DoD Awards $41.6M Follow-On Contract for Patriot Missile Repair to Raytheon Company

Contract Overview

Contract Amount: $41,598,407 ($41.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2017-02-01

End Date: 2020-01-31

Contract Duration: 1,094 days

Daily Burn Rate: $38.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::CL,CT::IGF AWARD OF A NEW FOLLOW-ON CONTRACT FOR PATRIOT MAJOR ITEM REPAIRMAN

Place of Performance

Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $41.6 million to RAYTHEON COMPANY for work described as: IGF::CL,CT::IGF AWARD OF A NEW FOLLOW-ON CONTRACT FOR PATRIOT MAJOR ITEM REPAIRMAN Key points: 1. Awarded to a single, established contractor for a critical defense system. 2. Lack of competition raises questions about price discovery and potential overspending. 3. The contract supports the manufacturing of guided missiles and space vehicles. 4. High value suggests significant taxpayer investment in national defense capabilities.

Value Assessment

Rating: questionable

The contract value of $41.6 million for major item repair of Patriot missiles is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential market rates for similar specialized repair services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and may result in higher costs for taxpayers as there was no opportunity for other qualified vendors to offer competitive pricing.

Taxpayer Impact: The lack of competition in this sole-source award means taxpayers may be paying a premium for essential defense repair services, as market forces were not leveraged to ensure the best possible price.

Public Impact

Ensures continued operational readiness of the Patriot missile defense system. Supports high-tech manufacturing jobs within the defense sector. Contributes to national security by maintaining critical military hardware.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition
Potential for inflated costs due to lack of bidding
Long contract duration (1094 days)

Positive Signals

Supports critical defense system
Awarded to established prime contractor
Ensures system availability

Sector Analysis

This contract falls within the Defense sector, specifically for Guided Missile and Space Vehicle Manufacturing. Spending benchmarks for major item repair in this specialized area are often high due to technical complexity and limited qualified providers.

Small Business Impact

The data indicates this contract was not awarded to small businesses (sb: false). The prime contractor, Raytheon Company, is a large aerospace and defense firm, suggesting no direct benefit to small business suppliers through this specific award.

Oversight & Accountability

As a follow-on contract for a major defense system, it likely falls under existing oversight mechanisms within the Department of Defense and the Defense Contract Management Agency. However, the sole-source nature warrants scrutiny to ensure fair pricing.

Related Government Programs

Guided Missile and Space Vehicle Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for cost overruns
High contract value
No small business participation noted

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.6 million to RAYTHEON COMPANY. IGF::CL,CT::IGF AWARD OF A NEW FOLLOW-ON CONTRACT FOR PATRIOT MAJOR ITEM REPAIRMAN

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $41.6 million.

What is the period of performance?

Start: 2017-02-01. End: 2020-01-31.

What is the justification for the sole-source award, and what steps were taken to ensure fair and reasonable pricing?

The justification for a sole-source award typically involves unique capabilities, critical need, or lack of alternatives. For this contract, the agency should have conducted a thorough market analysis to confirm no other sources could meet the requirements. Price reasonableness would be assessed through cost analysis, comparison to historical data, or other established methods to mitigate the absence of competition.

How does the cost of this follow-on contract compare to previous repair contracts for the Patriot system, considering inflation and scope changes?

Comparing the cost requires access to historical contract data for the Patriot system's repair. Factors like inflation, changes in the scope of work, material costs, and labor rates need to be accounted for. A detailed cost-variance analysis against prior awards, adjusted for economic factors, would reveal if the current $41.6 million award represents a fair increase or a potential escalation due to non-competitive pricing.

What is the long-term strategy for ensuring competitive sourcing for essential Patriot missile repair services?

The long-term strategy should focus on fostering competition for future repair needs. This could involve breaking down the requirement into smaller, more manageable contracts, encouraging new entrants into the market, or developing alternative repair capabilities. Proactive market research and strategic sourcing initiatives are crucial to avoid perpetual sole-source awards and ensure cost-effectiveness.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W31P4Q16R0035

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

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: $65,807,543

Exercised Options: $41,598,407

Current Obligation: $41,598,407

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $201,488

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline