Raytheon Company awarded $72.7M Army training support contract in Kuwait, a sole-source delivery order

Contract Overview

Contract Amount: $72,728,009 ($72.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2019-09-30

End Date: 2020-09-29

Contract Duration: 365 days

Daily Burn Rate: $199.3K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THIS TASK ORDER IS FOR THE UNITED STATES ARMY CENTRAL COMMAND (ARCENT) TRAINING SUPPORT SERVICES (TSS) EFFORT IN KUWAIT

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32826

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $72.7 million to RAYTHEON COMPANY for work described as: THIS TASK ORDER IS FOR THE UNITED STATES ARMY CENTRAL COMMAND (ARCENT) TRAINING SUPPORT SERVICES (TSS) EFFORT IN KUWAIT Key points: 1. Contract awarded on a firm-fixed-price basis, indicating clear cost expectations. 2. The contract was not competed, raising questions about potential price efficiencies. 3. Performance period of 365 days suggests a focused, short-term support requirement. 4. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle. 5. Services are for training support in Kuwait, aligning with regional Army operations. 6. Contractor is Raytheon Company, a major defense contractor with extensive experience.

Value Assessment

Rating: questionable

Benchmarking the value of this $72.7 million contract is challenging without knowing the specific services and deliverables. As a sole-source award, there was no direct price competition to establish a market-driven rate. However, given Raytheon's established presence and the nature of training support services, the price may reflect specialized expertise and operational tempo. Further analysis would require comparing the scope of work to similar training support contracts awarded competitively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities or when urgency precludes a competitive process. The lack of competition means that taxpayers did not benefit from potential cost savings that could arise from a bidding process.

Taxpayer Impact: Sole-source awards limit opportunities for other businesses to compete for government contracts and can potentially lead to higher prices due to the absence of competitive pressure.

Public Impact

The primary beneficiaries are the United States Army Central Command (ARCENT) personnel operating in Kuwait, who will receive enhanced training. Services delivered include training support, crucial for maintaining operational readiness and effectiveness of military forces. The geographic impact is focused on Kuwait, supporting U.S. military presence and operations in the region. Workforce implications may include the deployment of specialized trainers and support staff, potentially including local hires or contractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have resulted in a higher price than a competed contract.
Sole-source awards can limit opportunities for small businesses to participate.
Transparency regarding the specific justification for sole-source award could be enhanced.

Positive Signals

Award to Raytheon Company suggests a contractor with proven capabilities in defense support.
Firm-fixed-price contract provides cost certainty for the government.
Contract supports critical training needs for Army operations in a key region.

Sector Analysis

This contract falls within the Engineering Services sector, specifically related to defense support and training. The broader defense services market is substantial, with significant government spending allocated to operational support, logistics, and training. Raytheon is a major player in this sector, often securing large contracts for complex defense systems and services. Benchmarking would involve comparing this contract's value to other training and support service contracts awarded to large defense contractors.

Small Business Impact

As this contract was awarded on a sole-source basis and there is no indication of small business set-asides or subcontracting plans, the direct impact on the small business ecosystem is likely minimal. Large sole-source awards often bypass the competitive bidding process where small businesses typically find opportunities. Without specific subcontracting requirements, there is no explicit mechanism to ensure small business participation.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army and ARCENT leadership. Accountability measures are inherent in the firm-fixed-price structure, requiring Raytheon to deliver specified services within the agreed budget. Transparency regarding the sole-source justification and performance metrics would be key to assessing overall oversight effectiveness. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Army Training Support Services
Defense Contractor Support Services
Middle East Military Operations Support
Raytheon Company Contracts
Sole-Source Defense Contracts

Risk Flags

Sole-source award lacks competitive pricing.
Potential for cost overruns without competitive pressure.
Limited transparency on justification for sole-source.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $72.7 million to RAYTHEON COMPANY. THIS TASK ORDER IS FOR THE UNITED STATES ARMY CENTRAL COMMAND (ARCENT) TRAINING SUPPORT SERVICES (TSS) EFFORT IN KUWAIT

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 $72.7 million.

What is the period of performance?

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

What is the specific scope of 'Training Support Services' covered under this contract?

The provided data indicates the contract is for 'United States Army Central Command (ARCENT) Training Support Services (TSS) Effort in Kuwait.' While the exact scope is not detailed, 'Training Support Services' in a military context typically encompasses a wide range of activities. This can include curriculum development, instructional delivery (classroom, simulation, field exercises), logistical support for training events, maintenance of training equipment, range operations, and potentially advisory roles. Given the location in Kuwait, these services likely support ARCENT's operational readiness and the training of forces deployed or operating within that theater. The firm-fixed-price nature suggests a defined set of services with a set cost, implying the scope was sufficiently understood at the time of award.

Why was this contract awarded on a sole-source basis instead of being competed?

The data explicitly states the contract was 'NOT COMPETED,' classifying it as sole-source. Government contracts are typically competed to ensure fair pricing and broad access to qualified vendors. Sole-source awards are exceptions, usually justified under specific circumstances outlined in federal acquisition regulations (FAR). Common justifications include urgency, the unique capability of a single contractor, or when the contract is a follow-on to a previously competed effort where only the original contractor can provide the necessary services or equipment. Without further documentation, the precise reason for this sole-source award to Raytheon Company for ARCENT's training support in Kuwait remains unspecified, but it implies a determination that competition was not feasible or advantageous.

How does the $72.7 million value compare to similar training support contracts?

Directly comparing the $72.7 million value of this sole-source contract to similar training support contracts is difficult without more specific details on the services rendered and the contract duration. However, $72.7 million for a one-year (365-day duration) training support effort in a high-operational tempo region like Kuwait, awarded to a major defense contractor like Raytheon, is substantial. Competitively awarded contracts for similar services might yield different price points depending on the number of bidders and the specific requirements. Sole-source awards, by their nature, lack a competitive benchmark, making it harder to ascertain if this represents optimal value for money. Further analysis would require examining the contract's statement of work and comparing it against publicly available data for other training support contracts.

What are the potential risks associated with a sole-source award of this magnitude?

A primary risk associated with a sole-source award of this magnitude ($72.7 million) is the potential for inflated pricing due to the absence of competitive pressure. Without multiple bidders vying for the contract, the government may not achieve the most cost-effective outcome. Another risk is reduced innovation, as a single contractor may have less incentive to develop novel or more efficient solutions compared to a competitive environment. Furthermore, sole-source awards can limit opportunities for other capable companies, including small businesses, to enter the market or expand their footprint within the defense sector. Ensuring robust oversight and clear performance metrics becomes even more critical to mitigate these risks.

What is Raytheon Company's track record with similar government contracts?

Raytheon Company (now RTX) has an extensive and long-standing track record of performing complex defense and aerospace contracts for the U.S. government and international allies. They are a major defense contractor involved in developing, manufacturing, and supporting a wide array of systems, including missiles, radar, command and control systems, and training solutions. Their experience spans numerous operational theaters and support functions, including training services similar to what is described here. While specific performance details for this particular Kuwaiti training support contract are not provided, Raytheon's general history suggests they possess the technical expertise and logistical capabilities required for such an undertaking. However, like any large contractor, they have also faced scrutiny and performance reviews on various contracts throughout their history.

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

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: $72,728,009

Exercised Options: $72,728,009

Current Obligation: $72,728,009

Actual Outlays: $1,640,318

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W900KK18D0008

IDV Type: IDC

Timeline