Raytheon Company awarded $5.9M for technical, engineering, and software services for SMART-T by the Department of the Army

Contract Overview

Contract Amount: $5,895,638 ($5.9M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2023-05-12

End Date: 2027-02-03

Contract Duration: 1,363 days

Daily Burn Rate: $4.3K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THE PURPOSE OF THIS TASK ORDER IS TO PROCURE TECHNICAL, ENGINEERING AND SOFTWARE SERVICES FOR SMART-T

Place of Performance

Location: ABERDEEN PROVING GROUND, HARFORD County, MARYLAND, 21005

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $5.9 million to RAYTHEON COMPANY for work described as: THE PURPOSE OF THIS TASK ORDER IS TO PROCURE TECHNICAL, ENGINEERING AND SOFTWARE SERVICES FOR SMART-T Key points: 1. Contract awarded for specialized technical, engineering, and software services. 2. Services are critical for the SMART-T system, indicating a need for specific expertise. 3. The contract duration extends over three years, suggesting a long-term requirement. 4. Awarded as a delivery order under a larger contract vehicle. 5. The procurement method was 'Not Competed', raising questions about market research and competition. 6. The contractor, Raytheon Company, is a major defense contractor with extensive experience. 7. The contract type is Cost Plus Fixed Fee, which can incentivize cost control but requires careful oversight.

Value Assessment

Rating: fair

The contract value of $5.9 million for technical, engineering, and software services over approximately 3.5 years appears moderate for specialized defense systems. Without specific benchmarks for SMART-T services or comparable contracts, a precise value-for-money assessment is difficult. The Cost Plus Fixed Fee (CPFF) contract type suggests that costs are reimbursed plus a fixed fee, which can be appropriate for R&D or uncertain scope, but requires robust oversight to ensure efficiency and prevent cost overruns. Benchmarking against similar technical support for complex systems would be necessary for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a 'Not Competed' delivery order, indicating that a full and open competition was not conducted. This suggests that the requirement may have been fulfilled under an existing contract vehicle where Raytheon Company was previously selected, or that specific circumstances justified a sole-source award. The lack of open competition limits the opportunity for other qualified vendors to bid, potentially impacting price discovery and innovation. Further details on the justification for not competing would be needed to fully assess the procurement strategy.

Taxpayer Impact: The absence of competition means taxpayers may not benefit from the most competitive pricing that could have been achieved through a broader solicitation process.

Public Impact

The Department of the Army benefits from specialized technical, engineering, and software services for the SMART-T system. These services are crucial for the continued operation, maintenance, and potential enhancement of the SMART-T system. The SMART-T system is likely used for critical defense operations, impacting national security. The contract supports highly skilled technical and engineering jobs within the defense industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Cost Plus Fixed Fee contract type requires diligent oversight to manage costs effectively.
Limited transparency into the justification for a sole-source award.

Positive Signals

Award to an experienced contractor (Raytheon Company) with a strong track record in defense.
Services are for a specific, likely critical, defense system (SMART-T).
Contract duration suggests a stable, long-term need for these specialized services.

Sector Analysis

This contract falls within the Information Technology and Defense sectors, specifically focusing on specialized technical, engineering, and software services for a defense system. The North American Industry Classification System (NAICS) code 334511, 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing,' further categorizes this spending. The market for such specialized services is often dominated by large defense contractors due to the high barriers to entry, including security clearances, specialized knowledge, and existing relationships with government agencies. Comparable spending would involve other contracts for system development, integration, and sustainment for complex defense platforms.

Small Business Impact

The data indicates that this contract was not competed and does not appear to have a small business set-aside component (ss: false, sb: false). As a sole-source award to a large prime contractor, there is no direct indication of subcontracting opportunities for small businesses within this specific task order. However, large defense contractors like Raytheon Company often have established subcontracting plans. The impact on the small business ecosystem would depend on whether Raytheon utilizes small businesses for any portion of these services, which is not explicitly detailed in the provided data.

Oversight & Accountability

The contract is a Cost Plus Fixed Fee (CPFF) type, which necessitates robust oversight to ensure that costs are reasonable and the fixed fee is earned appropriately. Oversight mechanisms would typically involve contract officers, technical representatives, and potentially auditors from agencies like the Defense Contract Audit Agency (DCAA). Transparency is generally maintained through contract databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Defense Research and Development
Defense Information Technology Services
Military Systems Engineering Support
Navigation and Guidance Systems Procurement

Risk Flags

Sole-source award raises concerns about potential lack of competition and optimal pricing.
Cost Plus Fixed Fee contract type requires diligent government oversight to manage costs.
Limited public information on the specific justification for the sole-source award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $5.9 million to RAYTHEON COMPANY. THE PURPOSE OF THIS TASK ORDER IS TO PROCURE TECHNICAL, ENGINEERING AND SOFTWARE SERVICES FOR SMART-T

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 $5.9 million.

What is the period of performance?

Start: 2023-05-12. End: 2027-02-03.

What is the specific function and importance of the SMART-T system that necessitates these specialized services?

The SMART-T system, which stands for Secure Mobile Anti-Jam Tactical Terminal, is a critical component of the U.S. military's communication infrastructure. It provides secure, jam-resistant satellite communications capabilities, enabling reliable voice and data transmission for tactical units in challenging operational environments. Its importance lies in ensuring battlefield awareness, command and control, and the secure exchange of sensitive information, which are vital for mission success and soldier safety. The technical, engineering, and software services procured under this contract are essential for maintaining, upgrading, and ensuring the operational readiness and security of this vital communication system, particularly in the face of evolving threats and technological advancements.

What is the justification for awarding this contract on a sole-source basis rather than through full and open competition?

The justification for awarding this contract on a sole-source basis, as indicated by 'NOT COMPETED', typically stems from specific circumstances outlined in federal acquisition regulations. Common reasons include that the services are available only from a limited number of sources, the requirement is a follow-on to a previously competed contract where the original contractor possesses unique knowledge or capabilities, or there's an urgent need that precludes a competitive process. For a specialized system like SMART-T, it's plausible that Raytheon Company, as the original developer or a key integrator, possesses unique technical data, intellectual property, or specialized expertise essential for its continued support. A formal Justification for Other Than Full and Open Competition (JOFOC) would detail these specific reasons and demonstrate why competition was not feasible or not in the government's best interest.

How does the Cost Plus Fixed Fee (CPFF) contract type influence cost control and contractor performance for these services?

The Cost Plus Fixed Fee (CPFF) contract type aims to balance cost reimbursement with contractor incentive. The contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing their profit. This structure is often used when the scope of work is not precisely defined or involves research and development, making it difficult to establish a firm fixed price upfront. For cost control, the 'fixed fee' element provides an incentive for the contractor to manage costs efficiently, as their profit is capped. However, it also requires rigorous government oversight to ensure that all costs claimed are reasonable, allocable, and allowable. Without strong oversight, there's a risk of cost escalation, as the contractor is guaranteed cost recovery and a profit regardless of the final cost. Effective performance management is crucial to ensure the contractor delivers the required technical, engineering, and software services within the anticipated cost parameters.

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

Raytheon Company, now part of RTX, has an extensive and long-standing track record of providing a wide array of technical, engineering, and software services to the Department of Defense (DoD) and other government agencies. They are a major defense contractor involved in developing, integrating, and sustaining complex systems across various domains, including command and control, intelligence, surveillance, reconnaissance, and communications. Their experience spans numerous platforms and programs, often involving sophisticated software development, systems engineering, cybersecurity, and lifecycle support. Given their significant presence and capabilities in the defense sector, it is highly probable that they have successfully executed numerous contracts similar in nature to this task order, supporting critical defense systems and demonstrating proficiency in the required service areas.

Are there any performance metrics or key performance indicators (KPIs) associated with this contract to measure success?

The provided data does not explicitly detail the performance metrics or Key Performance Indicators (KPIs) for this specific task order. However, for a Cost Plus Fixed Fee contract involving technical, engineering, and software services for a critical system like SMART-T, performance is typically measured against several criteria. These often include adherence to technical specifications, delivery schedules for software updates or engineering reports, system uptime and reliability, cybersecurity compliance, and the effectiveness of technical support provided. The government's Contracting Officer's Representative (COR) or Technical Point of Contact (TPOC) would be responsible for monitoring these aspects. While not listed here, such metrics are usually defined in the contract's Statement of Work (SOW) or Performance Work Statement (PWS) to ensure the contractor meets the government's requirements and objectives.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE 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: RTX Corp

Address: 350 LOWELL ST, ANDOVER, MA, 01810

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: $5,895,638

Exercised Options: $5,895,638

Current Obligation: $5,895,638

Actual Outlays: $401,499

Contract Characteristics

Consolidated Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: SPRBL115D0017

IDV Type: IDC

Timeline