Raytheon Company awarded $96M for A3 Sentinel Radar support, a sole-source engineering services contract

Contract Overview

Contract Amount: $95,979,335 ($96.0M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2023-12-29

End Date: 2026-12-31

Contract Duration: 1,098 days

Daily Burn Rate: $87.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: LIFE CYCLE CONTRACTOR SUPPORT OF A3 SENTINEL RADARS.

Place of Performance

Location: FULLERTON, ORANGE County, CALIFORNIA, 92834

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $96.0 million to RAYTHEON COMPANY for work described as: LIFE CYCLE CONTRACTOR SUPPORT OF A3 SENTINEL RADARS. Key points: 1. Contract focuses on lifecycle support for critical radar systems, indicating a need for specialized expertise. 2. Sole-source award suggests limited market availability for this specific support or a strategic partnership. 3. The contract duration of nearly three years points to ongoing operational requirements. 4. Engineering services are essential for maintaining and upgrading complex defense technology. 5. The contract's value is substantial, reflecting the high cost of advanced defense systems. 6. The absence of small business set-asides is noted, with no indication of subcontracting plans.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source contract is challenging without comparable bids. The total contract value of approximately $96 million over nearly three years suggests a significant investment in maintaining advanced radar systems. Given the specialized nature of lifecycle support for defense technology, pricing is likely influenced by proprietary knowledge and development costs. Further analysis would require access to cost breakdowns and historical pricing for similar support contracts.

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 among multiple vendors. This typically occurs when only one vendor possesses the necessary specialized knowledge, technology, or proprietary rights to perform the required services. The lack of competition means that price discovery through market forces was not utilized, potentially leading to higher costs than if multiple bids were solicited.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive bidding. Without a competitive process, there is less pressure on the contractor to offer the most cost-effective solution.

Public Impact

The U.S. Army benefits from continued operational readiness of its A3 Sentinel radar systems. This contract ensures the availability of specialized engineering services for critical defense infrastructure. The primary geographic impact is within the operational theaters where these radars are deployed. The contract supports a highly specialized engineering workforce within Raytheon Company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially impacting cost-effectiveness for taxpayers.
Lack of transparency in pricing due to sole-source nature makes independent value assessment difficult.
No small business participation is indicated, potentially limiting opportunities for smaller firms in the defense supply chain.

Positive Signals

Ensures continued lifecycle support for critical A3 Sentinel radar systems, vital for national security.
Leverages specialized expertise from Raytheon Company, a known provider of defense technologies.
Long-term contract provides stability for essential defense maintenance and upgrade services.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting advanced defense technology. The market for specialized defense system support is often characterized by high barriers to entry, proprietary technology, and long-standing relationships between contractors and government agencies. Comparable spending benchmarks are difficult to establish due to the unique nature of radar systems and their lifecycle support requirements, but significant investments are typical for maintaining such critical assets.

Small Business Impact

This contract does not appear to include any small business set-asides, nor is there information indicating subcontracting opportunities for small businesses. This suggests that the primary contractor, Raytheon Company, will be performing the majority, if not all, of the work. The absence of small business involvement in this specific contract means that opportunities to leverage the agility and innovation of smaller firms within the defense ecosystem are not being realized here.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army, with specific contracting officers and program managers responsible for monitoring performance and expenditures. Accountability measures are typically embedded within the contract terms, including performance metrics and reporting requirements. Transparency may be limited due to the sole-source nature of the award, but contract modifications and performance reviews would be subject to internal government oversight processes. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Radar Systems
Engineering and Technical Services
Life Cycle Management
Department of the Army Contracts
Raytheon Company Contracts

Risk Flags

Sole-source award
Lack of competition
No small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $96.0 million to RAYTHEON COMPANY. LIFE CYCLE CONTRACTOR SUPPORT OF A3 SENTINEL RADARS.

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 $96.0 million.

What is the period of performance?

Start: 2023-12-29. End: 2026-12-31.

What is the historical spending pattern for A3 Sentinel radar support with Raytheon Company?

Historical spending data for A3 Sentinel radar support specifically with Raytheon Company is not directly available in the provided data. However, the current contract awarded on December 29, 2023, with an end date of December 31, 2026, and a value of approximately $96 million, indicates a significant, multi-year investment. To understand historical patterns, one would need to access previous contract awards for similar support services for this radar system or related systems provided by Raytheon. This would involve searching federal procurement databases for prior contracts, analyzing their duration, value, and the specific services rendered to identify trends in spending and contractor reliance.

How does the pricing of this contract compare to similar lifecycle support contracts for defense systems?

Direct comparison of pricing for this $96 million, sole-source contract is difficult without access to detailed cost breakdowns and comparable contract data. Sole-source awards inherently lack the price discovery mechanism of competitive bidding, which typically drives down costs. To benchmark, one would need to identify similar lifecycle support contracts for comparable radar systems or other complex defense platforms, ideally those awarded competitively. Analyzing the price per unit of service, labor rates, and overhead applied in those competitive contracts would provide a basis for assessing whether Raytheon's pricing is reasonable. However, the specialized nature of the A3 Sentinel system and Raytheon's unique position as a provider may justify a premium.

What are the key performance indicators (KPIs) for this contract, and how is performance being measured?

The provided data does not specify the key performance indicators (KPIs) or the exact methods for measuring performance for this contract. Typically, lifecycle support contracts for defense systems include metrics related to system availability, response times for maintenance and repair, quality of service, and adherence to schedules. Performance is usually assessed through regular reporting by the contractor, site visits, technical reviews, and user feedback from the Army. Contract officers and program managers are responsible for monitoring these KPIs and ensuring that Raytheon meets the contractual obligations. Failure to meet performance standards could result in contractual remedies, including potential financial penalties or termination.

What is the risk assessment associated with this sole-source contract, particularly regarding cost overruns and schedule delays?

The primary risk associated with this sole-source contract is the potential for cost overruns and schedule delays due to the lack of competitive pressure. Without multiple bidders vying for the contract, there is less incentive for the contractor to optimize costs or adhere strictly to timelines. Raytheon, as a large defense contractor, likely has established project management processes, but the inherent nature of sole-source procurement increases the risk of less favorable pricing and potential inefficiencies. Mitigation strategies would involve robust government oversight, detailed contract clauses, and clear performance expectations to manage these risks effectively.

What is the strategic importance of the A3 Sentinel radar system, and how does this contract support its operational effectiveness?

The A3 Sentinel radar system is a critical component of the U.S. Army's air defense capabilities, providing surveillance, target detection, and tracking. Its operational effectiveness is paramount for national security, enabling the early warning and defense against aerial threats. This contract, focusing on lifecycle contractor support, is strategically vital because it ensures the continuous readiness, maintenance, and potential upgrades of these sophisticated systems. By securing specialized engineering services, the Army can maintain the A3 Sentinel's performance, reliability, and technological relevance, thereby safeguarding its operational effectiveness in diverse and evolving threat environments.

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: W31P4Q23R0011

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 1801 HUGHES DR, FULLERTON, CA, 92833

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: $127,296,620

Exercised Options: $95,979,335

Current Obligation: $95,979,335

Subaward Activity

Number of Subawards: 22

Total Subaward Amount: $4,573,224

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline