued demand for specialized antenna components essential for navigation and guidance systems, potentially encouraging investment in related technologies by other large players or specialized subcontractors. However, the lack of open competition means it does not actively stimulate broader market innovation or price reduction across the sector. Its main effect is ensuring a specific defense capability is met, rather than driving widespread market dynamics.

Are there any specific performance metrics or Key Performance Indicators (KPIs) associated with this contract?

The provided data does not explicitly detail specific performance metrics or Key Performance Indicators (KPIs) for this contract. However, as a firm fixed-price contract for manufactured goods, standard performance expectations would include adherence to delivery schedules (end date: 2026-11-30), meeting technical specifications outlined in the contract, and maintaining quality standards. The Defense Logistics Agency (DLA) typically has robust quality assurance processes and may conduct inspections or require certifications. While not listed as explicit KPIs in this summary, failure to meet these implicit requirements could lead to contract disputes, penalties, or rejection of goods. Further review of the full contract documentation would be necessary to identify any explicitly stated KPIs.

What is the historical spending trend for antenna elements or similar components by the Defense Logistics Agency?

Analyzing the historical spending trend for antenna elements or similar components by the Defense Logistics Agency (DLA) requires access to comprehensive historical contract databases. The DLA is responsible for providing logistics support to the U.S. Armed Forces, including the procurement of a vast array of parts and equipment. Spending on components like antenna elements is often tied to the lifecycle of military platforms (aircraft, ships, ground vehicles) and modernization efforts. Trends would likely show fluctuations based on defense budgets, specific program requirements, and geopolitical events. Without specific historical data for this NSN or related categories, it's difficult to pinpoint precise trends. However, consistent spending on such components is expected given the ongoing need to maintain and upgrade defense systems.

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: ELECTRICAL/ELECTRONIC EQPT COMPNTS

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: $33,950,952

Exercised Options: $33,950,952

Current Obligation: $33,950,952

Subaward Activity

Number of Subawards: 13

Total Subaward Amount: $2,784,253

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