DoD Awards Raytheon $10.1M for Persistent Surveillance Systems Operations and Sustainment

Contract Overview

Contract Amount: $10,126,637 ($10.1M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2025-05-29

End Date: 2026-05-29

Contract Duration: 365 days

Daily Burn Rate: $27.7K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: THIS TASK ORDER PROVIDES OPERATIONS AND SUSTAINMENT SERVICES FOR THE PERSISTENT SURVEILLANCE DISSEMINATION SYSTEM OF SYSTEMS (PSDS2).

Place of Performance

Location: STERLING, LOUDOUN County, VIRGINIA, 20166

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $10.1 million to RAYTHEON COMPANY for work described as: THIS TASK ORDER PROVIDES OPERATIONS AND SUSTAINMENT SERVICES FOR THE PERSISTENT SURVEILLANCE DISSEMINATION SYSTEM OF SYSTEMS (PSDS2). Key points: 1. Contract focuses on critical surveillance technology operations and sustainment. 2. Raytheon Company is the sole awardee, raising questions about competition. 3. The contract's fixed-fee structure may incentivize cost control. 4. Spending is concentrated within the Defense sector, specifically Army IT/Systems.

Value Assessment

Rating: fair

The Cost Plus Fixed Fee (CPFF) contract type allows for cost reimbursement plus a fixed fee. While this can incentivize contractor efficiency, it requires robust oversight to ensure costs remain reasonable. Benchmarking against similar sustainment contracts for complex systems is difficult without more detailed cost breakdowns.

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 leads to higher costs for taxpayers compared to a competitive process. The justification for sole-sourcing is not provided.

Taxpayer Impact: The lack of competition for this $10.1 million contract may result in taxpayers paying a premium for these essential surveillance services.

Public Impact

Ensures continued operation of vital national security surveillance systems. Potential for increased costs due to sole-source award impacts taxpayer funds. Supports advanced defense technology maintenance and readiness. Lack of transparency in the procurement process could erode public trust.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
Cost-plus contract type requires diligent oversight.
Lack of justification for sole-sourcing.

Positive Signals

Ensures critical system sustainment.
Fixed fee component can incentivize efficiency.

Sector Analysis

This contract falls within the Defense sector, specifically supporting IT and systems integration for surveillance technology. Spending benchmarks for similar operations and sustainment contracts for complex defense systems can vary widely based on system criticality and technology maturity.

Small Business Impact

There is no indication that small businesses were involved in this specific contract award. Future opportunities for small businesses in the supply chain or related support services should be explored.

Oversight & Accountability

The sole-source nature of this award necessitates strong oversight from the Department of Defense to ensure cost reasonableness and performance standards are met. Robust auditing and performance monitoring are crucial for accountability.

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 cost overruns in CPFF contracts.
Lack of transparency regarding justification for sole-sourcing.
High reliance on a single contractor for critical systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.1 million to RAYTHEON COMPANY. THIS TASK ORDER PROVIDES OPERATIONS AND SUSTAINMENT SERVICES FOR THE PERSISTENT SURVEILLANCE DISSEMINATION SYSTEM OF SYSTEMS (PSDS2).

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 $10.1 million.

What is the period of performance?

Start: 2025-05-29. End: 2026-05-29.

What is the specific justification for awarding this contract on a sole-source basis, and what steps are being taken to ensure fair pricing?

The justification for a sole-source award is critical for understanding why competition was bypassed. Without this information, it's difficult to assess if the government received the best possible value. Robust auditing and price analysis by the contracting officer are essential to mitigate potential overpricing and ensure taxpayer funds are used efficiently, even in non-competitive scenarios.

How will the performance of Raytheon Company be monitored to ensure the effective sustainment of the PSDS2 system under a Cost Plus Fixed Fee contract?

Effective oversight of a CPFF contract involves rigorous performance metrics, regular progress reviews, and detailed cost tracking. The Department of Defense must establish clear deliverables, key performance indicators (KPIs), and milestones for Raytheon. Independent audits and site visits can further ensure that services are delivered as specified and that costs are reasonable and allocable to the contract.

What is the long-term strategy for the Persistent Surveillance Dissemination System of Systems (PSDS2), and how does this contract align with future modernization or replacement plans?

Understanding the PSDS2's lifecycle and future plans is crucial for evaluating the strategic value of this sustainment contract. If the system is nearing obsolescence or slated for replacement, this contract might represent a bridge to a new capability. Conversely, if PSDS2 is a long-term asset, ensuring its efficient and effective sustainment is paramount for ongoing operational readiness.

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: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL 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: $10,126,637

Exercised Options: $10,126,637

Current Obligation: $10,126,637

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