Army awards $27M for ammunition system IT support, with Raytheon Company as prime contractor

Contract Overview

Contract Amount: $27,089,732 ($27.1M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2020-07-20

End Date: 2025-07-19

Contract Duration: 1,825 days

Daily Burn Rate: $14.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: STANDARD ARMY AMMUNITION SYSTEM FOR PL LIS

Place of Performance

Location: STERLING, LOUDOUN County, VIRGINIA, 20166

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $27.1 million to RAYTHEON COMPANY for work described as: STANDARD ARMY AMMUNITION SYSTEM FOR PL LIS Key points: 1. Contract value appears reasonable given the duration and scope of IT support services. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. No specific risk indicators are immediately apparent from the provided data. 4. The contract supports the Army's logistical readiness and ammunition management. 5. This falls within the broader IT services sector for defense applications.

Value Assessment

Rating: good

The contract's total value of approximately $27 million over five years suggests a moderate annual spend. Benchmarking against similar IT support contracts for large federal agencies indicates this pricing is within a typical range. The firm-fixed-price structure helps control costs for the government, providing good value if performance objectives are met.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bids suggests a degree of competition, though the exact number of bidders can influence price discovery. A higher number of bidders typically leads to more competitive pricing.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down costs and improve service quality.

Public Impact

The U.S. Army benefits through enhanced logistical capabilities and improved ammunition management. Services include computer systems design and related support for the ammunition system. The geographic impact is primarily within the Department of the Army's operational footprint. Workforce implications include support roles for IT professionals and system administrators.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Positive Signals

Firm-fixed-price contract type helps manage cost certainty.
Full and open competition suggests a robust bidding process.
Contract duration of five years allows for sustained support and planning.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, specifically focusing on computer systems design and support for defense applications. The market for defense IT services is substantial, with agencies like the Department of Defense consistently investing in maintaining and upgrading their technological infrastructure to ensure operational readiness and efficiency. This contract represents a portion of that ongoing investment.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (sb: false). There is no explicit information on subcontracting plans for small businesses. Without specific set-aside requirements or reported subcontracting goals, the direct impact on the small business ecosystem for this particular award is likely limited, though Raytheon Company may engage small businesses as part of its broader supply chain.

Oversight & Accountability

The contract is managed by the Department of the Army, a component of the Department of Defense. Oversight mechanisms would typically involve contract officers, program managers, and potentially quality assurance representatives to monitor performance and adherence to terms. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Army Logistics Modernization Programs
Defense Ammunition Logistics Systems
DoD IT Services Contracts
Computer Systems Design Services

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.1 million to RAYTHEON COMPANY. STANDARD ARMY AMMUNITION SYSTEM FOR PL LIS

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 $27.1 million.

What is the period of performance?

Start: 2020-07-20. End: 2025-07-19.

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

Raytheon Company, now part of RTX, has a long history of providing complex IT solutions and support services to the Department of Defense and other federal agencies. They are known for their work in areas such as command and control systems, cybersecurity, and enterprise IT infrastructure. While specific performance details for this particular contract are not detailed here, their extensive experience suggests a strong capability to manage and execute such requirements. Past performance reviews and contract award histories would provide a more granular understanding of their track record on similar engagements, including adherence to schedules, budget, and technical specifications.

How does the annual cost of this contract compare to other large-scale IT support contracts within the Army?

The annual cost for this contract averages approximately $5.4 million ($27,089,732.23 / 5 years). This figure needs to be contextualized against the specific scope of services provided. Large-scale IT support contracts within the Army can vary significantly in cost depending on factors such as the complexity of systems supported, the number of users, geographic distribution, and the level of specialized expertise required. Contracts for enterprise resource planning (ERP) systems, network infrastructure management, or advanced cybersecurity solutions often command higher annual expenditures. Without detailed comparisons of service scope and complexity, it's challenging to definitively benchmark this contract's annual cost against all other Army IT support contracts, but the $5.4M annual average appears moderate for a five-year definitive contract.

What are the primary risks associated with the performance of this contract?

The primary risks associated with this contract revolve around potential performance issues, cost overruns (though mitigated by FFP), and schedule delays. For an ammunition system, system downtime or data inaccuracies could have significant logistical and operational impacts on the Army. Technical risks include the potential for outdated technology, integration challenges with other Army systems, and cybersecurity vulnerabilities. Contractor-related risks might include key personnel turnover or financial instability, although Raytheon is a large, established entity. The firm-fixed-price nature of the contract shifts some cost risk to the contractor, but performance failures could still necessitate corrective actions or contract modifications.

How effective is the "STANDARD ARMY AMMUNITION SYSTEM" in meeting the Army's logistical needs?

The effectiveness of the "STANDARD ARMY AMMUNITION SYSTEM" (SAAS) is directly supported by the IT services provided under this contract. SAAS is designed to manage the lifecycle of ammunition, from procurement and storage to issue and demilitarization, aiming to provide accurate inventory data, streamline logistical processes, and ensure accountability. The IT support ensures the system's availability, reliability, and data integrity. While this contract focuses on the IT infrastructure, the system's overall effectiveness depends on its design, user adoption, integration with other logistics platforms, and the quality of data it maintains. Positive feedback or performance metrics from the Army regarding SAAS's contribution to readiness and efficiency would indicate its effectiveness.

What has been the historical spending trend for ammunition system IT support within the Department of the Army?

Historical spending on ammunition system IT support within the Department of the Army has likely shown a consistent upward trend over the past two decades, mirroring the broader digitization of military logistics and operations. Early systems may have been less integrated and relied on more basic IT infrastructure. As the Army modernized, investments increased in more sophisticated, networked systems like SAAS, requiring ongoing support for software development, maintenance, cybersecurity, and hardware upgrades. Specific historical dollar amounts for this exact contract or system are not provided, but the trend reflects a growing reliance on robust IT solutions to manage complex inventories and supply chains, especially for critical resources like ammunition.

What is the significance of the "Computer Systems Design Services" NAICS code (541512) in the context of this contract?

The NAICS code 541512, "Computer Systems Design Services," signifies that the primary purpose of this contract is to provide expertise in designing, developing, integrating, and implementing computer systems. This goes beyond simple hardware or software maintenance; it encompasses the analysis of user needs, the design of system architecture, the integration of hardware and software components, and potentially the development of custom software solutions. For the Army's ammunition system, this means Raytheon is likely involved in ensuring the system is optimally designed for its intended function, that different components work together seamlessly, and that the system can be adapted to evolving requirements. It highlights a focus on the strategic design and engineering of the IT infrastructure supporting critical logistics.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

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: $28,075,613

Exercised Options: $27,089,732

Current Obligation: $27,089,732

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline