Raytheon Company awarded $48.7M for Naval Aviation support, with contract performance spanning over three years

Contract Overview

Contract Amount: $48,703,288 ($48.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2009-07-29

End Date: 2013-02-28

Contract Duration: 1,310 days

Daily Burn Rate: $37.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NAVAL AVIATION

Place of Performance

Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $48.7 million to RAYTHEON COMPANY for work described as: NAVAL AVIATION Key points: 1. Contract value appears reasonable given the duration and scope of naval aviation support. 2. The sole-source nature of this award limits opportunities for competitive pricing. 3. Performance dates suggest a mature contract with potential for cost efficiencies. 4. This contract falls within the broader Defense sector, supporting critical aviation readiness. 5. The firm-fixed-price structure shifts cost risk to the contractor. 6. No small business set-aside was utilized, indicating potential for prime contractor reliance on large subcontractors.

Value Assessment

Rating: fair

Benchmarking this contract's value is challenging without specific service details. However, the total award of $48.7 million over approximately 3.3 years averages to roughly $14.7 million annually. This figure needs to be compared against similar naval aviation support contracts to determine true value for money. The firm-fixed-price contract type suggests that the contractor bears the risk of cost overruns, which can be a positive indicator if managed effectively.

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 a competitive process. The lack of competition means that the government did not benefit from the price discovery mechanisms inherent in a competitive bidding environment.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as there is no competitive pressure to drive down costs. This necessitates robust government oversight to ensure fair pricing.

Public Impact

Naval aviation personnel and operations benefit from the sustained support provided. Services likely include maintenance, repair, or logistical support for naval aircraft. The geographic impact is primarily tied to naval aviation bases and operational areas. Workforce implications may involve specialized technical personnel required for aviation support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the sole-source justification could mask underlying issues.
Contract duration of over three years without re-competition may reduce incentive for cost optimization.
Absence of small business participation raises concerns about broader economic impact.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor.
Long-term contract provides stability for naval aviation support operations.
Specific NAICS code (334413) suggests a focus on potentially specialized manufacturing or support.

Sector Analysis

This contract falls within the broader Defense Industrial Base, specifically supporting naval aviation. The semiconductor and related device manufacturing sector (NAICS 334413) is critical for modern defense systems. While the contract value is substantial, it represents a portion of the overall defense spending on aviation readiness and sustainment. Comparable spending benchmarks would involve analyzing other contracts for similar aviation support services or component manufacturing within the Department of Defense.

Small Business Impact

The contract was not set aside for small businesses, and the 'sb' field is false, indicating no explicit small business participation requirement was noted. This suggests that the prime contractor, Raytheon Company, is expected to fulfill the contract requirements, potentially utilizing its own resources or subcontracting to other large businesses. There is no direct indication of subcontracting opportunities for small businesses within the provided data.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. Accountability measures are inherent in the firm-fixed-price contract type, which places cost responsibility on the contractor. Transparency is limited due to the sole-source nature of the award, but contract modifications and performance reports would be subject to internal government review and potentially Freedom of Information Act requests.

Related Government Programs

Naval Air Systems Command (NAVAIR) Contracts
Defense Logistics Agency (DLA) Aviation Support
Department of Defense Aircraft Maintenance Contracts
Raytheon Company Defense Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for price inflation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $48.7 million to RAYTHEON COMPANY. NAVAL AVIATION

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $48.7 million.

What is the period of performance?

Start: 2009-07-29. End: 2013-02-28.

What specific naval aviation systems or components does this contract support?

The provided data indicates the contract is related to 'NAVAL AVIATION' and falls under NAICS code 334413, 'Semiconductor and Related Device Manufacturing'. This suggests the contract likely involves the production, repair, or support of semiconductor components or related devices essential for naval aircraft systems. Without more specific contract line item numbers (CLINs) or a detailed statement of work, it is difficult to pinpoint the exact systems. However, semiconductors are fundamental to avionics, communication, navigation, and weapons systems on modern naval aircraft.

How does the $48.7 million award compare to historical spending on similar naval aviation support contracts?

Comparing this $48.7 million award requires access to historical contract databases and filtering for similar services (e.g., semiconductor support for naval aviation) and contract types (firm-fixed-price, sole-source) awarded by the Department of Defense. Given the contract duration of approximately 3.3 years (1310 days), the annual average is around $14.7 million. This figure needs to be benchmarked against other contracts of similar scope and duration. Without specific comparative data, it's challenging to definitively state if this represents high or low spending. However, sole-source awards often tend to be at the higher end of the potential price spectrum due to the lack of competitive pressure.

What are the primary risks associated with a sole-source award for naval aviation support?

The primary risks associated with a sole-source award for naval aviation support include potential overpricing due to the absence of competitive bidding, reduced incentive for the contractor to innovate or improve efficiency, and a lack of transparency in the procurement process. Taxpayers may bear a higher cost than if the contract had been competed. Furthermore, reliance on a single source can create vulnerabilities if that source experiences production issues, financial instability, or changes its business strategy. Ensuring fair pricing and adequate performance monitoring becomes even more critical in sole-source situations.

What is the track record of Raytheon Company in fulfilling similar defense contracts?

Raytheon Company (now RTX) has a long and extensive track record of fulfilling complex defense contracts for the U.S. Department of Defense and allied nations. They are a major defense contractor with significant expertise in areas such as aerospace, defense, and cybersecurity, including capabilities relevant to naval aviation and semiconductor manufacturing. While specific performance metrics for this particular contract are not detailed in the provided data, Raytheon's overall history suggests a capacity to deliver on large-scale, technologically advanced projects. However, like any large contractor, they may have experienced performance issues on specific contracts, which would require deeper investigation into contract performance reports and award histories.

How does the firm-fixed-price (FFP) contract type impact cost control and risk for this naval aviation contract?

The firm-fixed-price (FFP) contract type is generally favored for its ability to control costs and transfer risk to the contractor. Under an FFP agreement, the contractor agrees to a set price for the work, and is responsible for absorbing any cost overruns. This incentivizes the contractor to manage its expenses efficiently and complete the work within the agreed-upon budget. For the government, this means predictable costs, assuming the scope of work does not change significantly. The primary risk for the contractor is underestimating costs, while the government's main risk is potentially paying a premium if the initial price was set too high due to lack of competition or inadequate negotiation.

Industry Classification

NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Semiconductor and Related Device Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2000 EAST EL SEGUNDO BLVD., EL SEGUNDO, CA, 90245

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $48,703,288

Exercised Options: $48,703,288

Current Obligation: $48,703,288

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0038307G700H

IDV Type: IDC

Timeline