Raytheon Company awarded $199M contract for engineering services, with a significant portion for radar equipment

Contract Overview

Contract Amount: $199,245,399 ($199.2M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2006-06-30

End Date: 2016-07-22

Contract Duration: 3,675 days

Daily Burn Rate: $54.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200608!004413!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q06C0323 !A!N! !N! ! !20060630!20110731!193049236!193049236!001339159!N!RAYTHEON COMPANY !1001 BOSTON POST RD E !MARLBOROUGH !MA!01752!38715!017!25!MARLBOROUGH !MIDDLESEX !MASS !+000036613141!N!N!000000000000!5840!RADAR EQUIPMENT, EXCEPT AIRBORNE !A1C!OTHER AIRCRAFT EQUIPMENT !000 !NOT DISCERNABLE !541330!E! !3! ! ! ! ! !99990909!B! ! !A! !C!U!J!1!001!N!1G!A!Y!F! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: MARLBOROUGH, MIDDLESEX County, MASSACHUSETTS, 01752

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $199.2 million to RAYTHEON COMPANY for work described as: 200608!004413!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q06C0323 !A!N! !N! ! !20060630!20110731!193049236!193049236!001339159!N!RAYTHEON COMPANY !1001 BOSTON POST RD E !MARLBOROUGH !MA!01752!38715!017!25!MARLBOROUGH !MIDD… Key points: 1. Contract value exceeds $199 million, primarily for engineering services and radar equipment. 2. Awarded to Raytheon Company, a major defense contractor. 3. Contract duration spans over 10 years, indicating a long-term need. 4. The contract is a definitive contract, suggesting a well-defined scope of work. 5. Primarily focused on engineering services and radar equipment, aligning with defense needs. 6. The contract was not competed, raising questions about potential cost efficiencies.

Value Assessment

Rating: fair

The total award amount of $199,245,399.30 for engineering services and radar equipment over a 10-year period appears substantial. Benchmarking this against similar long-term, complex defense contracts is challenging without more specific service details. However, the lack of competition suggests that a thorough price comparison with market rates may not have been conducted, potentially impacting the overall value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source procurement, meaning it was not open to competition from other vendors. This approach is typically used when a specific contractor possesses unique capabilities or when there are urgent needs that preclude a competitive process. The lack of competition limits the government's ability to leverage market forces to achieve the best possible pricing and terms.

Taxpayer Impact: For taxpayers, a sole-source award means there is a reduced likelihood of benefiting from competitive pricing that could drive down costs. This can lead to higher overall expenditures for the government.

Public Impact

The primary beneficiaries are the U.S. Army and potentially other branches of the Department of Defense requiring advanced radar systems and related engineering support. Services delivered include engineering support and the provision of radar equipment, crucial for national defense and surveillance. The geographic impact is primarily within the United States, with potential for deployment of equipment globally. Workforce implications include employment opportunities at Raytheon Company and its subcontractors, particularly in engineering and manufacturing roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs than a competed contract.
Long contract duration could present risks if technology or requirements change significantly.
Sole-source awards can limit opportunities for smaller, innovative companies to enter the market.

Positive Signals

Award to a known, established contractor like Raytheon suggests a level of confidence in their capabilities.
The definitive contract type implies a clear understanding of the scope and requirements.
The long duration may indicate a stable, ongoing need for these critical defense systems.

Sector Analysis

This contract falls within the Defense sector, specifically related to aerospace and defense manufacturing and engineering services. The market for radar equipment and associated engineering is dominated by a few large, specialized defense contractors. The value of this contract is significant within this niche, representing a substantial investment in advanced military technology. Comparable spending benchmarks would typically involve other large-scale defense procurements for similar complex systems.

Small Business Impact

There is no indication of a small business set-aside for this contract. Given the sole-source nature and the specialized equipment and services involved, it is unlikely that significant subcontracting opportunities for small businesses were mandated or actively pursued through a competitive process. This contract may not directly benefit the small business ecosystem unless Raytheon proactively engages them.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army and the Department of Defense. Accountability measures are inherent in the definitive contract structure, requiring Raytheon to meet specific performance standards and delivery schedules. Transparency may be limited due to the sole-source nature, but contract modifications and performance reports would be subject to internal review and potentially Inspector General oversight.

Related Government Programs

Missile Defense Systems
Airborne Radar Systems
Ground Support Equipment
Defense Engineering Services
Advanced Technology Development

Risk Flags

Sole-source award
Long contract duration
Lack of competition
High contract value

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $199.2 million to RAYTHEON COMPANY. 200608!004413!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q06C0323 !A!N! !N! ! !20060630!20110731!193049236!193049236!001339159!N!RAYTHEON COMPANY !1001 BOSTON POST RD E !MARLBOROUGH !MA!01752!38715!017!25!MARLBOROUGH !MIDDLESEX !MASS !+000036613141!N!N!000000000000!5840!RADAR EQUIPMENT, EXCEPT AIRBORNE !A1C!OTHER AIRCRAFT EQUIPMENT !000 !NOT DISCERNABLE !541330!E! !3! ! ! ! ! !999

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 $199.2 million.

What is the period of performance?

Start: 2006-06-30. End: 2016-07-22.

What is Raytheon Company's track record with similar sole-source defense contracts?

Raytheon Company has a long history of securing large, sole-source contracts with the U.S. Department of Defense, particularly in areas like missile systems, radar technology, and defense electronics. Their extensive experience and established relationship with government agencies often position them as a preferred or sole provider for specialized requirements. While sole-source awards can raise concerns about competition, they are often justified by the unique technological capabilities, proprietary information, or existing integration of Raytheon's systems within military platforms. Analyzing past sole-source awards to Raytheon would involve reviewing contract performance, any associated cost overruns or delays, and the specific justifications provided by the government for non-competitive procurement.

How does the $199 million contract value compare to other radar equipment and engineering service contracts?

The $199 million contract value for engineering services and radar equipment is substantial and falls within the upper range for major defense procurements. To benchmark this value effectively, one would need to compare it against similar definitive contracts awarded to other prime defense contractors for comparable radar systems or complex engineering services over similar timeframes. Factors such as the specific type of radar (e.g., airborne, ground-based, surveillance, targeting), the scope of engineering services (e.g., R&D, sustainment, integration), and the contract duration are critical for a meaningful comparison. Without these specifics, it's difficult to definitively state if the price is high or low, but its magnitude suggests a significant investment in advanced defense capabilities.

What are the primary risks associated with a sole-source award of this magnitude and duration?

The primary risks associated with a sole-source award of this magnitude and duration include potential cost inefficiencies due to the lack of competitive pressure, which could lead to overpayment. There's also a risk of vendor lock-in, where the government becomes overly reliant on a single provider, making future transitions or technology upgrades more difficult and expensive. Furthermore, without competition, there's a reduced incentive for the contractor to innovate aggressively or to maintain the highest levels of efficiency and responsiveness. The long duration (over 10 years) increases the risk of technological obsolescence or shifts in strategic requirements that the original contract may not adequately address, potentially leading to costly modifications or contract renegotiations.

How effective are sole-source contracts in meeting critical defense needs?

Sole-source contracts can be effective in meeting critical defense needs when specific circumstances warrant them. This often includes situations where only one contractor possesses the necessary proprietary technology, specialized expertise, or existing infrastructure to fulfill an urgent requirement. For highly complex or cutting-edge defense systems, like advanced radar, a single developer might hold unique intellectual property or have established integration with existing platforms that makes competition impractical or detrimental to national security. In such cases, a sole-source award can ensure timely delivery of essential capabilities. However, effectiveness is contingent on robust government oversight to ensure fair pricing and performance, even in the absence of competition.

What are the historical spending patterns for radar equipment and engineering services within the Department of Defense?

Historical spending patterns for radar equipment and engineering services within the Department of Defense show a consistent and significant investment, driven by the evolving nature of warfare and surveillance requirements. The DoD regularly procures advanced radar systems for various platforms, including aircraft, ships, ground vehicles, and missile defense systems. Spending in this category is often characterized by large, multi-year contracts awarded to major defense contractors like Raytheon, Northrop Grumman, and Lockheed Martin. These contracts frequently involve substantial research, development, and sustainment components, reflecting the high cost and complexity of cutting-edge radar technology. Fluctuations in spending can be influenced by geopolitical events, technological advancements, and shifts in defense priorities.

Industry Classification

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

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: 1001 BOSTON POST RD E, MARLBOROUGH, MA, 01752

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline