Raytheon Company awarded $44.6M for Egyptian air defense radar systems, training, and support

Contract Overview

Contract Amount: $44,634,441 ($44.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2017-11-16

End Date: 2020-02-06

Contract Duration: 812 days

Daily Burn Rate: $55.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 8 SENTINEL AN/MPQ-64F1 RADARS AND RELATED EQUIPMENT, TRAINING AND SUPPORT FOR EGYPT.

Place of Performance

Location: FULLERTON, ORANGE County, CALIFORNIA, 92833

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $44.6 million to RAYTHEON COMPANY for work described as: 8 SENTINEL AN/MPQ-64F1 RADARS AND RELATED EQUIPMENT, TRAINING AND SUPPORT FOR EGYPT. Key points: 1. Contract awarded to a single, established defense contractor, indicating potential for limited competition. 2. The firm-fixed-price contract type suggests a defined scope and cost structure. 3. The duration of the contract (812 days) indicates a medium-term commitment for support and training. 4. This award falls under the Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing sector. 5. The contract's focus on foreign military sales highlights international defense cooperation.

Value Assessment

Rating: fair

Benchmarking the value of this specific foreign military sale is challenging due to unique geopolitical factors and specific equipment configurations. However, the total award of $44.6 million for eight radar systems, training, and support suggests a significant investment. Without comparable international sales data or detailed cost breakdowns, a precise value-for-money assessment is difficult. The fixed-price nature provides some cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is often used for specialized defense equipment where a single contractor possesses the unique capabilities or existing system knowledge required. The lack of competition means that price discovery through market forces was not utilized, potentially leading to higher costs than if multiple bids were solicited.

Taxpayer Impact: Taxpayers may bear a higher cost due to the absence of competitive bidding. The government relied on negotiation rather than market forces to determine the price.

Public Impact

The primary beneficiary is the Egyptian military, which receives advanced air defense radar capabilities. Services delivered include the provision of eight AN/MPQ-64F1 radar systems, associated training, and ongoing support. The geographic impact is focused on Egypt, enhancing its national security and air defense posture. Workforce implications may include specialized technical roles for installation, training, and maintenance, potentially involving both U.S. and local personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially impacting cost-effectiveness.
Lack of transparency in the sole-source justification process.
Dependence on a single contractor for critical defense technology.

Positive Signals

Award to a reputable defense contractor with a proven track record.
Provision of essential defense equipment to a key international partner.
Firm-fixed-price contract offers cost predictability.

Sector Analysis

The defense industry, particularly the segment focused on radar and electronic warfare systems, is characterized by high barriers to entry and significant R&D investment. Companies like Raytheon are major players in this specialized market. This contract fits within the broader landscape of U.S. foreign military sales, which aim to bolster the defense capabilities of allied nations. Comparable spending benchmarks are difficult to establish due to the specific nature of the equipment and the foreign sales context.

Small Business Impact

This contract does not appear to involve small business set-asides, as it was awarded directly to Raytheon Company. There is no explicit information regarding subcontracting plans for small businesses within this award. The focus is on a large, prime defense contractor delivering a complex system.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and acquisition processes, including the Defense Contract Management Agency (DCMA). Accountability measures are inherent in the contract terms, particularly the firm-fixed-price structure. Transparency is limited due to the sole-source nature of the award, with details often classified or restricted for foreign military sales.

Related Government Programs

Foreign Military Sales Program
Air and Missile Defense Systems
Radar Systems Manufacturing
Defense Equipment Procurement

Risk Flags

Sole-source procurement
Potential for higher cost due to lack of competition
Limited public data on specific performance benchmarks

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.6 million to RAYTHEON COMPANY. 8 SENTINEL AN/MPQ-64F1 RADARS AND RELATED EQUIPMENT, TRAINING AND SUPPORT FOR EGYPT.

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 $44.6 million.

What is the period of performance?

Start: 2017-11-16. End: 2020-02-06.

What is Raytheon Company's track record with similar foreign military sales of radar systems?

Raytheon Company, now part of RTX, has a long and extensive history of providing advanced defense systems, including radar and air defense solutions, to numerous international partners through the U.S. Foreign Military Sales (FMS) program. They have supplied various radar types, such as Patriot and THAAD components, as well as specialized systems like the AN/MPQ-64 Sentinel, which is similar to the AN/MPQ-64F1 mentioned. Their track record generally indicates successful delivery of complex systems and associated training and support, often involving significant value contracts. However, specific performance metrics and cost overruns on past FMS contracts are not always publicly disclosed, making a detailed comparison difficult without access to internal government assessments or classified reporting.

How does the cost per radar system compare to other similar procurements, either domestic or international?

Determining a precise per-unit cost comparison for the eight AN/MPQ-64F1 radar systems is challenging without a detailed breakdown of the $44.6 million award. The total includes not only the hardware but also training and support, which can represent a significant portion of the contract value. Furthermore, foreign military sales often include additional costs related to logistics, country-specific modifications, and program management overhead that differ from domestic procurements. Generally, specialized military hardware procured through sole-source channels for international clients tends to be more expensive than comparable systems acquired through highly competitive domestic processes due to these factors and the lack of competitive pricing pressure.

What are the primary risks associated with a sole-source award for critical defense equipment?

The primary risks associated with a sole-source award for critical defense equipment like the AN/MPQ-64F1 radar systems include potential overpricing due to the absence of competitive bidding, reduced incentive for the contractor to innovate or improve efficiency, and a lack of market validation for the chosen solution. There's also a risk of vendor lock-in, where the acquiring entity becomes dependent on a single supplier for sustainment, upgrades, and spare parts, potentially leading to higher long-term costs. Furthermore, sole-source justifications can sometimes be perceived as lacking transparency, raising concerns about the procurement process itself, although in defense contexts, national security requirements often necessitate such awards.

How effective is the AN/MPQ-64F1 radar system in its intended role of air defense?

The AN/MPQ-64F1 is a variant of the Sentinel radar, a highly capable X-band, three-dimensional, phased-array radar designed for air defense operations. It is specifically intended to detect and track low-flying aircraft, cruise missiles, and unmanned aerial systems (UAS). Its primary role is to provide early warning and target acquisition for short-range air defense weapon systems, such as the Stinger missile. Reports and military assessments generally indicate that the Sentinel family of radars is effective in its intended operational environment, providing crucial battlefield awareness. Its performance in various exercises and deployments has been documented, highlighting its ability to operate in complex electromagnetic environments and provide accurate tracking data.

What has been the historical spending trend for similar radar systems procured by the Department of Defense or through FMS?

Historical spending on radar systems by the Department of Defense and through Foreign Military Sales (FMS) has been substantial, reflecting the critical role of advanced sensor technology in modern warfare. For medium-range air defense radars like the AN/MPQ-64 family, individual system costs can range from several million to tens of millions of dollars, depending on the specific configuration, quantity, and support package. FMS procurements often involve higher per-unit costs compared to domestic buys due to factors like program management, unique country requirements, and less competitive bidding. Over the past decade, spending on advanced radar and electronic warfare systems has remained a priority, with significant investments made in upgrading existing platforms and acquiring new capabilities for both U.S. forces and allied nations.

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: W31P4Q17R0091

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1801 HUGHES DR, FULLERTON, CA, 92834

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: $44,634,441

Exercised Options: $44,634,441

Current Obligation: $44,634,441

Subaward Activity

Number of Subawards: 11

Total Subaward Amount: $2,111,901

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline