Raytheon Company awarded $105.8M for Computer Systems Design Services by the Department of Defense

Contract Overview

Contract Amount: $105,834,692 ($105.8M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2016-05-16

End Date: 2021-04-15

Contract Duration: 1,795 days

Daily Burn Rate: $59.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::CL,CT::IGF

Plain-Language Summary

Department of Defense obligated $105.8 million to RAYTHEON COMPANY for work described as: IGF::CL,CT::IGF Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Long contract duration of 1795 days suggests a significant, ongoing need. 3. Firm Fixed Price contract type aims to control costs for the government. 4. Services fall under Computer Systems Design, a critical area for defense operations. 5. No small business set-aside or subcontracting information provided, potentially limiting small business participation.

Value Assessment

Rating: fair

The contract value of $105.8 million over approximately five years for computer systems design services is substantial. Without specific deliverables or performance metrics, a direct value-for-money assessment is challenging. Benchmarking against similar sole-source contracts for complex systems design is difficult due to the unique nature of defense requirements. However, the lack of competition inherently raises concerns about achieving optimal pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Raytheon Company, was solicited. This approach bypasses the competitive bidding process, which typically drives down prices and fosters innovation. While sole-source awards can be justified for specialized capabilities or urgent needs, they reduce transparency and limit the government's ability to explore alternative solutions or secure more favorable terms.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the cost savings typically achieved through competitive bidding, potentially leading to higher overall expenditure for these services.

Public Impact

The Department of Defense benefits from specialized computer systems design services essential for its operations. These services likely support critical defense infrastructure and technological advancements. The geographic impact is likely national, supporting defense readiness across various locations. The contract supports a highly skilled workforce within the defense technology sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs for taxpayers.
Sole-source nature limits transparency in pricing and vendor selection.
Absence of small business considerations could exclude valuable smaller partners.

Positive Signals

Firm Fixed Price contract type provides cost certainty for the government.
Long-term award suggests a stable and reliable service provider for critical needs.
Award to a major defense contractor like Raytheon indicates access to advanced technical expertise.

Sector Analysis

The Computer Systems Design Services sector is a vital component of the broader IT and defense industries. This contract falls within a market segment focused on developing and maintaining complex technological systems. Spending in this area is often driven by national security requirements, technological obsolescence, and the need for advanced capabilities. Comparable spending benchmarks are difficult to establish without detailed service descriptions, but large-scale defense contracts for systems design can run into hundreds of millions or even billions of dollars.

Small Business Impact

The contract data indicates no small business set-aside (ss=false) and no indication of small business participation (sb=false). This suggests that small businesses were not specifically targeted for this procurement. Consequently, opportunities for small business subcontracting may be limited, potentially impacting the small business ecosystem's ability to engage with large-scale defense contracts.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management oversight mechanisms. Accountability measures are inherent in the Firm Fixed Price structure, which obligates the contractor to deliver services within the agreed price. Transparency is reduced due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Information Technology Contracting
Computer Systems Design and Related Services
Department of Defense IT Procurement
Sole-Source Defense Contracts

Risk Flags

Sole-source award limits competitive pricing.
Lack of transparency in vendor selection process.
Potential for higher costs due to lack of competition.
No explicit small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $105.8 million to RAYTHEON COMPANY. IGF::CL,CT::IGF

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 $105.8 million.

What is the period of performance?

Start: 2016-05-16. End: 2021-04-15.

What specific computer systems design services were provided under this contract?

The provided data indicates the contract was for 'Computer Systems Design Services' (NAICS code 541512) awarded to Raytheon Company by the Department of Defense. However, the specific nature of these services, such as the types of systems designed, the technologies involved, or the intended purpose (e.g., software development, network architecture, cybersecurity integration), is not detailed in the summary data. Further investigation into the contract's statement of work (SOW) would be necessary to understand the precise deliverables and technical scope.

Why was this contract awarded on a sole-source basis?

Sole-source awards are typically justified when only one responsible source is available or capable of meeting the government's needs. Common reasons include unique technical capabilities, proprietary technology, urgent and compelling requirements where competition is not feasible, or when a specific contractor is the only viable option due to prior work or specialized expertise. Without access to the Justification and Approval (J&A) document for this specific contract, the precise rationale for the sole-source award to Raytheon Company remains unknown. This lack of competition limits the government's ability to explore alternative solutions and potentially achieve better pricing.

How does the $105.8 million contract value compare to similar sole-source IT services contracts within the Department of Defense?

The $105.8 million value for computer systems design services over approximately five years is a significant sum, typical for large-scale defense IT procurements. However, comparing it directly to other sole-source contracts is challenging without knowing the specific scope, complexity, and duration of those other contracts. Sole-source awards inherently make direct value comparisons difficult because the pricing is not validated through competition. Generally, the Department of Defense awards numerous large contracts, and while this amount is substantial, it falls within the range of major system design and integration efforts, especially when awarded without competitive pressure.

What are the potential risks associated with a sole-source contract of this magnitude and duration?

The primary risks associated with a sole-source contract of this magnitude ($105.8M) and duration (1795 days) include potential cost overruns due to the absence of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and a lack of transparency in pricing. Taxpayers may end up paying more than they would in a competitive environment. Furthermore, the government becomes heavily reliant on a single vendor, increasing the risk if that vendor experiences performance issues, financial instability, or strategic shifts. There's also a risk of vendor lock-in, making it difficult to transition to other solutions in the future.

What is Raytheon Company's track record with the Department of Defense for similar services?

Raytheon Company (now RTX) is a major defense contractor with a long and extensive history of providing a wide range of services and products to the Department of Defense, including complex IT and systems design solutions. While this specific contract data doesn't detail Raytheon's performance history on this particular award, the company is generally known for its capabilities in areas such as aerospace, defense, and cybersecurity. Their track record with the DoD is extensive, encompassing numerous large-scale contracts across various defense programs. Performance on specific contracts can vary, and detailed reviews would be needed for a comprehensive assessment.

Are there any indications of cost savings or efficiencies achieved through this contract structure?

The contract is structured as 'FIRM FIXED PRICE' (pt: FIRM FIXED PRICE), which is designed to provide cost certainty for the government. This means the contractor is obligated to complete the work for a predetermined price, regardless of their actual costs. This structure shifts the risk of cost overruns to the contractor and can lead to savings if the contractor manages their resources efficiently. However, because the contract was awarded on a sole-source basis, it is impossible to determine if the fixed price represents a cost-saving compared to what might have been achieved through a competitive bidding process. The absence of competition limits the ability to benchmark the price effectively.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W52P1J16R0105

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 22260 PACIFIC BLVD, DULLES, VA, 20166

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: $105,834,692

Exercised Options: $105,834,692

Current Obligation: $105,834,692

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $4,644,701

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline