Raytheon Company awarded $32.3M for Depot Test Equipment Upgrades, Installation, and Training by the Department of the Army

Contract Overview

Contract Amount: $32,311,122 ($32.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2009-05-19

End Date: 2013-11-30

Contract Duration: 1,656 days

Daily Burn Rate: $19.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DEPOT TEST EQUIPMENT UPGRADES, INSTALLATION AND TRAINING

Place of Performance

Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $32.3 million to RAYTHEON COMPANY for work described as: DEPOT TEST EQUIPMENT UPGRADES, INSTALLATION AND TRAINING Key points: 1. The contract value of $32.3 million for depot test equipment upgrades represents a significant investment in maintaining critical defense capabilities. 2. As a sole-source award, the absence of a competitive bidding process raises questions about potential price efficiencies and market-driven innovation. 3. The duration of the contract (over 4 years) suggests a substantial and ongoing need for these specialized services. 4. The award falls under the Guided Missile and Space Vehicle Manufacturing sector, indicating a focus on advanced defense technologies. 5. The fixed-price contract type aims to provide cost certainty for the government, shifting performance risk to the contractor.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without comparable sole-source awards for similar depot test equipment upgrades. The fixed-price nature provides some cost control, but the lack of competition prevents a direct comparison against market rates or alternative solutions. The total award amount of $32.3 million over more than four years suggests a substantial investment, and its fairness hinges on the necessity and scope of the upgrades.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, technology, or proprietary knowledge to fulfill the requirement. The lack of competition limits the government's ability to leverage market forces to achieve the best possible pricing and terms.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. It also limits opportunities for other businesses to compete for this work.

Public Impact

The Department of the Army benefits from upgraded and functional depot test equipment, crucial for maintaining guided missiles and space vehicles. This contract supports the operational readiness and effectiveness of the military's missile and space vehicle maintenance and testing capabilities. The services delivered include installation and training, ensuring personnel can effectively utilize the new test equipment. The primary geographic impact is likely within Army depots responsible for the maintenance and testing of these advanced systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in suboptimal pricing for the government.
Sole-source nature limits transparency in the procurement process.
Potential for vendor lock-in due to specialized equipment and training.

Positive Signals

Fixed-price contract type provides cost certainty.
Award supports critical defense infrastructure and readiness.
Contract includes installation and training, ensuring effective utilization.

Sector Analysis

The Guided Missile and Space Vehicle Manufacturing sector is a highly specialized area within the defense industry, characterized by advanced technology, stringent quality requirements, and significant government investment. Contracts in this sector often involve complex systems and long development cycles. The market is typically dominated by a few large, established defense contractors. Spending benchmarks for depot test equipment upgrades are difficult to establish due to the unique nature of each requirement and the proprietary technologies involved.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there information suggesting significant subcontracting opportunities for small businesses. The nature of specialized depot test equipment upgrades often requires capabilities held by larger, prime contractors. Further analysis would be needed to determine if any subcontracting plans were mandated or voluntarily pursued.

Oversight & Accountability

As a sole-source award, oversight would typically focus on contract performance, adherence to specifications, and delivery schedules. The Department of the Army's contracting officers and program managers are responsible for monitoring Raytheon's performance. Transparency is limited due to the non-competitive nature. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Logistics Agency (DLA) Equipment Procurement
Army Aviation and Missile Command (AMCOM) Sustainment Programs
Space and Missile Systems Center (SMC) Test and Evaluation
Guided Missile Maintenance and Repair Contracts

Risk Flags

Sole-source award lacks competitive pricing pressure.
Limited transparency in the procurement process.
Potential for vendor lock-in with specialized equipment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.3 million to RAYTHEON COMPANY. DEPOT TEST EQUIPMENT UPGRADES, INSTALLATION AND TRAINING

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 $32.3 million.

What is the period of performance?

Start: 2009-05-19. End: 2013-11-30.

What specific types of depot test equipment are being upgraded or installed under this contract?

The provided data does not specify the exact types of depot test equipment being upgraded or installed. However, given the contract's classification under 'Guided Missile and Space Vehicle Manufacturing' and its award to Raytheon Company, it is highly probable that the equipment relates to the testing, calibration, and diagnostics of complex missile systems, guidance systems, and potentially space vehicle components. This could include specialized electronic test sets, environmental chambers, vibration tables, or integrated diagnostic systems tailored for these advanced defense assets. Further details would likely be found in the contract's statement of work.

Why was this contract awarded on a sole-source basis instead of being competed?

Sole-source awards are typically justified when only one responsible source is available or capable of meeting the government's needs. For specialized defense equipment like depot test systems for guided missiles and space vehicles, the justification might stem from proprietary technology, unique manufacturing capabilities, existing system integration requirements, or the need for continuity with previously fielded systems. Raytheon, as a major defense contractor, likely possesses specific expertise and intellectual property related to the systems requiring these upgrades, making them the only viable option without significant delays or increased costs associated with developing a new solution or qualifying another vendor.

What is the historical spending pattern for similar depot test equipment upgrades by the Department of the Army?

The provided data does not include historical spending patterns for similar contracts. However, the Department of the Army, like other branches of the military, consistently invests in maintaining and upgrading its testing and maintenance infrastructure. Spending on depot test equipment is often driven by the lifecycle of weapon systems, technological advancements, and evolving operational requirements. Given the specialized nature of guided missile and space vehicle technology, such upgrades are likely periodic rather than continuous, with significant investments made when major system overhauls or new technology insertions occur. Analyzing broader defense procurement databases would be necessary to establish historical trends.

What are the potential risks associated with a sole-source contract of this magnitude?

The primary risk associated with a sole-source contract of this magnitude ($32.3 million) is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government may not achieve the most cost-effective solution. Other risks include a reduced incentive for the contractor to innovate or improve efficiency beyond contractual requirements, potential vendor lock-in where the government becomes dependent on a single supplier for future upgrades or support, and a lack of transparency in the procurement process. Ensuring robust contract oversight and performance management becomes critical to mitigate these risks.

How does this contract contribute to the overall readiness and modernization of the Army's missile and space vehicle programs?

This contract directly contributes to the readiness and modernization of the Army's missile and space vehicle programs by ensuring that the critical test and diagnostic equipment used in depots is up-to-date, functional, and capable of supporting current and future systems. Modernized test equipment allows for more accurate and efficient identification of faults, calibration of components, and overall maintenance of complex weapon systems. This, in turn, enhances the reliability and performance of these assets in the field, reduces downtime, and supports the integration of new technologies or upgrades to existing platforms, thereby bolstering overall military capability.

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

Address: 350 LOWELL ST, ANDOVER, MA, 06

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: $32,311,122

Exercised Options: $32,311,122

Current Obligation: $32,311,122

Contract Characteristics

Cost or Pricing Data: YES

Timeline