DoD's $39.7M Raytheon Training Contract: Cost Plus Fixed Fee, Not Competed
Contract Overview
Contract Amount: $39,715,627 ($39.7M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2011-12-14
End Date: 2015-01-09
Contract Duration: 1,122 days
Daily Burn Rate: $35.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Official Description: NEW EQUIPMENT TRAINING (NET)
Place of Performance
Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810
Plain-Language Summary
Department of Defense obligated $39.7 million to RAYTHEON COMPANY for work described as: NEW EQUIPMENT TRAINING (NET) Key points: 1. Significant investment in specialized training services. 2. Sole provider Raytheon Company holds the contract. 3. Contract type (CPFF) may incentivize cost increases. 4. Lack of competition raises concerns about price discovery. 5. Training falls under 'Other Technical and Trade Schools' NAICS code.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee (CPFF) contract structure can lead to higher overall costs as the contractor is reimbursed for expenses plus a fixed fee. Without competitive bidding, it's difficult to benchmark pricing against market rates.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for the government as there was no competitive pressure to offer the best price.
Taxpayer Impact: The lack of competition on this nearly $40 million contract means taxpayers may have paid more than necessary for the training services provided.
Public Impact
Ensures specialized skills for military personnel. Potential for cost overruns due to contract type and lack of competition. Long contract duration (over 3 years) impacts budget predictability. Limited transparency on specific training outcomes and effectiveness.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost Plus Fixed Fee structure
- Sole-source award
Positive Signals
- Provides essential training for military operations
- Established provider with likely expertise
Sector Analysis
The Department of Defense frequently procures training services, often requiring specialized technical skills. Benchmarks for similar technical training contracts vary widely based on complexity and duration, but non-competitive awards tend to be higher.
Small Business Impact
This contract was awarded to Raytheon Company, a large defense contractor. There is no indication that small businesses were involved in the subcontracting or delivery of these training services.
Oversight & Accountability
The sole-source nature of this contract warrants closer oversight to ensure costs are reasonable and the training provided is effective and necessary. Auditing of expenses under the CPFF structure is crucial.
Related Government Programs
- Other Technical and Trade Schools
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Potential for overpricing due to lack of competition.
- CPFF contract type can incentivize higher costs.
- Lack of transparency on specific training outcomes.
- Long contract duration may not reflect current needs.
- No indication of small business participation.
Tags
other-technical-and-trade-schools, department-of-defense, ma, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $39.7 million to RAYTHEON COMPANY. NEW EQUIPMENT TRAINING (NET)
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 $39.7 million.
What is the period of performance?
Start: 2011-12-14. End: 2015-01-09.
What specific technical skills does this training impart, and how critical are they to current military readiness?
The contract specifies 'NEW EQUIPMENT TRAINING (NET)' under NAICS code 611519 (Other Technical and Trade Schools). While the exact equipment isn't detailed, such training is typically critical for operating and maintaining advanced military systems. Its importance to readiness depends on the specific technology and its deployment status within the Army.
Given the sole-source award and CPFF structure, what mechanisms were in place to control costs and ensure value for money?
With a sole-source, Cost Plus Fixed Fee (CPFF) contract, cost control relies heavily on robust government oversight, detailed auditing of contractor expenses, and negotiation of a fair fixed fee. The absence of competition means the government must proactively validate the necessity and reasonableness of all costs incurred by Raytheon.
How was the effectiveness of the training measured, and what were the key performance indicators (KPIs) for Raytheon?
The provided data does not specify the Key Performance Indicators (KPIs) or measurement methods used to assess the effectiveness of the training. Typically, effectiveness would be measured through trainee performance assessments, post-training skill application, and feedback from units receiving the trained personnel.
Industry Classification
NAICS: Educational Services › Technical and Trade Schools › Other Technical and Trade Schools
Product/Service Code: EDUCATION AND TRAINING › EDUCATION AND TRAINING SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W31P4Q12R0034
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
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: $64,964,979
Exercised Options: $39,715,627
Current Obligation: $39,715,627
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2011-12-14
Current End Date: 2015-01-09
Potential End Date: 2015-01-09 00:00:00
Last Modified: 2025-04-22
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