DoD's $21.6M ITSS Contract with Raytheon: A 7-Year Deal with No Competition

Contract Overview

Contract Amount: $21,611,032 ($21.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2010-02-05

End Date: 2017-01-31

Contract Duration: 2,552 days

Daily Burn Rate: $8.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ANTICIPATORY LOSS USMC ITSS

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75071

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $21.6 million to RAYTHEON COMPANY for work described as: ANTICIPATORY LOSS USMC ITSS Key points: 1. The contract value of $21.6 million over 7 years represents a significant investment in IT support services. 2. Raytheon Company secured this contract without competition, raising questions about potential price discovery. 3. The absence of competition is a key risk factor, potentially leading to inflated costs. 4. This spending falls within the broader IT and defense sector, characterized by complex and long-term service agreements.

Value Assessment

Rating: questionable

The contract's duration of 7 years and lack of competitive bidding make a direct pricing assessment difficult. Without benchmarks from competing offers, it's hard to determine if the $21.6 million represents fair market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This method limits price discovery and may not yield the best value for taxpayers.

Taxpayer Impact: The lack of competition for a $21.6 million contract means taxpayers may have paid more than necessary for these IT support services.

Public Impact

Taxpayers may have overpaid due to the absence of competitive bidding. The long-term nature of the contract (7 years) locks in the provider, limiting future opportunities for cost savings. Dependence on a single vendor for critical IT support can create vulnerabilities. Transparency in government contracting is reduced when contracts are not competed.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Long contract duration
Lack of transparency in pricing

Positive Signals

Established vendor (Raytheon)
Definitive contract type

Sector Analysis

This contract for IT support services falls under the broader defense sector, which often involves large, long-term agreements. Benchmarks for similar IT support contracts can vary widely based on scope and complexity, but non-competed awards often deviate from market rates.

Small Business Impact

There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. The award to a large corporation like Raytheon suggests a focus on established, large-scale providers.

Oversight & Accountability

The sole-source nature of this contract warrants scrutiny regarding the justification for not competing. Oversight should focus on ensuring the necessity of the sole-source award and the reasonableness of the price paid.

Related Government Programs

Other Electronic and Precision Equipment Repair and Maintenance
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Lack of competition
Potential for overpricing
Long contract duration
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.6 million to RAYTHEON COMPANY. ANTICIPATORY LOSS USMC ITSS

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 $21.6 million.

What is the period of performance?

Start: 2010-02-05. End: 2017-01-31.

What was the specific justification for awarding this $21.6 million ITSS contract to Raytheon on a sole-source basis?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are justified when only one responsible source can provide the required supplies or services, or in cases of urgent and compelling need. Further investigation into the contract file would be required to ascertain the precise rationale.

How does the $21.6 million cost compare to similar IT support contracts awarded competitively over a 7-year period?

Without access to a competitive benchmark for comparable IT support services over a similar 7-year period, it is impossible to definitively assess the value for money. Sole-source contracts inherently lack direct price comparison, making it difficult to determine if taxpayers received a fair price compared to what might have been achieved through competition.

What are the potential risks associated with a 7-year sole-source IT support contract for the Department of Defense?

The primary risks include potential cost overruns due to the lack of competitive pressure, reduced innovation from the vendor, and a lack of flexibility to adapt to changing technological needs or market prices. Long-term sole-source contracts can also create vendor lock-in, making it difficult and costly to switch providers if performance issues arise or better solutions become available.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Other Electronic and Precision Equipment Repair and Maintenance

Product/Service Code: FIRE CONTROL EQPT.

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W56HZV09R0476

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2501 W UNIVERSITY DR, MCKINNEY, TX, 75071

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $21,611,032

Exercised Options: $21,611,032

Current Obligation: $21,611,032

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline