DoD Awards $28.8M Engineering Services Contract to Raytheon for Land Based Phalanx Weapon System

Contract Overview

Contract Amount: $28,791,800 ($28.8M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2021-02-24

End Date: 2022-07-02

Contract Duration: 493 days

Daily Burn Rate: $58.4K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: FUNCTIONAL SERVICES FOR THE LAND BASED PHALANX WEAPON SYSTEM

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $28.8 million to RAYTHEON COMPANY for work described as: FUNCTIONAL SERVICES FOR THE LAND BASED PHALANX WEAPON SYSTEM Key points: 1. Contract awarded to a single, large defense contractor, indicating potential lack of competition. 2. Significant funding allocated for engineering services related to a specific weapon system. 3. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not managed carefully. 4. Focus on a critical defense asset suggests high strategic importance.

Value Assessment

Rating: fair

The contract value of $28.8 million for engineering services appears substantial. Benchmarking against similar weapon system support contracts would be necessary to determine if this pricing is competitive, especially given the cost-plus nature.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The 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 procurement.

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

Public Impact

Ensures continued operational readiness and modernization of a key Army weapon system. Supports advanced engineering and technical services critical for defense capabilities. Potential for limited transparency in pricing due to sole-source award.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
Cost-plus contract type carries inherent risk of cost escalation.
Lack of small business participation noted.

Positive Signals

Supports critical defense infrastructure.
Awarded to a known, established defense contractor.
Contract duration aligns with system lifecycle needs.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense systems. Spending benchmarks for similar weapon system sustainment and development contracts are typically in the millions to billions, depending on scope and system maturity.

Small Business Impact

There is no indication of small business participation in this contract. Sole-source awards to large prime contractors often bypass opportunities for small businesses to contribute to critical defense programs.

Oversight & Accountability

Oversight of this sole-source, cost-plus contract is crucial to ensure Raytheon adheres to the fixed fee and manages costs effectively. The Department of the Army's contracting officers must diligently monitor performance and expenditures.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award
Cost-plus contract type
Lack of small business participation
Potential for cost overruns
Limited price competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.8 million to RAYTHEON COMPANY. FUNCTIONAL SERVICES FOR THE LAND BASED PHALANX WEAPON SYSTEM

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 $28.8 million.

What is the period of performance?

Start: 2021-02-24. End: 2022-07-02.

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

The justification for a sole-source award typically involves unique capabilities or urgent needs. For this contract, the Department of Defense would need to document why only Raytheon could provide these specific engineering services for the Land Based Phalanx Weapon System. To ensure fair pricing, mechanisms like cost realism analyses and robust negotiation strategies are employed, though competition inherently provides stronger price validation.

What are the potential risks associated with the Cost Plus Fixed Fee contract type for this system?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is that the contractor is reimbursed for all allowable costs plus a fixed fee representing profit. If costs escalate beyond initial estimates, the government bears the burden. This can lead to budget overruns if cost controls are not rigorously enforced by the contracting agency. The fixed fee itself is intended to incentivize efficiency, but the overall cost is less predictable than fixed-price contracts.

How does this contract contribute to the overall effectiveness and readiness of the Land Based Phalanx Weapon System?

This contract is vital for maintaining and enhancing the operational effectiveness and readiness of the Land Based Phalanx Weapon System. Engineering services likely encompass crucial activities such as system upgrades, maintenance support, troubleshooting, and potentially the integration of new technologies. Without these specialized services, the weapon system's performance could degrade, impacting its ability to fulfill its intended defense mission.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 1151 E HERMANS RD, TUCSON, AZ, 85756

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: $28,791,800

Exercised Options: $28,791,800

Current Obligation: $28,791,800

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W31P4Q19D0015

IDV Type: IDC

Timeline