DoD Awards $369M Engineering Services Contract to Raytheon Company
Contract Overview
Contract Amount: $369,300,752 ($369.3M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2019-01-30
End Date: 2021-01-31
Contract Duration: 732 days
Daily Burn Rate: $504.5K/day
Competition Type: NOT COMPETED
Pricing Type: FIXED PRICE LEVEL OF EFFORT
Sector: Defense
Official Description: ENGINEERING SERVICES
Place of Performance
Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810
Plain-Language Summary
Department of Defense obligated $369.3 million to RAYTHEON COMPANY for work described as: ENGINEERING SERVICES Key points: 1. Significant contract value of $369.3M for engineering services. 2. Awarded to a single, large incumbent contractor, Raytheon Company. 3. Potential for limited competition due to contract type and history. 4. Sector is Defense, with specific NAICS code 541330 (Engineering Services).
Value Assessment
Rating: fair
The contract's fixed-price level-of-effort structure suggests an attempt to control costs, but the lack of competition raises concerns about whether the best possible price was achieved. Benchmarking against similar contracts would be necessary for a definitive assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was not competed, indicating a limited competition approach. This likely occurred because the award was a delivery order under an existing contract, potentially with a sole-source justification or a pre-existing agreement. The lack of open competition limits price discovery and may result in higher costs.
Taxpayer Impact: The absence of competitive bidding for a contract of this magnitude means taxpayers may not have received the most cost-effective solution, potentially leading to overspending.
Public Impact
Taxpayers may be paying more than necessary due to the lack of competition. The long duration (732 days) of the contract raises questions about the ongoing need and potential for future competitive re-evaluation. Dependence on a single contractor for critical engineering services could pose a risk if performance issues arise.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of Competition
- Potential for Overpricing
- Long Contract Duration
Positive Signals
- Fixed Price Structure (potential cost control)
- Awarded to established contractor (potential for reliability)
Sector Analysis
This contract falls within the Engineering Services sector, specifically under NAICS code 541330. Defense spending in this area is substantial, often involving complex technical requirements and long-term projects. Benchmarks for similar engineering services contracts within the DoD can vary widely based on scope and complexity.
Small Business Impact
The contract was awarded to Raytheon Company, a large business. There is no indication that small businesses were involved in this specific award, either as prime contractors or subcontractors. Future opportunities for small businesses in this area would depend on subcontracting plans or subsequent competitive actions.
Oversight & Accountability
The contract was managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. However, the lack of competition limits the agency's ability to leverage market forces for cost savings. Further oversight would focus on performance metrics and adherence to contract terms.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competitive bidding
- Potential for inflated pricing
- Limited transparency in award process
- Long contract duration without re-competition
- Sole reliance on incumbent contractor
Tags
engineering-services, department-of-defense, ma, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $369.3 million to RAYTHEON COMPANY. ENGINEERING SERVICES
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 $369.3 million.
What is the period of performance?
Start: 2019-01-30. End: 2021-01-31.
What was the justification for not competing this significant engineering services contract?
The data indicates this was a delivery order, suggesting it might have been placed under an existing indefinite-delivery/indefinite-quantity (IDIQ) contract or a previously awarded sole-source vehicle. The specific justification for not competing would likely be documented within the contract file, potentially citing reasons such as urgency, unique capabilities, or follow-on work requirements.
How does the fixed-price level-of-effort structure impact cost control and contractor risk?
A fixed-price level-of-effort (FPLE) contract aims to control costs by setting a ceiling on the total price and the estimated effort hours. However, it shifts some risk to the government, as the contractor is paid for the effort expended up to the ceiling, regardless of the final outcome. This structure can incentivize contractors to complete work efficiently but may not guarantee the lowest possible cost if competition is absent.
What is the potential impact of this non-competed award on future engineering service procurements within the DoD?
A non-competed award of this size can set a precedent and potentially discourage future competition if similar requirements arise. It may signal to the market that certain types of engineering services are being awarded without full and open competition, potentially impacting the government's ability to secure the best value in subsequent procurements.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: FIXED PRICE LEVEL OF EFFORT (B)
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: $369,300,752
Exercised Options: $369,300,752
Current Obligation: $369,300,752
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W15QKN18D0015
IDV Type: IDC
Timeline
Start Date: 2019-01-30
Current End Date: 2021-01-31
Potential End Date: 2021-01-31 00:00:00
Last Modified: 2025-08-07
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