DoD Awards $67.6M Logistics Contract for Phalanx Weapon System to Raytheon Company

Contract Overview

Contract Amount: $67,641,460 ($67.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2013-04-12

End Date: 2019-01-06

Contract Duration: 2,095 days

Daily Burn Rate: $32.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THIS CONTRACT IS FOR LAND-BASED PHALANX WEAPON SYSTEM LOGISTICS SUPPORT.

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $67.6 million to RAYTHEON COMPANY for work described as: THIS CONTRACT IS FOR LAND-BASED PHALANX WEAPON SYSTEM LOGISTICS SUPPORT. Key points: 1. Significant contract value for specialized defense logistics. 2. Sole-source award to Raytheon Company raises questions about competition. 3. Long contract duration (2013-2019) suggests ongoing support needs. 4. Engineering services (NAICS 541330) indicate complex technical requirements.

Value Assessment

Rating: questionable

The contract value of $67.6M over approximately 6 years for logistics support is substantial. Benchmarking is difficult without specific details on the services provided, but the lack of competition suggests potential for overpricing.

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 limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The lack of competition in this sole-source award may result in higher costs for taxpayers compared to a competitively bid contract.

Public Impact

Ensures continued operational readiness of the Phalanx weapon system. Supports critical defense capabilities for the Department of the Army. Potential for taxpayer funds to be used inefficiently due to sole-source nature.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Cost-plus contract type

Positive Signals

Ensures critical system support
Long-term relationship with incumbent provider

Sector Analysis

This contract falls within the Defense sector, specifically for engineering services related to weapon system logistics. Spending in this area is often high due to the specialized nature and critical importance of military equipment.

Small Business Impact

There is no indication that small businesses were involved in this contract, as it was a sole-source award to a large prime contractor, Raytheon Company.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny to ensure fair pricing and efficient use of taxpayer funds. Further oversight may be needed to justify the lack of competition.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award
Lack of competition
Cost-plus contract type
Potential for cost overruns
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $67.6 million to RAYTHEON COMPANY. THIS CONTRACT IS FOR LAND-BASED PHALANX WEAPON SYSTEM LOGISTICS SUPPORT.

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 $67.6 million.

What is the period of performance?

Start: 2013-04-12. End: 2019-01-06.

What specific logistics support services were provided under this contract, and how do they justify the $67.6M cost?

The contract is for logistics support of the Land-Based Phalanx Weapon System. This likely includes maintenance, repair, spare parts management, technical support, and potentially training. The high cost is attributed to the specialized nature of military hardware, the complexity of maintaining advanced weapon systems, and the long duration of the contract, coupled with the lack of competitive bidding which can inflate prices.

What are the risks associated with a sole-source, cost-plus fixed fee contract for weapon system logistics?

The primary risks include inflated costs due to the absence of competition, potential for contractor inefficiency as profit is not directly tied to cost savings, and reduced transparency. The government bears more risk in cost-plus contracts, as the final price is not fixed upfront, making it harder to control expenditures and ensure value for money.

How effective is this contract in ensuring the operational readiness of the Phalanx weapon system for the Department of the Army?

Assuming Raytheon Company provided the contracted services effectively, the contract is likely effective in maintaining the operational readiness of the Phalanx system. The long duration and sole-source nature suggest a proven, albeit potentially expensive, relationship. However, effectiveness could be improved through competitive processes to ensure optimal resource allocation and potentially better service terms.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

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: 1151 E HERMANS RD, TUCSON, AZ, 85756

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: $110,859,960

Exercised Options: $67,641,460

Current Obligation: $67,641,460

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $4,046,921

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline