Raytheon Company awarded $33M contract for AMDC RADAR INTERFACE UNIT (RIU) A-KITS by the Department of the Army

Contract Overview

Contract Amount: $33,040,647 ($33.0M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2024-09-26

End Date: 2026-03-26

Contract Duration: 546 days

Daily Burn Rate: $60.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

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 $33.0 million to RAYTHEON COMPANY for work described as: AMDC RADAR INTERFACE UNIT (RIU) A-KITS Key points: 1. Contract awarded as a sole-source delivery order, raising questions about potential price efficiencies. 2. The contract duration of 546 days suggests a moderate-term need for these specialized units. 3. Guided Missile and Space Vehicle Manufacturing sector indicates a focus on advanced defense capabilities. 4. The fixed-price contract type aims to transfer some cost risk to the contractor. 5. No small business set-aside was applied, potentially limiting opportunities for smaller firms in this segment.

Value Assessment

Rating: fair

The contract value of $33,040,647 for the AMDC RADAR INTERFACE UNIT (RIU) A-KITS appears to be a significant investment. Without direct comparable contract data for this specific unit, it is difficult to benchmark the pricing definitively. However, given the specialized nature of guided missile and space vehicle manufacturing components, costs can be expected to be high. Further analysis would require comparing unit costs or total project costs against similar advanced electronic warfare or radar components.

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 approach is typically used when a specific contractor possesses unique capabilities, proprietary technology, or is the only source capable of meeting the requirement. The lack of competition means that the Department of the Army did not benefit from a bidding process that could have potentially driven down prices through market forces.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is less pressure on the contractor to offer the most competitive pricing. This necessitates robust oversight to ensure fair value is received.

Public Impact

The Department of the Army is the primary beneficiary, receiving critical components for its radar systems. The contract supports the production and delivery of AMDC RADAR INTERFACE UNIT (RIU) A-KITS, essential for advanced defense operations. The geographic impact is centered in Alabama (AL), where the contract is being performed. This contract likely supports a specialized workforce within Raytheon Company, contributing to the defense manufacturing sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing pressure, potentially increasing costs for the government.
Lack of transparency in the sole-source justification requires careful review to ensure necessity.
The specialized nature of the components may create a dependency on a single supplier.

Positive Signals

Award to a known entity (Raytheon Company) suggests a potentially reliable supplier with established expertise.
Fixed-price contract type provides cost certainty for the government, assuming the scope is well-defined.
The contract supports critical defense infrastructure, aligning with national security objectives.

Sector Analysis

This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a highly specialized area of the defense industry. This sector is characterized by high research and development costs, stringent quality control, and often involves proprietary technologies. Spending in this area is critical for maintaining technological superiority in defense capabilities. Comparable spending benchmarks would likely involve other advanced electronics, radar systems, or missile component contracts within the Department of Defense.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. This means that opportunities for small businesses to participate in this specific contract are limited. The focus is on a large, established prime contractor, Raytheon Company, which may have its own internal small business subcontracting program, but this contract itself does not appear to be a direct vehicle for small business engagement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the fixed-price contract type, which obligates the contractor to deliver specified goods within agreed-upon terms. Transparency is limited due to the sole-source nature of the award; however, contract award details are typically made public. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Guided Missile Manufacturing
Space Vehicle Manufacturing
Radar Systems Components
Defense Electronics
Department of the Army Procurement

Risk Flags

Sole-source award
Lack of competition
Potential for price inflation
Specialized technology dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.0 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 $33.0 million.

What is the period of performance?

Start: 2024-09-26. End: 2026-03-26.

What is Raytheon Company's track record with similar sole-source contracts for radar interface units?

Raytheon Company, a major defense contractor, has a long history of supplying complex systems, including radar components, to the Department of Defense. While specific data on their track record with sole-source contracts for 'AMDC RADAR INTERFACE UNIT (RIU) A-KITS' is not publicly detailed here, their extensive experience in guided missile and space vehicle manufacturing suggests a capacity to deliver such specialized equipment. Analysis of past sole-source awards to Raytheon for similar technological components would be necessary to fully assess their performance and pricing consistency in non-competitive environments. Government contract databases and historical award data would be the primary sources for this information, looking for patterns in delivery, cost overruns, and quality.

How does the $33 million value compare to similar radar interface unit procurements?

Benchmarking the $33 million value of this contract for AMDC RADAR INTERFACE UNIT (RIU) A-KITS against similar procurements is challenging without more specific data on the units' capabilities and quantities. Radar interface units can vary significantly in complexity, technological sophistication, and intended application, leading to wide price ranges. Generally, components for advanced defense systems like those in guided missile and space vehicles are high-cost items due to R&D, specialized manufacturing, and stringent quality requirements. A direct comparison would require identifying contracts for units with comparable specifications, quantities, and performance characteristics, ideally from multiple sources to establish a market rate. The sole-source nature of this award further complicates direct value-for-money assessment.

What are the primary risks associated with this sole-source award for the Department of the Army?

The primary risks associated with this sole-source award are related to cost and potential lack of innovation. Without competition, the Department of the Army faces a higher risk of paying a premium price, as Raytheon Company is not incentivized by market pressures to offer the lowest possible cost. There's also a risk of vendor lock-in, where the Army becomes dependent on Raytheon for these specific units, potentially limiting future flexibility or access to alternative technologies. Furthermore, the absence of competitive proposals might reduce the impetus for Raytheon to innovate aggressively on this particular contract, compared to a scenario with active market competition. Robust contract management and oversight are crucial to mitigate these risks.

How effective is the fixed-price contract type in managing costs for this specialized defense component?

The Firm Fixed Price (FFP) contract type is generally effective in providing cost certainty for the government, as the contractor assumes the risk of cost overruns. For specialized defense components like the AMDC RADAR INTERFACE UNIT (RIU) A-KITS, FFP is often preferred to budget predictability. However, its effectiveness hinges on the accuracy of the initial cost estimates and the clarity of the contract's scope of work. If the scope is poorly defined or unforeseen technical challenges arise, the contractor might seek change orders, potentially increasing the total cost. In a sole-source situation, the government's negotiation leverage during the initial pricing phase is critical to ensuring the FFP represents fair value.

What are the historical spending patterns for Guided Missile and Space Vehicle Manufacturing components by the Department of the Army?

Historical spending patterns for Guided Missile and Space Vehicle Manufacturing components by the Department of the Army typically show significant and consistent investment due to the strategic importance of these capabilities. This sector often involves large, multi-year contracts for research, development, and production of complex systems. Spending can fluctuate based on geopolitical conditions, technological advancements, and specific program requirements. While the $33 million for this specific contract is a notable sum, it represents a fraction of the overall defense budget allocated to this sector. Analyzing historical data would reveal trends in contract types, major suppliers, and the overall investment trajectory in advanced missile and space technologies.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

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: $44,054,196

Exercised Options: $33,040,647

Current Obligation: $33,040,647

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W31P4Q24D0030

IDV Type: IDC

Timeline