DoD Awards $40.2M for Radar Interface Units to Raytheon Company, Raising Competition Concerns
Contract Overview
Contract Amount: $40,239,964 ($40.2M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2023-03-15
End Date: 2024-09-26
Contract Duration: 561 days
Daily Burn Rate: $71.7K/day
Competition Type: NOT COMPETED
Pricing Type: FIXED PRICE LEVEL OF EFFORT
Sector: IT
Official Description: AMDC RADAR INTERFACE UNIT (RIU) A-KITS
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35806
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $40.2 million to RAYTHEON COMPANY for work described as: AMDC RADAR INTERFACE UNIT (RIU) A-KITS Key points: 1. Significant contract value of $40.2M for specialized radar components. 2. Sole-source award to Raytheon Company limits competitive pricing. 3. Potential for higher costs due to lack of competition. 4. IT sector spending, specifically computer systems design services.
Value Assessment
Rating: questionable
The contract's fixed-price level-of-effort structure with a significant value raises questions about cost efficiency without competitive bidding. Benchmarking against similar radar interface unit contracts is difficult due to the sole-source nature.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This method bypasses the price discovery benefits of a competitive process, potentially leading to less favorable pricing for the government.
Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for these radar interface units.
Public Impact
Military readiness may be impacted by the availability of these critical radar components. Raytheon Company solidifies its position as a key supplier for defense systems. Taxpayer funds are allocated to a single vendor without competitive validation.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for overpayment
Positive Signals
- Critical defense system component
- Fixed-price contract type
Sector Analysis
This contract falls under IT services, specifically computer systems design, for the Department of the Army. Spending in this sub-sector can vary widely based on technological advancements and defense needs.
Small Business Impact
The data indicates no specific set-aside for small businesses in this contract award. Larger prime contractors like Raytheon often manage subcontracts, but direct small business participation is not evident here.
Oversight & Accountability
Oversight is crucial for sole-source contracts to ensure fair pricing and prevent potential waste. The Department of Defense should scrutinize the necessity of the sole-source justification and monitor contract performance closely.
Related Government Programs
- Computer Systems Design Services
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award lacks competitive pricing pressure.
- Potential for cost overruns without market validation.
- Limited transparency into the necessity of sole-source justification.
- Risk of vendor lock-in for critical defense components.
Tags
computer-systems-design-services, department-of-defense, al, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $40.2 million to RAYTHEON COMPANY. AMDC RADAR INTERFACE UNIT (RIU) A-KITS
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 $40.2 million.
What is the period of performance?
Start: 2023-03-15. End: 2024-09-26.
What is the justification for the sole-source award of the AMDC RADAR INTERFACE UNIT (RIU) A-KITS contract to Raytheon Company?
The justification for a sole-source award typically involves factors such as unique capabilities, proprietary technology, or urgent and compelling needs where only one source can reasonably fulfill the requirement. Without specific documentation, it's difficult to ascertain the precise reason, but it suggests a perceived lack of viable alternatives or a critical dependency on Raytheon's specific product.
How does the lack of competition potentially impact the long-term cost of ownership for these radar interface units?
A sole-source award removes the downward pressure on pricing that competition provides. Over the life of the system, this can lead to significantly higher costs for sustainment, upgrades, and future procurements. The government may be locked into paying Raytheon's set prices without opportunities for negotiation based on market alternatives.
What measures can the Department of the Army implement to ensure value for money despite this being a sole-source contract?
The Army can implement robust performance monitoring, conduct independent cost analyses, and negotiate favorable terms for future options or related procurements. Engaging in early market research for potential future needs and exploring technology insertion opportunities that might allow for future competition are also key strategies to mitigate the risks of sole-source awards.
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: Rockwell Collins Australia PTY Limited
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: $40,239,964
Exercised Options: $40,239,964
Current Obligation: $40,239,964
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
Start Date: 2023-03-15
Current End Date: 2024-09-26
Potential End Date: 2024-09-26 12:09:00
Last Modified: 2024-09-13
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