DoD Awards Raytheon $48.4M for Land-Based Phalanx Weapon System Services

Contract Overview

Contract Amount: $48,416,734 ($48.4M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2023-12-22

End Date: 2025-07-31

Contract Duration: 587 days

Daily Burn Rate: $82.5K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: FUNCTIONAL SERVICES FOR LAND-BASED PHALANX WEAPON SYSTEM (LPWS).

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35898

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $48.4 million to RAYTHEON COMPANY for work described as: FUNCTIONAL SERVICES FOR LAND-BASED PHALANX WEAPON SYSTEM (LPWS). Key points: 1. Significant contract for critical defense system maintenance. 2. Sole-source award to Raytheon raises competition concerns. 3. Potential for cost overruns with Cost Plus Fixed Fee contract type. 4. Long-term support contract impacting defense sector spending.

Value Assessment

Rating: fair

The contract value of $48.4M for engineering services is substantial. Without comparable contracts or detailed cost breakdowns, assessing its pricing against similar services is difficult. The Cost Plus Fixed Fee structure warrants close monitoring for efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Raytheon. This lack of competition limits price discovery and may result in higher costs for the government compared to a competitive bidding process.

Taxpayer Impact: The sole-source nature of this award means taxpayers may not be receiving the best possible price for these essential engineering services.

Public Impact

Ensures continued operational readiness of the Land-Based Phalanx Weapon System. Supports advanced defense technology and national security. Potential impact on future defense procurement strategies due to sole-source award.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Positive Signals

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense systems. Spending benchmarks for similar specialized weapon system support can vary widely, but large sole-source contracts often warrant scrutiny.

Small Business Impact

The data indicates this contract was not awarded to small businesses, as the prime contractor is Raytheon Company. There is no information provided on subcontracting opportunities for small businesses.

Oversight & Accountability

The Department of the Army is the awarding agency. Oversight will be crucial to ensure cost control and performance under the Cost Plus Fixed Fee contract, especially given the sole-source nature of the award.

Related Government Programs

Risk Flags

Tags

engineering-services, department-of-defense, al, delivery-order, 10m-plus

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $48.4 million to RAYTHEON COMPANY. FUNCTIONAL SERVICES FOR LAND-BASED PHALANX WEAPON SYSTEM (LPWS).

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 $48.4 million.

What is the period of performance?

Start: 2023-12-22. End: 2025-07-31.

What is the justification for the sole-source award, and what steps are being taken to ensure fair pricing?

The justification for a sole-source award typically involves unique capabilities or proprietary technology held by the incumbent. To ensure fair pricing, the government should conduct thorough cost analyses, benchmark against historical data, and negotiate aggressively. Regular performance reviews and audits are also essential to monitor expenditures and prevent cost overruns under the Cost Plus Fixed Fee structure.

What are the potential risks associated with a Cost Plus Fixed Fee contract for this type of service?

Cost Plus Fixed Fee (CPFF) contracts carry risks for the government, primarily the potential for cost overruns. While the fixed fee provides some incentive for the contractor to control costs, the government bears the risk of increased direct costs. This structure can lead to less cost-consciousness compared to fixed-price contracts, potentially resulting in higher overall spending if not managed diligently through robust oversight and auditing.

How does this sole-source award impact the long-term competitive landscape for Land-Based Phalanx Weapon System support?

A sole-source award can stifle competition by reinforcing the incumbent's market position and potentially creating barriers to entry for other firms. Over time, this can lead to reduced innovation and higher prices. The Department of Defense should consider strategies to foster competition for future support contracts, perhaps through modularization of services or by actively seeking out and qualifying alternative providers.

Industry Classification

NAICS: Professional, Scientific, and Technical ServicesArchitectural, Engineering, and Related ServicesEngineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT)MANAGEMENT SUPPORT 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: Rockwell Collins Australia PTY Limited

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: $48,416,734

Exercised Options: $48,416,734

Current Obligation: $48,416,734

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $1,098,070

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W31P4Q19D0015

IDV Type: IDC

Timeline

Start Date: 2023-12-22

Current End Date: 2025-07-31

Potential End Date: 2025-07-31 12:07:00

Last Modified: 2025-05-28

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