Raytheon Company awarded $122M for Sentinel A3 radar kits, with no competition

Contract Overview

Contract Amount: $122,292,491 ($122.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2018-12-19

End Date: 2025-12-31

Contract Duration: 2,569 days

Daily Burn Rate: $47.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ACQUISITION OF A PRODUCTION CONTRACT FOR A QUANTITY OF 199 SENTINEL A3 RADAR SIGNAL DATA PROCESSOR KITS AND INSTALLATION.

Place of Performance

Location: FULLERTON, ORANGE County, CALIFORNIA, 92834

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $122.3 million to RAYTHEON COMPANY for work described as: ACQUISITION OF A PRODUCTION CONTRACT FOR A QUANTITY OF 199 SENTINEL A3 RADAR SIGNAL DATA PROCESSOR KITS AND INSTALLATION. Key points: 1. The contract value of $122.3 million represents a significant investment in advanced radar signal processing capabilities. 2. The absence of competition raises questions about potential price inflation and the exploration of alternative solutions. 3. The long performance period of over 6 years suggests a substantial and ongoing need for these systems. 4. This acquisition falls within the defense sector, specifically focusing on advanced sensor and navigation technology. 5. The firm-fixed-price contract type aims to provide cost certainty for the government, though it relies on accurate initial estimates. 6. The sole awardee, Raytheon Company, indicates a specialized capability or existing relationship for this particular system.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive bids. The firm-fixed-price structure suggests an expectation of cost control, but without comparison to other offers, it's difficult to ascertain if the $122.3 million represents a fair market price. The government's reliance on a single source may have led to a higher price than could have been achieved through a competitive process. Further analysis would require understanding the specific technological advancements and unique capabilities of the Sentinel A3 system.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Raytheon Company, was solicited. This approach is typically used when a unique capability is required, or when only one responsible source can provide the product or service. The lack of competition limits the government's ability to leverage market forces to drive down costs and ensure the best possible value. It also suggests that alternative solutions or suppliers were not considered or available.

Taxpayer Impact: Taxpayers may be paying a premium for this system due to the absence of competitive pressure. Without multiple bids, there is less incentive for the contractor to offer the lowest possible price.

Public Impact

The primary beneficiaries are the Department of the Army, which will receive advanced radar signal processing kits. The services delivered include the acquisition of 199 Sentinel A3 radar signal data processor kits and their installation. The contract is associated with a specific geographic location in California for installation, indicating a localized impact. This acquisition supports the modernization of military surveillance and detection capabilities, enhancing national security.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source awards can limit innovation by not exploring alternative solutions.
Long contract duration could mask inefficiencies if not closely monitored.
Dependence on a single contractor creates supply chain risk.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Acquisition of advanced radar technology enhances critical defense capabilities.
Specific system (Sentinel A3) likely addresses a unique and validated requirement.

Sector Analysis

The defense electronics sector is characterized by high research and development costs, stringent performance requirements, and long product lifecycles. Companies like Raytheon operate in a market driven by government procurement, where contracts are often awarded based on technological superiority and proven reliability. The market for radar systems is specialized, with a limited number of prime contractors capable of delivering such sophisticated equipment. This contract fits within the broader trend of defense modernization, focusing on advanced sensor technologies to maintain a strategic advantage.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. There is no explicit mention of subcontracting goals for small businesses. This suggests that the primary contract is likely being fulfilled by the large prime contractor, Raytheon Company, and opportunities for small businesses may be limited to direct supply chain roles or specific components, rather than prime contracting.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. The firm-fixed-price nature of the contract implies a focus on delivery and performance against agreed-upon specifications. Transparency is generally maintained through contract award databases, but detailed operational oversight and performance reviews are internal government functions. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Army Aviation Systems
Intelligence, Surveillance, and Reconnaissance (ISR) Platforms
Advanced Radar Systems
Defense Electronics Manufacturing

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Long-term dependency on a single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $122.3 million to RAYTHEON COMPANY. ACQUISITION OF A PRODUCTION CONTRACT FOR A QUANTITY OF 199 SENTINEL A3 RADAR SIGNAL DATA PROCESSOR KITS AND INSTALLATION.

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 $122.3 million.

What is the period of performance?

Start: 2018-12-19. End: 2025-12-31.

What is the specific technological advantage offered by the Sentinel A3 radar signal processor kit that justifies a sole-source award?

The Sentinel A3 radar signal processor kit likely incorporates proprietary technology or advanced capabilities that are unique to Raytheon's development. This could include enhanced signal processing algorithms for improved target detection in complex environments, reduced false alarm rates, superior data fusion capabilities, or specific integration requirements with existing Army platforms. Sole-source justification often hinges on factors such as unique intellectual property, specialized manufacturing processes, or a critical need for interoperability with existing systems where only one vendor can meet the precise specifications. Without access to the government's sole-source justification documentation, the exact technical differentiators remain proprietary.

How does the $122.3 million contract value compare to similar radar system procurements by the Department of Defense?

Direct comparison of this contract's value is difficult without knowing the exact specifications and quantities of comparable radar systems. However, the $122.3 million for 199 kits suggests a unit cost of approximately $614,500 per kit, including installation. This figure needs to be contextualized by the complexity and capabilities of the Sentinel A3 system. Larger, more comprehensive radar platforms (e.g., airborne surveillance radars) can cost hundreds of millions or even billions. Conversely, simpler ground-based or specialized sensor components might be less expensive. The absence of competitive bids prevents a direct value-for-money assessment against alternative market offerings.

What are the potential risks associated with a sole-source award for critical defense technology like the Sentinel A3 system?

The primary risk of a sole-source award is the potential for inflated pricing due to the lack of competitive pressure. The government may not achieve the best possible value. Another risk is vendor lock-in, where the government becomes overly reliant on a single supplier, potentially limiting future flexibility and innovation. There's also a risk if the sole-source provider experiences financial difficulties or production issues, as there are no immediate alternative suppliers. Furthermore, the absence of competition can reduce the incentive for the contractor to maintain high levels of efficiency and quality over the contract's duration.

What is Raytheon Company's track record with the Department of Defense for similar radar or signal processing systems?

Raytheon Company is a major defense contractor with extensive experience in developing and producing a wide range of radar, sensor, and electronic warfare systems for the Department of Defense and allied nations. They have a long history of delivering complex systems across various platforms, including ground-based, airborne, and naval applications. Their portfolio includes well-known systems like the Patriot missile defense system, various airborne radar platforms (e.g., APG series), and electronic warfare suites. Their track record generally indicates a strong capability in advanced electronics and systems integration, though like any large contractor, specific program performance can vary.

What is the historical spending trend for radar signal processing systems within the Department of the Army?

Historical spending on radar signal processing systems by the Department of the Army has been substantial and generally increasing, driven by the need for enhanced situational awareness, intelligence gathering, and precision targeting. Investments are often tied to modernization programs aimed at upgrading legacy systems and fielding new capabilities to counter evolving threats. Spending fluctuates based on specific program lifecycles, technological advancements, and budgetary allocations. While precise figures for 'radar signal processing systems' as a distinct category can be difficult to isolate from broader radar or electronic systems procurement, it represents a critical and consistently funded area within the Army's R&D and procurement budgets.

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: ELECTRICAL/ELECTRONIC EQPT COMPNTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W31P4Q18R0017

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

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: $122,292,491

Exercised Options: $122,292,491

Current Obligation: $122,292,491

Subaward Activity

Number of Subawards: 61

Total Subaward Amount: $252,599,106

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline