Raytheon Company received over $45.6M for PATRIOT NEW EQUIPMENT TRAINING from 2015-2017

Contract Overview

Contract Amount: $45,610,426 ($45.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2015-01-09

End Date: 2018-05-30

Contract Duration: 1,237 days

Daily Burn Rate: $36.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: PATRIOT NEW EQUIPMENT TRAINING FY 2015 - 2017

Place of Performance

Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $45.6 million to RAYTHEON COMPANY for work described as: PATRIOT NEW EQUIPMENT TRAINING FY 2015 - 2017 Key points: 1. Training services were procured via a sole-source contract, limiting competitive price discovery. 2. The contract type, Cost Plus Fixed Fee, can incentivize cost overruns. 3. Performance spanned over three years, indicating a substantial training requirement. 4. The training focused on specialized equipment, suggesting a niche but critical need. 5. Geographic focus on Massachusetts for training delivery. 6. No small business set-aside was utilized for this contract.

Value Assessment

Rating: fair

Benchmarking the value for specialized equipment training is challenging without comparable sole-source contracts. The Cost Plus Fixed Fee structure, while common for complex services, carries inherent risks of cost escalation. The fixed fee component provides some cost certainty, but the overall cost-effectiveness is difficult to assess without competitive bids to establish a market price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This typically occurs when a specific contractor possesses unique capabilities or when urgent needs preclude a competitive process. The lack of competition means taxpayers did not benefit from potential cost savings that could arise from multiple bidders vying for the contract.

Taxpayer Impact: Sole-source procurement limits the government's ability to secure the best possible price, potentially leading to higher costs for taxpayers compared to a competed contract.

Public Impact

Personnel within the Department of the Army, specifically those operating or maintaining the PATRIOT missile system, are the primary beneficiaries. The services delivered include essential new equipment training, ensuring operational readiness. Training was primarily conducted in Massachusetts. This contract supports the technical proficiency of military personnel, indirectly impacting the defense workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
Cost Plus Fixed Fee contract type can lead to cost overruns.
Lack of transparency in pricing due to sole-source nature.

Positive Signals

Training provided for critical defense equipment.
Contract duration suggests a sustained need for skilled personnel.
Fixed fee component offers some cost predictability.

Sector Analysis

This contract falls within the broader defense training and education sector, a critical component of military readiness. The market for specialized military equipment training is often dominated by a few key contractors with the requisite expertise and security clearances. Spending in this area is directly tied to the acquisition and fielding of advanced weapon systems, such as the PATRIOT missile defense system.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have significant subcontracting opportunities for small businesses based on the available data. The sole-source nature further reduces the likelihood of small business participation.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Transparency is limited due to the sole-source award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

PATRIOT Missile System Procurement
Military Training Services
Defense Equipment Maintenance and Support

Risk Flags

Sole-source procurement
Cost-reimbursable contract type (CPFF)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $45.6 million to RAYTHEON COMPANY. PATRIOT NEW EQUIPMENT TRAINING FY 2015 - 2017

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 $45.6 million.

What is the period of performance?

Start: 2015-01-09. End: 2018-05-30.

What is Raytheon Company's track record with Department of Defense training contracts?

Raytheon Company, now part of RTX, has a long-standing and extensive history of providing training services and support for various defense systems to the Department of Defense. This includes training for complex platforms like the PATRIOT missile system, which requires specialized technical knowledge. Their track record generally indicates a capacity to deliver required training, though specific performance metrics and cost-effectiveness can vary significantly across individual contracts. The company is a major defense contractor, and its training divisions are integral to its overall service offerings, often involving sole-source or limited-competition awards due to the proprietary nature of the equipment and training.

How does the $45.6 million cost compare to similar PATRIOT training contracts?

Direct comparison of the $45.6 million cost for PATRIOT NEW EQUIPMENT TRAINING (FY 2015-2017) to similar contracts is difficult due to the sole-source nature of this award and the proprietary details of training programs. However, training for advanced defense systems like PATRIOT is inherently expensive, involving highly specialized instructors, equipment, and facilities. Costs can fluctuate based on the number of personnel trained, the duration of training, the specific modules covered, and the location. Without access to other competitive bids or detailed cost breakdowns for comparable training efforts, it's challenging to definitively state whether this contract represented excellent or poor value. The duration of over three years suggests a significant and ongoing training requirement.

What are the primary risks associated with a sole-source Cost Plus Fixed Fee contract for training?

The primary risks associated with a sole-source Cost Plus Fixed Fee (CPFF) contract for training are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher prices than could be achieved in an open market. The government relies heavily on the contractor's proposed costs and fee. Secondly, the CPFF structure, while providing a fixed fee to the contractor, reimburses allowable costs. This can create an incentive for the contractor to incur higher costs, as their fee is a percentage of those costs (though the fee itself is fixed). This risk is mitigated by robust government oversight to ensure costs are allowable, reasonable, and allocable, but it remains a potential area for cost escalation.

How effective is this training likely to be for ensuring operational readiness of the PATRIOT system?

The effectiveness of this training is likely high, given that it is 'new equipment training' for the PATRIOT system, a critical component of U.S. air and missile defense. Such training is specifically designed to equip personnel with the necessary skills to operate, maintain, and employ the system effectively from its introduction. The multi-year duration (over 3 years) suggests a comprehensive program addressing various aspects of the system's lifecycle. The primary beneficiaries are the military personnel directly involved with the PATRIOT system, ensuring they are proficient and ready to deploy the asset, thereby contributing significantly to national security and operational readiness.

What are the historical spending patterns for PATRIOT training by the Department of the Army?

Historical spending patterns for PATRIOT training by the Department of the Army show a consistent and substantial investment over the years, reflecting the ongoing importance and complexity of the PATRIOT system. While specific figures for every fiscal year are not provided here, the total awarded amount of over $45.6 million for the 2015-2017 period indicates a significant expenditure. This spending is driven by the continuous need to train new personnel, requalify existing operators, and incorporate upgrades or modifications to the system. The Army typically procures such specialized training through a mix of contract types, often relying on sole-source or limited-competition awards to the prime contractor, Raytheon, due to their unique expertise.

Industry Classification

NAICS: Educational Services › Technical and Trade Schools › Other Technical and Trade Schools

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W31P4Q14R0059

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: $45,610,426

Exercised Options: $45,610,426

Current Obligation: $45,610,426

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline