DoD Awards $17.45M Engineering Services Contract to Raytheon Company, Lacking Competition

Contract Overview

Contract Amount: $17,451,364 ($17.5M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2022-03-08

End Date: 2026-06-30

Contract Duration: 1,575 days

Daily Burn Rate: $11.1K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: STINGER ENGINEERING SERVICES

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $17.5 million to RAYTHEON COMPANY for work described as: STINGER ENGINEERING SERVICES Key points: 1. Significant contract value of $17.45 million awarded. 2. Sole-source award to Raytheon Company raises competition concerns. 3. Contract duration extends to June 2026, indicating long-term need. 4. Engineering services sector is critical for defense operations.

Value Assessment

Rating: questionable

The contract's Cost Plus Fixed Fee (CPFF) structure can lead to cost overruns if not managed tightly. Without competitive bidding, it's difficult to benchmark pricing against similar services, making value assessment challenging.

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. This significantly limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive procurement.

Taxpayer Impact: The lack of competition for this $17.45 million contract may result in taxpayers paying a premium for engineering services.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. The long-term nature of the contract raises questions about sustained need and potential for future sole-source awards. Dependence on a single contractor for critical engineering services could pose a risk.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Lack of small business participation

Positive Signals

Awarded to a reputable contractor
Addresses critical engineering needs

Sector Analysis

This contract falls within the engineering services sector, which is vital for defense readiness and technological advancement. Benchmarks for similar services are hard to establish due to the sole-source nature, but competitive bids typically yield better value.

Small Business Impact

The data indicates no specific provision or award to small businesses under this contract. This sole-source award to a large corporation like Raytheon Company misses an opportunity to support small business participation in defense contracting.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny from oversight bodies to ensure the government received fair value and that competition was appropriately waived. Robust contract management will be crucial for the CPFF structure.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award limits competition and potentially increases cost.
Cost-plus contract type carries inherent risk of cost overruns.
No indication of small business participation.
Long contract duration may not reflect current market conditions.
Lack of transparency in price discovery.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.5 million to RAYTHEON COMPANY. STINGER ENGINEERING SERVICES

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 $17.5 million.

What is the period of performance?

Start: 2022-03-08. End: 2026-06-30.

What is the justification for awarding this significant engineering services contract on a sole-source basis, and were alternative competitive strategies considered?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of market availability. Without further details, it's unclear why competitive bidding was bypassed. Agencies must demonstrate that competition was not feasible or would not result in the best value to the government.

How will the Department of Defense ensure cost control and fair pricing under this Cost Plus Fixed Fee (CPFF) contract, given the absence of competition?

Effective cost control under a CPFF contract relies heavily on robust government oversight, detailed cost monitoring, and clear performance metrics. The contracting officer must diligently review incurred costs and ensure the fixed fee remains appropriate for the work performed, especially without competitive benchmarks.

What is the long-term strategy for acquiring these engineering services, and will future requirements be subject to competition?

The duration of this contract until June 2026 suggests a sustained need. Future requirements should ideally be planned for competitive procurement to leverage market dynamics for better pricing and innovation. Agencies should outline a clear path towards competition where feasible.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL 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: $17,451,364

Exercised Options: $17,451,364

Current Obligation: $17,451,364

Actual Outlays: $704,176

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W31P4Q18D0010

IDV Type: IDC

Timeline