Raytheon Company awarded $87.4M for PATRIOT radar upgrades, a sole-source contract for missile defense training

Contract Overview

Contract Amount: $87,447,323 ($87.4M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2016-02-03

End Date: 2019-06-28

Contract Duration: 1,241 days

Daily Burn Rate: $70.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PHASED ARRAY TRACKING RADAR TO INTERCEPT OF TARGET (PATRIOT) SCHOOLHOUSE RADAR UPGRADE (SHU)

Place of Performance

Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $87.4 million to RAYTHEON COMPANY for work described as: PHASED ARRAY TRACKING RADAR TO INTERCEPT OF TARGET (PATRIOT) SCHOOLHOUSE RADAR UPGRADE (SHU) Key points: 1. Contract awarded to a single, established provider of advanced radar systems. 2. Focus on upgrading training infrastructure for critical missile defense technology. 3. Long-term contract duration suggests ongoing need for system maintenance and updates. 4. Firm fixed-price structure aims to control costs for the Department of the Army. 5. Potential for limited competition to impact overall value for money. 6. Contract falls within the Guided Missile and Space Vehicle Manufacturing sector.

Value Assessment

Rating: fair

The contract value of $87.4 million for radar upgrades appears substantial. Benchmarking against similar sole-source contracts for specialized defense training systems is challenging due to the unique nature of the PATRIOT system. However, the firm fixed-price structure provides some cost certainty. Without competitive bidding, it is difficult to definitively assess if the pricing represents optimal value for money compared to what might be achieved in a more open market.

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 is typically used when a specific capability is required that only one entity possesses, or for follow-on work to an existing system. The lack of competition means that price discovery through market forces was not utilized, potentially leading to higher costs than if multiple vendors had bid.

Taxpayer Impact: For taxpayers, sole-source contracts can mean a lack of cost savings that might otherwise be realized through competitive bidding. This necessitates strong oversight to ensure the awarded price is fair and reasonable.

Public Impact

Personnel trained on the upgraded PATRIOT radar system will enhance national missile defense capabilities. The Department of the Army benefits from improved training infrastructure for a critical defense asset. This contract supports specialized manufacturing and technical expertise within the defense industrial base. The upgrade ensures that the PATRIOT system remains effective against evolving threats.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits opportunities for new entrants and potentially higher costs.
Long-term nature of defense contracts can sometimes lead to cost overruns if not managed tightly.

Positive Signals

Contract awarded to a known, experienced provider of advanced radar technology.
Firm fixed-price contract provides cost certainty for the government.
Focus on upgrading training systems ensures readiness for critical defense assets.

Sector Analysis

The Guided Missile and Space Vehicle Manufacturing sector is a highly specialized area within the defense industry, characterized by significant R&D investment and long product lifecycles. Contracts in this sector often involve complex technologies and require deep expertise. Raytheon is a major player in this space, particularly with its long history in radar and missile systems. Spending in this sector is driven by national security requirements and technological advancements in threat detection and interception.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have significant subcontracting requirements for small businesses based on the provided data. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal, though Raytheon may engage small businesses as suppliers for components or services.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. As a sole-source award, scrutiny on the justification for this approach and the fairness of the price is paramount. Transparency is enhanced through contract award databases, but detailed performance metrics and cost breakdowns may be less publicly available compared to competed contracts. Inspector General involvement would be triggered by allegations of fraud, waste, or abuse.

Related Government Programs

PATRIOT Missile System
Air and Missile Defense Programs
Defense Training and Simulation
Guided Missile Manufacturing

Risk Flags

Sole-source award lacks competitive pricing validation.
Potential for cost overruns in long-term, specialized defense contracts.
Limited public data on specific performance metrics and value benchmarks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $87.4 million to RAYTHEON COMPANY. PHASED ARRAY TRACKING RADAR TO INTERCEPT OF TARGET (PATRIOT) SCHOOLHOUSE RADAR UPGRADE (SHU)

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $87.4 million.

What is the period of performance?

Start: 2016-02-03. End: 2019-06-28.

What is the historical spending trend for the PATRIOT radar upgrade program?

The provided data indicates a single definitive contract awarded from February 2016 to June 2019 for $87.4 million. This specific award represents a discrete investment in the PATRIOT Schoolhouse Radar Upgrade (SHU). To understand historical spending trends, one would need to examine prior contracts related to PATRIOT radar maintenance, upgrades, or training systems, as well as subsequent investments. Without access to a broader contract history for the SHU or related PATRIOT training components, it's difficult to establish a trend. However, the nature of advanced defense systems often implies recurring investments for modernization and sustainment over their lifecycle.

How does the cost of this radar upgrade compare to similar training system procurements?

Comparing the $87.4 million cost of this sole-source PATRIOT radar upgrade to similar training system procurements is challenging due to the highly specialized nature of the PATRIOT system and its radar components. Sole-source awards inherently lack a competitive benchmark. To provide a meaningful comparison, one would need to identify other advanced, large-scale military training simulators or radar system upgrades procured through competitive means. Factors such as system complexity, technological sophistication, required fidelity, and the scope of the upgrade (e.g., hardware, software, integration) would need to be closely matched. Absent such comparable, competed contracts, assessing the 'value for money' remains qualitative.

What are the key performance indicators (KPIs) for this contract, and how is performance being measured?

The provided data does not explicitly list the Key Performance Indicators (KPIs) for this specific contract. However, for a radar upgrade within a training 'schoolhouse' environment, typical KPIs would likely revolve around system availability, reliability, accuracy of simulated radar returns, integration with other training components, and user feedback from instructors and trainees. Performance would be measured against contract requirements, potentially including uptime percentages, defect rates, and successful completion of training scenarios. The firm fixed-price nature suggests that meeting defined technical specifications and delivery schedules are critical performance aspects.

What is Raytheon Company's track record with the PATRIOT system and similar defense contracts?

Raytheon Company has a long and established track record as the prime contractor for the PATRIOT missile defense system, including its radar components. They have been responsible for the development, production, and sustainment of the PATRIOT system for decades. This includes numerous upgrades and modifications to enhance its capabilities. Their experience extends to other advanced radar systems and complex defense platforms. Awarding this sole-source contract for the SHU upgrade leverages this extensive, specialized expertise and historical performance with the specific technology, suggesting a high degree of confidence in their ability to execute the required work.

What are the potential risks associated with a sole-source award for critical defense technology upgrades?

The primary risk associated with a sole-source award for critical defense technology upgrades is the potential for inflated costs due to the absence of competitive pressure. Without competing bids, the government may pay a premium. Another risk is a lack of innovation, as the incumbent contractor may have less incentive to propose novel or more cost-effective solutions. Furthermore, sole-source contracts can create vendor lock-in, making it difficult and expensive to switch providers in the future. Ensuring fair pricing and robust oversight becomes even more critical in sole-source situations to mitigate these risks.

What is the expected lifespan of the upgraded PATRIOT radar system, and what are future sustainment costs?

The provided data does not specify the expected lifespan of the upgraded PATRIOT radar system or detail future sustainment costs. However, the PATRIOT system is a major strategic asset, and its components are typically designed for long operational lives, often measured in decades. Upgrades like the SHU aim to extend the system's relevance and effectiveness. Future sustainment costs would depend on factors such as the complexity of the technology, the availability of spare parts, the need for ongoing software updates, and the chosen support strategy (e.g., organic maintenance vs. contractor logistics support). These costs are usually addressed through separate, subsequent contracts.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing

Product/Service Code: GUIDED MISSLES

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

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: $87,447,323

Exercised Options: $87,447,323

Current Obligation: $87,447,323

Subaward Activity

Number of Subawards: 106

Total Subaward Amount: $15,392,446

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline