Raytheon awarded $22.7M for Sentinel Radar in Latvia, part of European Reassurance Initiative

Contract Overview

Contract Amount: $22,700,892 ($22.7M)

Contractor: Raytheon Command & Control Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2015-09-24

End Date: 2016-09-30

Contract Duration: 372 days

Daily Burn Rate: $61.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SENTINEL RADAR CONTRACT FOR LATVIA, PART OF THE POTUS EUROPEAN REASSURANCE INITIAVE USING TITLE US CODE 10 FUNDING.

Place of Performance

Location: FULLERTON, ORANGE County, CALIFORNIA, 92833

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $22.7 million to RAYTHEON COMMAND & CONTROL SOLUTIONS LLC for work described as: SENTINEL RADAR CONTRACT FOR LATVIA, PART OF THE POTUS EUROPEAN REASSURANCE INITIAVE USING TITLE US CODE 10 FUNDING. Key points: 1. Contract awarded using Title 10 funding, indicating a national security focus. 2. The firm-fixed-price contract type suggests predictable costs for the government. 3. Awarded to Raytheon Command & Control Solutions LLC, a major defense contractor. 4. The contract duration was relatively short at 372 days. 5. This award falls under the Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing industry. 6. The contract was not competed, raising questions about potential price discovery. 7. The value of the contract is modest within the broader defense spending landscape.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without comparable sole-source awards for similar radar systems in the same region. However, the $22.7 million price tag for a definitive contract of this nature suggests a significant investment. The firm-fixed-price structure aims to control costs, but the lack of competition means there's no direct market comparison to assess if the price was optimal. Further analysis would require understanding the specific capabilities and components of the Sentinel radar system and comparing its cost to similar systems procured through competitive means.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, meaning it was awarded directly to Raytheon Command & Control Solutions LLC without soliciting bids from other potential suppliers. This approach is often used when a specific capability is required that only one contractor can provide, or in urgent situations. However, the absence of a competitive bidding process limits the government's ability to ensure it is receiving the best possible price and value. Without multiple offers, it is difficult to ascertain if alternative solutions or lower prices were available in the market.

Taxpayer Impact: For taxpayers, a sole-source award means there is a reduced likelihood of benefiting from competitive pricing. The government may have paid a premium compared to what could have been achieved through an open competition, potentially leading to less efficient use of public funds.

Public Impact

The primary beneficiaries are the U.S. Department of Defense and allied nations, specifically Latvia, through enhanced surveillance capabilities. The contract delivers a Sentinel radar system, crucial for air and missile defense. The geographic impact is focused on Eastern Europe, supporting the European Reassurance Initiative. The contract supports the defense industrial base, particularly in advanced radar technology manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have led to a higher price than a competed contract.
Sole-source awards can reduce transparency and accountability in the procurement process.
Reliance on a single contractor for critical defense systems can create long-term dependencies.

Positive Signals

The contract supports a critical national security initiative (European Reassurance Initiative).
The firm-fixed-price contract type provides cost certainty for the government.
Awarding to a known, experienced contractor like Raytheon can reduce performance risk.

Sector Analysis

The defense sector, particularly in radar and surveillance technology, is characterized by high R&D costs and long development cycles. Major defense contractors like Raytheon are key players in this market. Spending on such systems is often driven by geopolitical considerations and the need to maintain technological superiority. Comparable spending benchmarks would involve looking at other radar system procurements by the Department of Defense or allied nations, though direct comparisons are difficult due to system-specific requirements and the nature of sole-source awards.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor is a large defense corporation. While large prime contractors are often required to subcontract a portion of their work to small businesses, the specific subcontracting plan for this contract is not detailed here. The absence of a direct set-aside means small businesses were not specifically targeted for this prime contract award.

Oversight & Accountability

Oversight for this Department of Defense contract would typically fall under the purview of the Department of the Army's contracting command and potentially the Department of Defense Inspector General. Transparency is limited due to the sole-source nature of the award. Accountability measures would be embedded in the contract's terms and conditions, including performance standards and payment schedules. The Inspector General's office may conduct audits or investigations into the procurement process and contract performance if specific concerns arise.

Related Government Programs

European Reassurance Initiative
Foreign Military Sales
Air and Missile Defense Systems
Department of Defense Procurement

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.7 million to RAYTHEON COMMAND & CONTROL SOLUTIONS LLC. SENTINEL RADAR CONTRACT FOR LATVIA, PART OF THE POTUS EUROPEAN REASSURANCE INITIAVE USING TITLE US CODE 10 FUNDING.

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMMAND & CONTROL SOLUTIONS LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $22.7 million.

What is the period of performance?

Start: 2015-09-24. End: 2016-09-30.

What is the specific operational capability provided by the Sentinel radar system awarded under this contract?

The Sentinel radar system is a mobile, C-band, phased-array radar designed for detecting and tracking airborne threats, including cruise missiles, aircraft, and unmanned aerial vehicles. It plays a crucial role in air and missile defense by providing early warning and situational awareness. For the European Reassurance Initiative, its deployment in Latvia enhances NATO's defensive posture in Eastern Europe by extending radar coverage and improving the ability to detect and respond to potential aerial incursions or threats originating from the East. The system's mobility allows for rapid deployment to support evolving operational requirements.

How does the $22.7 million contract value compare to other Sentinel radar procurements or similar systems?

Directly comparing the $22.7 million value of this sole-source contract to other Sentinel radar procurements is difficult without access to detailed pricing data for similar systems, especially given the 'not competed' status. However, the Sentinel system is a sophisticated piece of military hardware. The value reflects the cost of the radar system itself, associated support, and potentially integration services. Without competitive bids, it's hard to establish a precise market benchmark. Generally, advanced radar systems can range from tens to hundreds of millions of dollars depending on their capabilities, quantity, and support packages. This specific award appears to be for a single system or a limited number of units, given the total value and duration.

What are the potential risks associated with awarding a sole-source contract for critical defense equipment like the Sentinel radar?

The primary risk of a sole-source award is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government may not achieve the best possible value for its investment. Another risk is reduced innovation, as there's less incentive for the sole provider to offer cost-saving improvements or alternative solutions. Furthermore, sole-source contracts can create a dependency on a single supplier, potentially limiting future flexibility and increasing long-term costs if the contractor leverages their unique position. There's also a potential for reduced transparency in the procurement process, making it harder to scrutinize the justification for the award and the pricing.

What is Raytheon's track record with the Sentinel radar system and similar defense contracts?

Raytheon, now RTX, has a long and established track record in developing and manufacturing advanced radar systems, including the Sentinel program. They have been a primary contractor for various iterations and upgrades of the Sentinel radar for the U.S. Army and allied nations. Their experience extends to other complex defense systems, including air and missile defense technologies. Raytheon has consistently been a major recipient of defense contracts, indicating a strong performance history and deep expertise in the field. However, like any large defense contractor, they have also faced scrutiny over contract costs and performance on specific programs, necessitating robust government oversight.

How does this contract fit into the broader context of U.S. defense spending in Eastern Europe?

This contract is a component of the broader U.S. strategy to enhance security and stability in Eastern Europe, particularly in response to geopolitical tensions. The European Reassurance Initiative (ERI), later integrated into the European Defense Initiative, represents a significant commitment of resources to bolster NATO allies' defense capabilities. Spending in this region includes military exercises, prepositioned equipment, infrastructure improvements, and the procurement of advanced defense systems like the Sentinel radar. This specific award contributes to strengthening air defense capabilities, a key priority for deterring aggression and ensuring regional security. It reflects a sustained U.S. investment in its European allies.

What are the implications of using Title 10 funding for this contract?

Using Title 10 of the U.S. Code funding signifies that this procurement is authorized under the general provisions governing the armed forces. This type of funding is typically used for activities related to national defense, military operations, and the procurement of defense equipment and services. For this contract, it underscores that the Sentinel radar system for Latvia is considered a critical national security asset, supporting U.S. defense objectives and commitments to its allies. It also means the procurement process must adhere to the regulations and oversight mechanisms stipulated within Title 10, ensuring it aligns with military requirements and strategic priorities.

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: W31P4Q15R0101

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp (UEI: 001344142)

Address: 1801 HUGHES DR, FULLERTON, CA, 92833

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: $22,700,892

Exercised Options: $22,700,892

Current Obligation: $22,700,892

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $34,560

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline