DoD awards Raytheon $14M for TOW T2SS Engineering Services, with limited competition

Contract Overview

Contract Amount: $13,983,872 ($14.0M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2022-11-16

End Date: 2026-12-14

Contract Duration: 1,489 days

Daily Burn Rate: $9.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: TUBE-LAUNCHED, OPTICALLY TRACKED, WIRELESS-GUIDED (TOW) 2 SUBSYSTEM T2SS ENGINEERING SERVICES.

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35898

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $14.0 million to RAYTHEON COMPANY for work described as: TUBE-LAUNCHED, OPTICALLY TRACKED, WIRELESS-GUIDED (TOW) 2 SUBSYSTEM T2SS ENGINEERING SERVICES. Key points: 1. Contract awarded to Raytheon Company for critical TOW missile subsystem engineering. 2. Significant funding allocated for a 4-year period, indicating long-term support needs. 3. Engineering services are essential for maintaining and upgrading advanced weapon systems. 4. The contract's 'NOT COMPETED' status raises questions about potential cost efficiencies.

Value Assessment

Rating: fair

The contract is a Cost Plus Fixed Fee type, which can lead to cost overruns if not managed carefully. Benchmarking against similar engineering service contracts for defense systems is difficult without more detailed cost breakdowns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not competed, suggesting a sole-source or limited competition scenario. This limits price discovery and potentially increases costs for the government compared to a fully open competition.

Taxpayer Impact: Taxpayer funds are being used for specialized engineering services. The lack of competition may result in a higher overall cost than if multiple vendors had bid.

Public Impact

Ensures continued development and support for a key anti-tank missile system. Supports advanced military readiness and technological superiority. Potential for cost savings if competition is introduced in future contract actions. Highlights the importance of specialized engineering in defense procurement.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost-plus contract type
Long contract duration

Positive Signals

Essential system support
Experienced contractor

Sector Analysis

This contract falls under Engineering Services within the broader Defense sector. Spending in this area is crucial for maintaining and advancing military technological capabilities, with significant government investment typically seen in R&D and sustainment of complex weapon systems.

Small Business Impact

No information is available regarding small business participation in this contract. The prime contractor, Raytheon Company, is a large aerospace and defense firm, suggesting that any small business involvement would likely be as subcontractors.

Oversight & Accountability

The Department of the Army is the contracting agency. Oversight will be critical to manage the Cost Plus Fixed Fee structure and ensure that the engineering services provided are necessary and cost-effective, especially given the limited competition.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Lack of competitive bidding may lead to higher costs.
Cost-plus contract type introduces risk of cost overruns.
Long contract duration could mask inefficiencies.
Dependence on a single contractor for critical system support.
Limited transparency into specific cost drivers for engineering services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.0 million to RAYTHEON COMPANY. TUBE-LAUNCHED, OPTICALLY TRACKED, WIRELESS-GUIDED (TOW) 2 SUBSYSTEM T2SS 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 $14.0 million.

What is the period of performance?

Start: 2022-11-16. End: 2026-12-14.

What specific technical advancements or sustainment activities are covered under these engineering services, and how do they align with current and future defense needs?

The engineering services are for the Tube-Launched, Optically Tracked, Wire-Guided (TOW) 2 Subsystem (T2SS). This likely includes activities such as design modifications, performance analysis, testing, troubleshooting, and technical support to ensure the TOW missile system remains operational and effective. These services are crucial for maintaining the warfighting capability of units equipped with the TOW system and adapting it to evolving threats and operational requirements.

Given the 'NOT COMPETED' status, what justification was provided for not seeking offers from other qualified vendors, and what is the potential impact on overall program cost?

The justification for not competing likely stems from factors such as unique capabilities, proprietary technology, or urgent need where only one source could reasonably fulfill the requirement. However, this lack of competition limits price discovery and potentially leads to higher costs for the government. Without competitive pressure, the contractor may have less incentive to offer the most cost-effective solutions, impacting the overall value for taxpayer dollars.

How will the effectiveness of these engineering services be measured, and what are the key performance indicators (KPIs) to ensure the government receives adequate value for the $14 million investment

Effectiveness will likely be measured through metrics such as timely completion of engineering tasks, successful resolution of technical issues, achievement of specified performance improvements or sustainment levels, and adherence to budget constraints within the fixed fee. Key performance indicators could include the number of design changes implemented, reduction in system downtime, successful test results, and positive feedback from end-users. Regular reviews and audits by the contracting agency will be essential.

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

Solicitation ID: W31P4Q22R0032

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 2200 E IMPERIAL HWY, EL SEGUNDO, CA, 90245

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: $92,034,456

Exercised Options: $13,983,872

Current Obligation: $13,983,872

Actual Outlays: $93,113

Subaward Activity

Number of Subawards: 11

Total Subaward Amount: $1,827,098

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline