DoD awards Raytheon $113M for Exportable Combat Training Services, raising concerns about competition

Contract Overview

Contract Amount: $113,088,643 ($113.1M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2019-01-29

End Date: 2020-09-30

Contract Duration: 610 days

Daily Burn Rate: $185.4K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: EXPORTABLE COMBAT TRAINING CAPABILITY SERVICES

Place of Performance

Location: FREMONT, ALAMEDA County, CALIFORNIA, 94539

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $113.1 million to RAYTHEON COMPANY for work described as: EXPORTABLE COMBAT TRAINING CAPABILITY SERVICES Key points: 1. Significant contract value of $113M for specialized training services. 2. Sole provider, Raytheon Company, dominates this niche. 3. Lack of competition poses a risk to optimal pricing and innovation. 4. Engineering services sector, with a focus on defense applications.

Value Assessment

Rating: questionable

The contract value of $113M is substantial. Without competitive bidding, it's difficult to assess if this price reflects fair market value compared to similar training services. Benchmarking is challenging due to the specialized nature and lack of comparable contracts.

Cost Per Unit: N/A

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 taxpayers as there was no market pressure to offer competitive pricing.

Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for these essential combat training services.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. Limited visibility into the effectiveness and efficiency of the training provided. Potential for reduced innovation in training methodologies without market competition.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
High contract value
Limited transparency

Positive Signals

Essential defense capability
Experienced contractor

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense capabilities. The $113M award is significant for this niche, highlighting the substantial investment in advanced military training solutions.

Small Business Impact

There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. The sole-source nature likely precluded opportunities for small business participation.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure the contractor is delivering services effectively and at a reasonable cost. Accountability mechanisms should be robust given the lack of competitive pressure.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award limits competition.
Potential for inflated costs due to lack of bidding.
Limited transparency on performance metrics.
No clear indication of small business participation.
High contract value warrants scrutiny.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $113.1 million to RAYTHEON COMPANY. EXPORTABLE COMBAT TRAINING CAPABILITY SERVICES

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 $113.1 million.

What is the period of performance?

Start: 2019-01-29. End: 2020-09-30.

What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure the price was fair and reasonable?

The justification for a sole-source award typically involves unique capabilities or circumstances where only one source can meet the requirement. For this contract, the Department of Defense would need to provide documentation detailing why competition was not feasible. Steps to ensure fair and reasonable pricing in sole-source situations often include detailed cost analysis, comparison to historical data, and independent government cost estimates.

How will the effectiveness and value of the training services be measured and validated without competitive benchmarks?

Effectiveness will likely be measured through predefined performance metrics and key performance indicators (KPIs) outlined in the contract. The Department of the Army would need to establish clear standards for training outcomes, soldier proficiency, and operational readiness. Regular reviews and feedback mechanisms from end-users (military personnel) are crucial for validating the value and impact of the training.

What is the long-term strategy for acquiring these training capabilities, and will future procurements include competitive elements?

The long-term strategy is unclear from this data alone. Future procurements should ideally incorporate competitive elements to drive innovation and cost savings, unless a continued sole-source justification is rigorously maintained. Exploring options for breaking down the requirement into smaller, more competitive components or seeking alternative solutions could be considered.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp (UEI: 001344142)

Address: 12792 RESEARCH PKWY, ORLANDO, FL, 32826

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: $120,066,749

Exercised Options: $113,088,643

Current Obligation: $113,088,643

Actual Outlays: $2,416,081

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W900KK18D0008

IDV Type: IDC

Timeline