DoD Awards $117M Raytheon Contract for Foreign Military Sales Repair, Lacking Competition
Contract Overview
Contract Amount: $117,053,648 ($117.1M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2013-06-27
End Date: 2021-03-31
Contract Duration: 2,834 days
Daily Burn Rate: $41.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: IGF::OT::IGF NEW REPAIR AND RETURN CONTRACT FOR FORIEGN MILITARY SALES (FMS).
Place of Performance
Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810
Plain-Language Summary
Department of Defense obligated $117.1 million to RAYTHEON COMPANY for work described as: IGF::OT::IGF NEW REPAIR AND RETURN CONTRACT FOR FORIEGN MILITARY SALES (FMS). Key points: 1. Significant contract value of $117M for repair services. 2. Sole-source award to Raytheon Company raises competition concerns. 3. Long contract duration (2013-2021) suggests potential for price creep. 4. Focus on Foreign Military Sales (FMS) indicates international implications.
Value Assessment
Rating: questionable
The contract type is Cost Plus Fixed Fee, which can lead to higher costs as the contractor is reimbursed for expenses plus a fixed fee. Without competitive bidding, it's difficult to assess if the pricing is reasonable compared to market rates for similar repair services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Raytheon Company. This lack of competition limits price discovery and may result in higher costs for the government and FMS customers.
Taxpayer Impact: The absence of competition for a contract of this magnitude could lead to taxpayers bearing higher costs than if the services were procured through a competitive process.
Public Impact
Impacts foreign military sales, potentially affecting international relations and defense capabilities. Lack of transparency in pricing due to sole-source award. Potential for increased costs for allied nations purchasing defense equipment and services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Long contract duration
Positive Signals
- Supports Foreign Military Sales objectives
- Established contractor with likely relevant expertise
Sector Analysis
This contract falls under 'Other Electronic Component Manufacturing' (NAICS 334419). Spending in this sector can vary widely based on technological advancements and defense needs. The $117M award is substantial for this specific sub-sector.
Small Business Impact
The data indicates this contract was awarded to Raytheon Company, a large business. There is no indication of small business participation in this sole-source award, which is a missed opportunity for small business engagement.
Oversight & Accountability
The sole-source nature of this contract warrants further oversight to ensure fair pricing and prevent potential cost overruns. Accountability for the justification of the non-competitive award is crucial.
Related Government Programs
- Other Electronic Component Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Lack of competition
- Potential for cost overruns
- Limited transparency in pricing
- Dependency on a single contractor
- No small business participation
Tags
other-electronic-component-manufacturing, department-of-defense, ma, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $117.1 million to RAYTHEON COMPANY. IGF::OT::IGF NEW REPAIR AND RETURN CONTRACT FOR FORIEGN MILITARY SALES (FMS).
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 $117.1 million.
What is the period of performance?
Start: 2013-06-27. End: 2021-03-31.
What was the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs that only one contractor can fulfill. Without specific documentation, it's impossible to confirm the exact reason, but it's a critical factor in assessing the value and necessity of this contract.
How does the Cost Plus Fixed Fee structure impact the overall cost-effectiveness of this repair contract?
Cost Plus Fixed Fee contracts reimburse the contractor for allowable costs plus a predetermined fixed fee. While it incentivizes completion, it can lead to higher costs if the contractor's expenses are not tightly managed or if the fixed fee is excessive. This structure, especially without competition, raises concerns about cost efficiency.
What are the long-term implications of relying on a single, non-competed contractor for critical FMS repair services?
Long-term reliance on a sole-source provider can stifle innovation, reduce flexibility, and potentially lead to price escalation over time. It also creates a dependency that could be problematic if the contractor's performance declines or if market conditions change, impacting the readiness and capabilities of allied nations.
Industry Classification
NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Other Electronic Component Manufacturing
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: RTX Corp
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: $176,810,011
Exercised Options: $117,053,648
Current Obligation: $117,053,648
Actual Outlays: $44,732
Subaward Activity
Number of Subawards: 146
Total Subaward Amount: $61,021,666
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2013-06-27
Current End Date: 2021-03-31
Potential End Date: 2021-03-31 12:03:00
Last Modified: 2022-03-16
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