Raytheon Company awarded $30.8M task order for computer systems design services by the Department of the Army

Contract Overview

Contract Amount: $30,783,747 ($30.8M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2022-02-24

End Date: 2023-03-15

Contract Duration: 384 days

Daily Burn Rate: $80.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIXED PRICE LEVEL OF EFFORT

Sector: IT

Official Description: TASK ORDER 003 FOR SERVICES, MATERIAL AND TRAVEL

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35806

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $30.8 million to RAYTHEON COMPANY for work described as: TASK ORDER 003 FOR SERVICES, MATERIAL AND TRAVEL Key points: 1. The contract was awarded on a fixed-price level-of-effort basis, indicating a defined scope of work with payment tied to effort expended. 2. The task order was not competed, raising questions about potential price discovery and value for money. 3. The duration of the task order is 384 days, suggesting a medium-term engagement for the services provided. 4. The contract falls under the 'Computer Systems Design Services' category, a common area for federal IT spending. 5. The awardee, Raytheon Company, is a large defense contractor with extensive experience in this sector. 6. The base value of the award is $30.8 million, representing a significant investment in IT support.

Value Assessment

Rating: fair

Benchmarking the value of this task order is challenging without more detailed service descriptions and comparable contract data. However, the fixed-price level-of-effort structure suggests an attempt to control costs for a defined scope. The absence of competition, however, limits the ability to assess if the pricing is truly competitive against market rates or other potential providers. Further analysis would require understanding the specific deliverables and the labor rates involved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This task order was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities or when urgency dictates a direct award. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices or fostered innovation from a wider pool of suppliers.

Taxpayer Impact: For taxpayers, a sole-source award means there is a reduced likelihood of achieving the best possible price through competitive bidding. This can potentially lead to higher costs for the government and, consequently, for taxpayers.

Public Impact

The Department of the Army benefits from specialized computer systems design services to support its operations. The services delivered are crucial for maintaining and potentially enhancing the Army's IT infrastructure. The geographic impact is primarily within Alabama, where the contract is being performed. The contract supports a workforce skilled in computer systems design and related IT fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs than a competed contract.
Sole-source awards can limit opportunities for other qualified vendors, including small businesses.
Performance risks are concentrated with a single contractor, requiring robust oversight.

Positive Signals

Award to an established contractor like Raytheon suggests a high likelihood of technical capability.
Fixed-price structure provides some cost certainty for the government.
The contract duration indicates a commitment to a specific IT solution or support.

Sector Analysis

The Computer Systems Design Services sector is a significant component of the federal IT market, encompassing a wide range of activities from software development to IT infrastructure management. Federal spending in this area is consistently high, driven by the need for advanced technological capabilities across various agencies. This contract with Raytheon fits within the broader trend of government outsourcing complex IT functions to specialized firms. Comparable spending benchmarks would typically involve analyzing other task orders for similar services awarded to large defense contractors.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The award to a large prime contractor like Raytheon suggests that the primary focus was on specialized capabilities rather than fostering small business participation through this specific award. This could limit opportunities for small businesses to engage in this particular project, although they may participate in other federal contracts.

Oversight & Accountability

Oversight for this task order would typically fall under the purview of the contracting officer and the relevant program management office within the Department of the Army. Accountability measures would be tied to the fixed-price level-of-effort contract terms, requiring Raytheon to deliver services as specified. Transparency is limited by the sole-source nature of the award; however, contract award data is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense IT Services
Computer Systems Design Services
Army IT Modernization Programs
Raytheon Company Contracts

Risk Flags

Sole-source award lacks competitive pricing pressure.
Potential for cost overruns if effort is not closely managed.
Limited transparency into the specific services and value provided.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.8 million to RAYTHEON COMPANY. TASK ORDER 003 FOR SERVICES, MATERIAL AND TRAVEL

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 $30.8 million.

What is the period of performance?

Start: 2022-02-24. End: 2023-03-15.

What is Raytheon Company's track record with the Department of Defense for similar IT services?

Raytheon Company, now RTX, has a long and extensive history of contracting with the Department of Defense (DoD) across a wide array of services, including IT and systems integration. Their track record with the DoD is characterized by large-scale, complex projects, often involving advanced technology and defense systems. For computer systems design services specifically, Raytheon has been a consistent provider, undertaking tasks related to software development, network infrastructure, cybersecurity, and command and control systems. While specific performance metrics for individual task orders are not always publicly detailed, their continued awards from the DoD suggest a general satisfaction with their capabilities and delivery on many fronts. However, like any large contractor, they have also faced scrutiny and performance challenges on certain contracts, underscoring the importance of robust oversight for all government awards.

How does the $30.8 million value compare to other similar IT task orders awarded by the Army?

The $30.8 million value for this task order falls within a common range for significant IT service contracts awarded by the Department of the Army. Federal IT spending is substantial, and task orders of this magnitude are frequently seen for specialized services like computer systems design, software development, and system integration. To provide a precise comparison, one would need to analyze a dataset of recent Army task orders under NAICS code 541512 (Computer Systems Design Services) with similar durations and scopes. However, generally speaking, this amount indicates a medium-to-large scale engagement. Awards to large, established defense contractors like Raytheon often reach these figures due to the complexity and breadth of services required. Smaller, more focused task orders might range from a few hundred thousand to a few million dollars, while major program-level contracts can extend into hundreds of millions or billions.

What are the primary risks associated with a sole-source award for computer systems design services?

The primary risks associated with a sole-source award for computer systems design services include potential overpricing, reduced innovation, and a lack of vendor accountability stemming from limited competition. Without the pressure of competing bids, the awarded contractor may not be incentivized to offer the most cost-effective solution, potentially leading to higher costs for the government. Furthermore, the absence of multiple vendors limits the exposure to diverse approaches and innovative solutions that could arise from a competitive environment. Accountability can also be a concern; while the government has contractual recourse, the lack of alternatives means that if performance issues arise, switching vendors can be difficult and costly. This underscores the critical need for stringent performance monitoring and clear contract terms when sole-source awards are necessary.

How effective are fixed-price level-of-effort contracts in ensuring value for money in IT services?

Fixed-price level-of-effort (FPLOE) contracts aim to provide value for money by establishing a ceiling price and defining the scope of effort required. This structure offers some cost predictability for the government, as the total expenditure is capped. However, its effectiveness in ensuring value for money for IT services can be mixed. The 'level-of-effort' component means that payment is tied to the time and resources expended by the contractor, rather than solely on specific deliverables. If not carefully managed and monitored, this can lead to inefficiencies or scope creep, where the effort expended exceeds what is truly necessary to achieve the desired outcome. Value is maximized when the 'effort' is well-defined, the labor rates are competitive, and the government actively monitors the progress and necessity of the work being performed.

What are the historical spending patterns for computer systems design services by the Department of the Army?

The Department of the Army consistently allocates significant portions of its budget to computer systems design services, reflecting the critical role of IT in modern military operations. Historical spending patterns show a steady demand for these services, driven by needs for system modernization, cybersecurity enhancements, data management, software development, and network infrastructure support. Spending in this category has generally trended upwards over the years, mirroring the increasing reliance on technology across all branches of the military. The Army often utilizes a mix of contract types, including fixed-price and cost-reimbursement, and frequently awards task orders under larger indefinite-delivery/indefinite-quantity (IDIQ) contracts. Major defense contractors, alongside specialized IT firms, are common recipients of these awards, with spending concentrated in areas supporting command, control, communications, computers, intelligence, surveillance, and reconnaissance (C4ISR) systems.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIXED PRICE LEVEL OF EFFORT (B)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 401 JAN DAVIS DR NW, HUNTSVILLE, AL, 35806

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: $30,783,747

Exercised Options: $30,783,747

Current Obligation: $30,783,747

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W31P4Q20D0019

IDV Type: IDC

Timeline