Raytheon Company's $29.1M R&D contract for DISA's CFBLNet shows fair value with 2 bids

Contract Overview

Contract Amount: $29,155,071 ($29.2M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2011-11-26

End Date: 2017-05-25

Contract Duration: 2,007 days

Daily Burn Rate: $14.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: DISA COMBINED FEDERATED BATTLE LAB NETWORK -CFBLNET

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22203

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $29.2 million to RAYTHEON COMPANY for work described as: DISA COMBINED FEDERATED BATTLE LAB NETWORK -CFBLNET Key points: 1. Contract value of $29.1M for R&D services. 2. Competition was full and open, indicating a competitive bidding process. 3. The contract duration spans from November 2011 to May 2017. 4. The North American Industry Classification System (NAICS) code is 541712, for R&D in physical, engineering, and life sciences. 5. The contract type is Cost Plus Fixed Fee (CPFF), which allows for cost reimbursement plus a fixed fee. 6. The award was a Delivery Order under a larger contract. 7. The contractor, Raytheon Company, is a major defense contractor. 8. The contract was awarded by the Defense Information Systems Agency (DISA).

Value Assessment

Rating: fair

The contract's value of $29.1M over approximately 5.5 years for R&D services appears reasonable given the nature of research and development, which can involve unpredictable costs and outcomes. Benchmarking against similar R&D contracts is challenging due to the specialized nature of the work. However, the CPFF contract type suggests that costs were monitored, and the fixed fee provided a defined profit margin for the contractor. The number of bids received (2) suggests some level of competition, which typically helps in achieving fair pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. Two bids were received, indicating a moderate level of competition for this specific award. While two bidders suggest some market interest, a higher number of bids would typically lead to more robust price discovery and potentially lower costs for the government.

Taxpayer Impact: The full and open competition, despite receiving only two bids, suggests that taxpayers likely received a fair price. However, exploring avenues to encourage more bidders in future solicitations could potentially yield even greater cost savings.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Defense Information Systems Agency (DISA), which receives enhanced network capabilities. The services delivered are crucial for research and development in advanced networking and communication technologies. The geographic impact is primarily within the United States, supporting defense infrastructure. The contract supports a specialized workforce in R&D, engineering, and network management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can sometimes lead to cost overruns if not managed diligently.
Limited competition (2 bids) might indicate potential for higher pricing than if more bidders were present.
The R&D nature of the contract inherently carries risks of project scope changes and unforeseen technical challenges.

Positive Signals

Awarded under full and open competition, ensuring a broad search for qualified contractors.
The contractor, Raytheon Company, is a well-established entity with significant experience in defense contracting.
The contract supports critical research and development for national security.

Sector Analysis

This contract falls within the Research and Development sector, specifically NAICS code 541712. This sector is characterized by innovation and the pursuit of new technologies. Spending in this area is crucial for maintaining a technological edge, particularly in defense. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of R&D projects, but significant government investment is typical for advanced defense research.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit information regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, though Raytheon may engage small businesses as subcontractors in their broader operations.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Information Systems Agency (DISA) contracting officers and program managers. As a Cost Plus Fixed Fee contract, detailed financial reporting and auditing would be expected to ensure costs are reasonable and allocable. Transparency is generally maintained through contract databases and reporting requirements, though specific project details might be sensitive.

Related Government Programs

Defense Information Systems Agency (DISA) Network Modernization Programs
Department of Defense Research and Development Initiatives
Advanced Communications Technology Development

Risk Flags

Potential for cost overruns due to CPFF structure.
Moderate competition level may impact price optimization.
R&D projects inherently carry technical and schedule risks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.2 million to RAYTHEON COMPANY. DISA COMBINED FEDERATED BATTLE LAB NETWORK -CFBLNET

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Information Systems Agency).

What is the total obligated amount?

The obligated amount is $29.2 million.

What is the period of performance?

Start: 2011-11-26. End: 2017-05-25.

What is Raytheon Company's track record with similar R&D contracts for DISA?

Raytheon Company has a long history of contracting with the Department of Defense, including DISA, across various R&D and support services. While specific details on past CFBLNet-related R&D projects with Raytheon are not provided in this data snippet, their extensive experience in areas like command and control, cybersecurity, and network infrastructure suggests a strong capability. Analyzing their performance on other CPFF contracts with DISA would provide further insight into their ability to manage costs and deliver on technical objectives within R&D parameters. Past performance reviews and contract award histories would be necessary for a comprehensive assessment.

How does the $29.1M contract value compare to other R&D investments in similar network technologies?

The $29.1M contract value for DISA's CFBLNet R&D over approximately 5.5 years represents an average annual investment of roughly $5.3 million. This figure needs to be contextualized within the broader landscape of defense R&D spending. DISA and other defense agencies invest billions annually in research and development for advanced technologies. While $5.3M per year might seem modest in the context of large-scale weapon system development, it can be substantial for specialized network research. Direct comparisons are difficult without knowing the specific technological advancements targeted by CFBLNet and the scope of work. However, it falls within a typical range for focused R&D efforts on critical infrastructure components.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D?

The primary risks associated with a CPFF contract for R&D involve potential cost overruns and contractor incentives. While the fixed fee provides the contractor with a defined profit, the 'cost plus' element means the government reimburses allowable costs. If R&D efforts encounter unexpected technical hurdles or require more resources than initially estimated, the total cost to the government can escalate significantly. Contractors may have less incentive to control costs rigorously compared to fixed-price contracts, as their fee is fixed regardless of the final cost. Effective oversight, stringent cost accounting standards, and clear definition of allowable costs are crucial to mitigate these risks.

How effective has DISA been in managing R&D contracts to achieve desired technological outcomes?

DISA's effectiveness in managing R&D contracts is generally considered robust, given their critical role in providing information technology and communication services to the Department of Defense. They manage a vast portfolio of complex R&D projects. Success is often measured by the successful integration of new technologies into operational environments and the maintenance of a technological advantage. While specific metrics for the CFBLNet project are not detailed here, DISA's track record involves both successful advancements and challenges inherent in cutting-edge research. Continuous process improvement and lessons learned from past contracts inform their current management strategies.

What are the historical spending patterns for DISA's network research and development initiatives?

Historical spending patterns for DISA's network R&D initiatives show a consistent and significant investment over the years, reflecting the ever-evolving nature of IT and communication needs within the DoD. DISA's budget allocations for R&D fluctuate based on strategic priorities, technological advancements, and emerging threats. While the $29.1M for CFBLNet is a specific data point, DISA's overall R&D spending can range from hundreds of millions to billions annually, encompassing a wide array of projects from cybersecurity to next-generation networks. Analyzing multi-year budget reports and contract databases would reveal trends in funding for specific technology areas and contractor investments.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp (UEI: 001344142)

Address: 7700 ARLINGTON BLVD, FALLS CHURCH, VA, 22042

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: $30,390,155

Exercised Options: $30,390,155

Current Obligation: $29,155,071

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC102808D2024

IDV Type: IDC

Timeline