DoD Awards Raytheon $152M for Qatar Patriot Depot Operations, Not Competed

Contract Overview

Contract Amount: $152,483,288 ($152.5M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2018-03-15

End Date: 2023-11-30

Contract Duration: 2,086 days

Daily Burn Rate: $73.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: AWARD CPFF, FFP, AND CRNF TYPE CONTRACT TO RAYTHEON COMPANY FOR QATAR PATRIOT DEPOT OPERATIONS. POP 15 MARCH 2018 THROUGH 31 JULY 2022.

Place of Performance

Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $152.5 million to RAYTHEON COMPANY for work described as: AWARD CPFF, FFP, AND CRNF TYPE CONTRACT TO RAYTHEON COMPANY FOR QATAR PATRIOT DEPOT OPERATIONS. POP 15 MARCH 2018 THROUGH 31 JULY 2022. Key points: 1. Significant contract value of $152.5M for depot operations. 2. Sole-source award to Raytheon for specialized Patriot missile system support. 3. Potential risk associated with single-source reliance for critical defense infrastructure. 4. Spending falls within the 'Other Guided Missile and Space Vehicle Parts' manufacturing sector.

Value Assessment

Rating: questionable

The contract type (Cost Plus Fixed Fee) can lead to cost overruns. Without competitive bidding, it's difficult to assess if the $152.5M price represents fair value.

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 compared to a competitive process.

Taxpayer Impact: The lack of competition for this significant award raises concerns about potential overspending and inefficient use of taxpayer funds.

Public Impact

Ensures continued operational readiness of the Patriot missile defense system in Qatar. Supports U.S. foreign policy and security interests in the Middle East. Potential for increased costs due to lack of competitive bidding.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Lack of transparency in pricing

Positive Signals

Ensures critical defense capability
Supports strategic ally

Sector Analysis

This contract falls under the 'Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing' sector. Spending in this niche area is often characterized by high barriers to entry and specialized requirements, frequently leading to sole-source awards.

Small Business Impact

The awardee, Raytheon Company, is a large defense contractor. There is no indication that small businesses were involved in this specific contract, either as prime contractors or subcontractors.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny to ensure the Department of Defense obtained the best possible value and that the contractor is performing efficiently and effectively.

Related Government Programs

Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award lacks competition
Cost-plus contract type increases cost risk
Potential for price escalation over contract duration
Limited transparency on pricing justification
Dependency on a single supplier for critical defense asset

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $152.5 million to RAYTHEON COMPANY. AWARD CPFF, FFP, AND CRNF TYPE CONTRACT TO RAYTHEON COMPANY FOR QATAR PATRIOT DEPOT OPERATIONS. POP 15 MARCH 2018 THROUGH 31 JULY 2022.

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 $152.5 million.

What is the period of performance?

Start: 2018-03-15. End: 2023-11-30.

What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair pricing?

The justification for a sole-source award typically stems from unique capabilities or proprietary technology held by a single contractor. For this contract, it's likely related to Raytheon's exclusive role in manufacturing and supporting the Patriot missile system. However, without a competitive process, verifying fair pricing is challenging. The government should have conducted thorough market research and price analysis to establish a reasonable cost baseline.

What are the long-term risks associated with relying on a single contractor for critical depot operations of a major defense system?

Long-term reliance on a sole-source provider for critical defense systems like the Patriot missile depot operations poses several risks. These include potential price escalation over time, reduced incentive for innovation by the contractor, and vulnerability to supply chain disruptions or the contractor's business decisions. It also limits the government's flexibility in adapting to new technologies or seeking alternative support solutions.

How does the cost-plus fixed fee (CPFF) contract type impact the government's ability to control costs for these depot operations?

The Cost Plus Fixed Fee (CPFF) contract type allows the contractor to recover all allowable costs plus a predetermined fixed fee. While the fee provides some incentive for efficiency, it offers less cost control than fixed-price contracts. The government bears the risk of cost overruns, and the contractor has less incentive to minimize expenses beyond what's necessary to achieve the fixed fee. This can lead to higher overall costs for the government.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment 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: W31P4Q17R0077

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: $152,483,288

Exercised Options: $152,483,288

Current Obligation: $152,483,288

Subaward Activity

Number of Subawards: 64

Total Subaward Amount: $3,579,519

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline