DoD's Raytheon Company Awarded $62.4M for Target Location Accuracy Engineering Services

Contract Overview

Contract Amount: $62,395,132 ($62.4M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2020-02-13

End Date: 2027-04-14

Contract Duration: 2,617 days

Daily Burn Rate: $23.8K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THIS TASK ORDER IS FOR ENGINEERING SERVICES SUPPORT AND DEVELOPMENT FOR TARGET LOCATION ACCURACY (TLA) FOR THE COMMON SENSOR PAYLOAD (CSP).

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75071

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $62.4 million to RAYTHEON COMPANY for work described as: THIS TASK ORDER IS FOR ENGINEERING SERVICES SUPPORT AND DEVELOPMENT FOR TARGET LOCATION ACCURACY (TLA) FOR THE COMMON SENSOR PAYLOAD (CSP). Key points: 1. Significant contract value of $62.4 million for specialized engineering support. 2. Sole-source award to Raytheon Company raises questions about competition and price discovery. 3. Focus on critical Target Location Accuracy (TLA) for Common Sensor Payload (CSP) indicates high-value defense application. 4. Long performance period (2020-2027) suggests ongoing need and potential for cost escalation.

Value Assessment

Rating: questionable

The contract type is Cost Plus Fixed Fee, which can lead to higher costs if not carefully managed. Without competitive bidding, it's difficult to assess if the $62.4 million price is optimal compared to similar engineering services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially increases costs for taxpayers as there was no market pressure to achieve the best value.

Taxpayer Impact: The lack of competition for this significant contract may result in taxpayers paying a premium for engineering services.

Public Impact

Enhances critical defense capabilities related to target identification and location. Supports advanced sensor technology development within the Department of Defense. Potential for long-term reliance on Raytheon for this specialized support. Impacts national security through improved precision targeting systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost Plus Fixed Fee contract type
Long performance duration

Positive Signals

Critical technology development
Experienced contractor
Clear need for services

Sector Analysis

This contract falls within the defense sector, specifically focusing on advanced sensor systems and navigation technology. Spending in this area is crucial for maintaining technological superiority, but often involves high costs due to specialized R&D and manufacturing.

Small Business Impact

The awardee is Raytheon Company, a large defense contractor. There is no indication that small businesses were involved in this specific task order, suggesting missed opportunities for small business participation.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure costs are reasonable and performance meets objectives. Robust monitoring by the Department of the Army is essential to manage the Cost Plus Fixed Fee structure effectively.

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
Cost Plus Fixed Fee contract type
Potential for cost overruns
Limited transparency on pricing
Missed small business opportunities

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $62.4 million to RAYTHEON COMPANY. THIS TASK ORDER IS FOR ENGINEERING SERVICES SUPPORT AND DEVELOPMENT FOR TARGET LOCATION ACCURACY (TLA) FOR THE COMMON SENSOR PAYLOAD (CSP).

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 $62.4 million.

What is the period of performance?

Start: 2020-02-13. End: 2027-04-14.

What is the justification for awarding this contract sole-source to Raytheon Company?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs that only a specific contractor can meet. Further investigation into the specific requirements for TLA and CSP development is needed to understand why competition was deemed impractical or impossible.

How will the Cost Plus Fixed Fee structure be managed to control costs and ensure value?

Effective management of a Cost Plus Fixed Fee contract requires stringent oversight of incurred costs, regular performance reviews, and clear definition of the fixed fee. The Department of the Army must implement robust auditing and reporting mechanisms to prevent cost overruns and ensure the contractor remains incentivized to control expenses.

What are the potential risks associated with the long performance period extending to 2027?

A long performance period increases the risk of scope creep, technological obsolescence, and potential cost increases due to inflation or unforeseen challenges. It also ties the government to a single provider for an extended duration, potentially limiting flexibility and access to newer innovations from other sources.

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: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

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: 2501 W UNIVERSITY DR, MCKINNEY, TX, 75071

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: $62,395,132

Exercised Options: $62,395,132

Current Obligation: $62,395,132

Subaward Activity

Number of Subawards: 31

Total Subaward Amount: $5,206,708

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W56KGY19D0005

IDV Type: IDC

Timeline