DoD's $63.6M Patriot Missile Support Contract with Raytheon: Engineering Services Lacked Competition

Contract Overview

Contract Amount: $63,662,866 ($63.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2008-02-01

End Date: 2014-07-31

Contract Duration: 2,372 days

Daily Burn Rate: $26.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: PATRIOT MISSILE SUPPORT CENTER

Place of Performance

Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $63.7 million to RAYTHEON COMPANY for work described as: PATRIOT MISSILE SUPPORT CENTER Key points: 1. Significant contract value of $63.6M awarded for essential missile support. 2. Sole-source award to Raytheon Company raises questions about competitive pricing. 3. Long contract duration (2008-2014) may indicate a need for ongoing, specialized services. 4. Engineering Services sector often involves complex, proprietary technologies, potentially limiting competition.

Value Assessment

Rating: questionable

The contract's Cost Plus Fixed Fee (CPFF) structure, combined with a lack of competition, makes a direct pricing assessment difficult. Without competitive bids, it's hard to determine if the fixed fee accurately reflects market rates for these specialized engineering services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This method bypasses the price discovery benefits of competitive bidding, potentially leading to higher costs for taxpayers.

Taxpayer Impact: The lack of competition for a substantial $63.6M contract likely resulted in higher costs than if multiple vendors had vied for the work.

Public Impact

Taxpayers may have overpaid due to the absence of competitive bidding. The Department of Defense relies on Raytheon for critical Patriot missile system support. Long-term contracts can sometimes lead to complacency or reduced innovation if not managed effectively.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost-plus contract type
Long contract duration

Positive Signals

Essential defense system support
Established contractor relationship

Sector Analysis

This contract falls within the Engineering Services sector, which often involves highly specialized technical expertise. Spending in this area can vary significantly based on defense needs and technological advancements, but competitive sourcing is generally preferred to ensure value.

Small Business Impact

The data indicates this contract was awarded to Raytheon Company and does not specify any subcontracting to small businesses. There is no indication that small businesses were considered or had an opportunity to compete for this significant sole-source award.

Oversight & Accountability

The sole-source nature of this contract warrants scrutiny regarding the justification for not competing the requirement. Oversight should focus on ensuring the fixed fee was reasonable and that the government received fair value over the contract's extended period.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Lack of competitive bidding
Sole-source award justification unclear
Potential for inflated costs due to CPFF and no competition
Long contract duration without clear re-competition points
No small business participation evident

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $63.7 million to RAYTHEON COMPANY. PATRIOT MISSILE SUPPORT CENTER

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 $63.7 million.

What is the period of performance?

Start: 2008-02-01. End: 2014-07-31.

What was the specific justification for awarding this contract on a sole-source basis, and were alternative solutions explored?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one vendor can fulfill the requirement. For this Patriot missile support contract, the justification likely centered on Raytheon's specific expertise and established role with the system. Exploring alternatives would involve assessing if other firms could provide equivalent engineering services or if the requirement could be broken down.

How was the 'fixed fee' component of the Cost Plus Fixed Fee (CPFF) contract determined to be fair and reasonable without competition?

Determining a fair and reasonable fixed fee without competition is challenging. Agencies often rely on historical pricing data for similar services, should-cost analyses, or independent government cost estimates. For this contract, the Army likely used benchmarks from previous Patriot support contracts or similar engineering services provided by Raytheon or other defense contractors to establish the fee.

What mechanisms were in place to ensure cost control and performance monitoring given the CPFF structure and lack of competition?

Despite the CPFF structure and sole-source award, robust oversight is crucial. The Army should have implemented stringent performance metrics, regular progress reviews, and detailed audits of contractor costs. Mechanisms like Earned Value Management (EVM) could have been employed to track progress against cost and schedule, ensuring accountability and identifying potential cost overruns early.

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

Solicitation ID: W31P4Q07R0183

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 350 LOWELL ST, ANDOVER, MA, 01810

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $63,914,955

Exercised Options: $63,914,955

Current Obligation: $63,662,866

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline