DoD's $42.6M Engineering Services Contract with Raytheon Company: A Cost-Plus Incentive Fee Award

Contract Overview

Contract Amount: $42,637,079 ($42.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2005-12-14

End Date: 2008-12-14

Contract Duration: 1,096 days

Daily Burn Rate: $38.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Other

Place of Performance

Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810, UNITED STATES OF AMERICA

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $42.6 million to RAYTHEON COMPANY for work described as: Key points: 1. Significant contract value of $42.6 million awarded to a major defense contractor. 2. Limited competition indicated by 'NOT COMPETED' status. 3. Potential risk associated with cost-plus contracts, which can incentivize higher spending. 4. Engineering services sector is critical for defense operations and modernization.

Value Assessment

Rating: fair

The contract type is Cost Plus Incentive Fee (CPIF), which can lead to higher costs if not managed carefully. Without specific benchmark data for similar engineering services contracts, it's difficult to definitively assess pricing, but CPIF contracts generally carry a higher risk of cost overruns compared to fixed-price contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was 'NOT COMPETED,' suggesting a limited competition scenario. This lack of full and open competition may have impacted price discovery, potentially leading to a less favorable price for the government.

Taxpayer Impact: The absence of competitive bidding on this $42.6 million contract raises concerns about taxpayer value. Without a competitive process, it's harder to ensure the most cost-effective solution was secured.

Public Impact

Taxpayers may be paying more than necessary due to the lack of competition. The Department of Defense relies on these engineering services for critical operations. The long duration of the contract (2005-2008) suggests ongoing needs for these services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost-plus contract type
Long contract duration

Positive Signals

Awarded to a reputable contractor
Addresses critical engineering needs

Sector Analysis

This contract falls within the Engineering Services sector, which is vital for the Department of Defense's infrastructure and technological development. Spending in this sector can vary widely based on project scope and complexity, but competitive bidding is generally preferred to ensure value.

Small Business Impact

There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. The award to Raytheon Company, a large defense contractor, suggests a focus on established, large-scale capabilities.

Oversight & Accountability

The 'NOT COMPETED' status warrants further oversight to understand the justification for bypassing a competitive process. Robust contract management and performance monitoring are crucial for cost-plus contracts to ensure accountability and prevent waste.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Lack of competitive bidding
Potential for cost overruns with CPIF contract
No indication of small business participation
Limited transparency on justification for non-competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.6 million to RAYTHEON COMPANY. See the official description on USAspending.

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 $42.6 million.

What is the period of performance?

Start: 2005-12-14. End: 2008-12-14.

What was the specific justification for not competing this engineering services contract, and were alternative solutions considered?

The justification for not competing this contract is not provided in the data. Typically, non-competitive awards are made when only one source can fulfill the requirement due to unique capabilities, urgent needs, or specific circumstances. A thorough review would be needed to confirm the validity of the justification and explore if any competitive alternatives were overlooked.

How did the incentive fee structure in this Cost Plus Incentive Fee (CPIF) contract impact the final cost and contractor performance?

The CPIF structure aims to incentivize the contractor to control costs by sharing savings or cost overruns with the government. Without the final cost data and performance metrics, it's impossible to determine the exact impact. However, CPIF contracts inherently carry a risk of higher final costs compared to fixed-price agreements if cost targets are not met or if incentives are structured unfavorably.

What is the long-term strategic value of this engineering services contract to the Department of the Army, and how does it align with current defense priorities?

The contract, awarded in 2005 and ending in 2008, likely supported specific engineering needs of the Department of the Army at that time. Its long-term strategic value and alignment with current defense priorities would depend on the nature of the engineering services provided. If these services were foundational for critical systems or infrastructure, they could still hold relevance, but a direct link to current priorities would require further investigation into the contract's deliverables.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: EDUCATION AND TRAINING › EDUCATION AND TRAINING SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Address: 350 LOWELL ST, ANDOVER, MA, 01810

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline