DoD Awards Raytheon $56M for Navigation Systems, Lacking Competition

Contract Overview

Contract Amount: $56,153,434 ($56.2M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2014-01-30

End Date: 2020-04-30

Contract Duration: 2,282 days

Daily Burn Rate: $24.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: BASIC AWARD

Place of Performance

Location: MARLBOROUGH, MIDDLESEX County, MASSACHUSETTS, 01752

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $56.2 million to RAYTHEON COMPANY for work described as: BASIC AWARD Key points: 1. Significant award to a major defense contractor. 2. Lack of competition raises concerns about price discovery. 3. Long contract duration (2282 days) may impact cost control. 4. Focus on navigation systems suggests critical operational need.

Value Assessment

Rating: questionable

The Cost Plus Fixed Fee contract type can lead to higher costs if not managed tightly. Without competitive benchmarks, assessing the fairness of the $56M award is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source or limited competition award. This significantly limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The absence of competition means taxpayers may be paying a premium for these navigation systems.

Public Impact

Ensures continued operation of critical military navigation systems. Potential for cost overruns due to non-competitive award. Supports a major defense contractor and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost-plus contract type
Long contract duration

Positive Signals

Essential defense capability
Award to established contractor

Sector Analysis

The Department of Defense frequently procures complex systems for navigation and guidance. Spending in this sector is substantial, with significant investment in advanced technologies.

Small Business Impact

The data indicates this contract was not awarded to a small business. Further analysis would be needed to determine if small businesses were subcontracted.

Oversight & Accountability

The lack of competition suggests potential oversight gaps in the procurement process. Robust oversight is needed to ensure cost reasonableness and effective performance.

Related Government Programs

Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award
Cost-plus contract type
Long contract duration
Lack of transparency on justification
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $56.2 million to RAYTHEON COMPANY. BASIC AWARD

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 $56.2 million.

What is the period of performance?

Start: 2014-01-30. End: 2020-04-30.

What was the justification for not competing this contract, and what measures were in place to ensure a fair price?

The justification for not competing this contract is not provided in the data. Typically, sole-source awards require a detailed justification, such as unique capabilities or urgent need. Without this information, it's impossible to assess the fairness of the price discovery process or the measures taken to ensure cost reasonableness.

What are the specific risks associated with a Cost Plus Fixed Fee contract for navigation systems over a 2282-day period?

Cost Plus Fixed Fee contracts carry inherent risks of cost overruns, as the contractor is reimbursed for allowable costs plus a fixed fee. Over a long duration like 2282 days, the potential for scope creep, unforeseen technical challenges, and inflation can significantly increase the final cost to the government, especially without strong oversight and competitive pressure.

How effective is this contract in delivering the required navigation system capabilities, given the procurement method?

The effectiveness of the contract in delivering capabilities cannot be fully assessed without performance data. However, the non-competitive award method raises concerns about whether the government received the best possible value and technological solution. While the contractor is established, the lack of competition may have limited the exploration of alternative, potentially more effective or cost-efficient, solutions.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W31P4Q13R0027

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 1001 BOSTON POST RD E, MARLBOROUGH, MA, 01752

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: $58,023,419

Exercised Options: $56,153,434

Current Obligation: $56,153,434

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $79,637

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline