Army awards $28.58M for 21 Common Sensor Payloads to Raytheon Company, a sole-source procurement

Contract Overview

Contract Amount: $28,581,000 ($28.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2017-09-29

End Date: 2019-03-31

Contract Duration: 548 days

Daily Burn Rate: $52.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: UNDEFINITIZED CONTRACTUAL ACTION TO PROCURE 21 COMMON SENSOR PAYLOAD UNITS.

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75071

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $28.6 million to RAYTHEON COMPANY for work described as: UNDEFINITIZED CONTRACTUAL ACTION TO PROCURE 21 COMMON SENSOR PAYLOAD UNITS. Key points: 1. Value: $28.58 million for 21 sensor units. 2. Competition: Sole-source award to Raytheon Company. 3. Risk: Potential for higher costs due to lack of competition. 4. Sector: Defense - IT/Aerospace systems.

Value Assessment

Rating: questionable

The contract's pricing is difficult to assess without competitive benchmarks. Given it's a sole-source award, there's a risk that the price may not reflect the most cost-effective option available.

Cost Per Unit: $1,361,000

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Raytheon Company. This limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: Taxpayer funds are used for this procurement. The lack of competition may result in a higher overall cost compared to a competitively awarded contract.

Public Impact

Procurement of critical sensor technology for military applications. Potential impact on defense readiness and technological advancement. Sole-source award raises questions about government procurement efficiency.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source procurement
Lack of competitive bidding
Potential for cost overruns

Positive Signals

Acquisition of essential defense technology
Definitive contract type

Sector Analysis

This contract falls within the Defense sector, specifically related to the manufacturing of search, detection, and navigation systems. Spending in this area is critical for national security, but often involves specialized technology where competition can be limited.

Small Business Impact

This contract was awarded to Raytheon Company, a large business. There is no indication that small businesses were involved in this specific procurement action.

Oversight & Accountability

The award was made by the Department of the Army. Oversight would focus on ensuring the delivered sensor payloads meet specifications and that the pricing, despite being sole-source, is justifiable.

Related Government Programs

Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award limits competition.
Potential for inflated pricing.
Lack of transparency in price justification.
Dependency on a single supplier.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.6 million to RAYTHEON COMPANY. UNDEFINITIZED CONTRACTUAL ACTION TO PROCURE 21 COMMON SENSOR PAYLOAD UNITS.

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 $28.6 million.

What is the period of performance?

Start: 2017-09-29. End: 2019-03-31.

What is the justification for the sole-source award, and were alternative solutions considered?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or a lack of viable alternatives. The Department of the Army would need to document why Raytheon Company was the only source capable of meeting the requirement within the necessary timeframe and specifications.

How does the per-unit cost compare to similar sensor payloads acquired through competitive means?

Without access to classified or proprietary data on comparable systems, a direct comparison is challenging. However, the $1.36 million per-unit cost should be benchmarked against publicly available data for similar, non-proprietary sensor systems to identify potential price discrepancies.

What is the long-term strategy for acquiring these sensor payloads to ensure future cost-effectiveness?

The long-term strategy should explore options to foster competition, such as breaking down the requirement into smaller components, encouraging new market entrants, or developing alternative technologies. This could involve market research and potential future solicitations designed to attract a broader range of bidders.

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: FIRE CONTROL EQPT.

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2501 W UNIVERSITY DR, MCKINNEY, TX, 75070

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: $28,581,000

Exercised Options: $28,581,000

Current Obligation: $28,581,000

Subaward Activity

Number of Subawards: 17

Total Subaward Amount: $1,664,704

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline