Raytheon Company awarded $12M engineering services task order for Army, with no competition

Contract Overview

Contract Amount: $12,031,135 ($12.0M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2024-09-19

End Date: 2026-10-31

Contract Duration: 772 days

Daily Burn Rate: $15.6K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: TASK ORDER TO 15, TASK INSTRUCTION TI 02 AND 03

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $12.0 million to RAYTHEON COMPANY for work described as: TASK ORDER TO 15, TASK INSTRUCTION TI 02 AND 03 Key points: 1. The contract value represents a significant investment in specialized engineering capabilities. 2. Lack of competition raises concerns about potential overpayment and limited innovation. 3. The contract duration of over two years suggests a need for sustained support. 4. Performance will be assessed against engineering service delivery standards. 5. This contract positions Raytheon as a key provider for Army engineering needs in Arizona. 6. The cost-plus-fixed-fee structure requires careful monitoring to control expenses.

Value Assessment

Rating: questionable

Benchmarking the value of this specific task order is challenging without comparable sole-source awards for similar engineering services. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex projects, can lead to cost overruns if not managed diligently. The absence of competition means there's no direct price comparison to ensure optimal value for taxpayers. Further analysis of the fixed fee and indirect cost rates would be necessary to fully assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor, Raytheon Company, was solicited. The justification for this approach is not provided in the data, but it typically implies that only one source possesses the required capabilities, or there are urgent needs that preclude a competitive process. The lack of multiple bidders limits the government's ability to negotiate the best possible price and terms.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's leverage in securing favorable terms and potentially leads to less efficient use of public funds.

Public Impact

The U.S. Army benefits from specialized engineering services to support its operations and infrastructure. This contract will likely support critical defense infrastructure projects within Arizona. The services delivered are expected to enhance the Army's technical capabilities and operational readiness. The contract's geographic focus on Arizona may lead to local economic benefits and job creation in the engineering sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs.
Cost-plus-fixed-fee contracts require rigorous oversight to prevent cost creep.
Sole-source awards limit transparency and accountability in the procurement process.

Positive Signals

Raytheon is a well-established defense contractor with a track record in engineering services.
The contract duration suggests a stable, long-term need for these services.
The fixed fee component provides some predictability in contractor profit.

Sector Analysis

The engineering services sector is a critical component of the defense industrial base, providing essential design, development, and technical support for military systems and infrastructure. This contract falls within the broader professional, scientific, and technical services industry, which is characterized by specialized expertise and often long-term relationships between government and contractors. Comparable spending in this sector often involves significant investments in areas like aerospace engineering, systems integration, and infrastructure development, with contract values varying widely based on scope and complexity.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a sole-source award to a large prime contractor, there is a potential for limited subcontracting opportunities for small businesses unless specifically mandated or pursued by the prime. The absence of a small business set-aside suggests that the primary focus was on securing specialized capabilities from Raytheon, rather than fostering small business participation through this specific award.

Oversight & Accountability

Oversight for this contract will primarily reside with the contracting officer and the relevant Department of the Army program management office. Accountability measures will be tied to the performance standards outlined in the task order and the terms of the cost-plus-fixed-fee agreement. Transparency may be limited due to the sole-source nature of the award; however, contract performance data and financial expenditures are typically subject to internal government review and potentially audits by the Defense Contract Audit Agency (DCAA) or the Inspector General.

Related Government Programs

Department of Defense Engineering Services
Army Research and Development Contracts
Defense Infrastructure Modernization Programs
Raytheon Company Defense Contracts

Risk Flags

Sole-source award lacks competitive justification.
Cost-plus-fixed-fee structure requires vigilant cost control.
Limited transparency in procurement process.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.0 million to RAYTHEON COMPANY. TASK ORDER TO 15, TASK INSTRUCTION TI 02 AND 03

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 $12.0 million.

What is the period of performance?

Start: 2024-09-19. End: 2026-10-31.

What is Raytheon Company's past performance record with the Department of the Army for similar engineering services?

Raytheon Company has a substantial history of contracting with the Department of the Army, often in complex engineering and technical services. While specific performance metrics for this exact task order are not yet available due to its recent award, Raytheon's broader track record includes numerous successful deliveries of advanced technological solutions and support services. Historical data from contract databases often indicates a pattern of meeting or exceeding performance requirements in areas such as systems engineering, integration, and sustainment. However, like any large contractor, there may be instances of past performance issues or disputes on specific contracts, which would require a deeper dive into individual contract histories and any associated corrective actions or reviews.

How does the $12 million value of this task order compare to other sole-source engineering service contracts awarded by the Department of the Army?

The $12 million value for this task order is within a common range for specialized engineering services procured by the Department of the Army, particularly for task orders under larger indefinite-delivery/indefinite-quantity (IDIQ) contracts or sole-source awards for critical capabilities. However, without knowing the specific nature of the engineering services and the duration of the contract, a direct comparison is difficult. The Army frequently awards sole-source contracts in the tens to hundreds of millions of dollars for complex R&D, system design, and specialized technical support. This $12 million award appears to be a mid-range value for a specific, defined engineering need, rather than a large-scale program acquisition.

What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract for engineering services?

The primary risks associated with a sole-source, cost-plus-fixed-fee (CPFF) contract are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher prices than might be achieved through a competitive bidding process. The government has less leverage to negotiate favorable terms and pricing. Secondly, the CPFF structure, while providing flexibility for evolving requirements, carries the risk of cost overruns. The contractor is reimbursed for allowable costs plus a fixed fee representing profit. If costs escalate beyond initial estimates due to scope creep, inefficiencies, or poor estimation, the total contract value can increase significantly, impacting the overall budget. Robust oversight, clear scope definition, and diligent cost tracking are crucial to mitigate these risks.

What specific engineering capabilities does this contract aim to procure for the Department of the Army?

The provided data indicates the contract is for 'Engineering Services' (NAICS code 541330) awarded to Raytheon Company. While the specific technical details of Task Instruction TI 02 and 03 are not elaborated, engineering services in this context typically encompass a broad range of activities. These could include design, development, analysis, testing, and integration of systems, components, or infrastructure. Given Raytheon's profile, these services might relate to advanced defense systems, electronic warfare, aerospace engineering, or specialized military hardware. The contract likely supports specific Army modernization efforts, operational requirements, or sustainment activities requiring specialized technical expertise.

What is the historical spending trend for engineering services procured by the Department of the Army from Raytheon Company?

Historical spending data reveals that the Department of the Army has consistently awarded significant contracts to Raytheon Company for engineering and related technical services over many years. Raytheon is a major defense contractor, and its portfolio includes a wide array of engineering disciplines essential to military operations. Annual spending figures can fluctuate based on program cycles, technological advancements, and evolving defense priorities. However, Raytheon typically secures a substantial portion of the Army's budget allocated for advanced engineering, systems integration, and platform support, often in the hundreds of millions or even billions of dollars cumulatively across various contracts and task orders.

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

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: $12,031,135

Exercised Options: $12,031,135

Current Obligation: $12,031,135

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $1,307,353

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W31P4Q18D0010

IDV Type: IDC

Timeline