Raytheon Company awarded $33.6M for Exportable Combat Training Capability Services by the Department of the Army

Contract Overview

Contract Amount: $33,616,187 ($33.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2020-09-29

End Date: 2021-09-28

Contract Duration: 364 days

Daily Burn Rate: $92.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Defense

Official Description: EXPORTABLE COMBAT TRAINING CAPABILITY SERVICES

Place of Performance

Location: STERLING, LOUDOUN County, VIRGINIA, 20166

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $33.6 million to RAYTHEON COMPANY for work described as: EXPORTABLE COMBAT TRAINING CAPABILITY SERVICES Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. The contract duration of 364 days suggests a focused, short-term requirement. 3. The 'COST NO FEE' contract type indicates the government bears the cost of performance, with no fee paid to the contractor. 4. Engineering Services (NAICS 541330) are critical for complex defense systems. 5. The contract's value is moderate within the broader defense services sector. 6. Virginia is the primary state associated with this contract.

Value Assessment

Rating: fair

The contract's 'COST NO FEE' structure means the government covers all expenses without an additional profit margin for the contractor. This can sometimes lead to less incentive for cost control by the contractor compared to fixed-price contracts. Benchmarking value is difficult without knowing the specific services rendered and the associated costs incurred by Raytheon. However, the absence of a fee suggests a focus on cost recovery rather than profit generation for this specific award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Raytheon Company, was solicited. This significantly limits competition and potentially impacts price discovery. Without a competitive bidding process, it is difficult to ascertain if the government received the best possible pricing. Sole-source awards are typically justified when a unique capability or urgent need exists that only one contractor can fulfill.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as the benefits of competition, such as lower prices and innovative solutions, are forgone.

Public Impact

The primary beneficiaries are likely military personnel who will utilize the training capabilities. Services delivered are expected to enhance combat readiness and training effectiveness. The geographic impact is primarily within the United States, with potential for international application of training capabilities. Workforce implications include specialized engineering and technical roles required for the development and delivery of training systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost-plus contract types can sometimes lead to less stringent cost controls.
Lack of detailed performance metrics in the provided data makes assessing effectiveness challenging.

Positive Signals

Award to a known, experienced defense contractor like Raytheon suggests a degree of reliability.
The contract addresses a critical defense need for combat training capabilities.
The 'COST NO FEE' structure may indicate a focus on direct cost recovery for essential services.

Sector Analysis

The defense services sector is characterized by complex, high-value contracts often involving specialized engineering and technology. Companies like Raytheon are major players, providing a wide range of capabilities from weapons systems to training solutions. Spending in this area is driven by national security requirements and technological advancements. Comparable spending benchmarks would typically involve other large-scale defense training or simulation contracts, which often run into tens or hundreds of millions of dollars.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor, Raytheon Company, is a large defense firm. There is no explicit information regarding subcontracting plans for small businesses within the provided data. This suggests that the primary focus of this contract is not on engaging the small business ecosystem, and opportunities for small businesses may be limited unless they are direct suppliers to Raytheon.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Given the 'COST NO FEE' structure, rigorous financial oversight would be expected to ensure that incurred costs are reasonable and allocable to the contract. Transparency is often limited in sole-source defense contracts, but reporting requirements would be dictated by the contract terms. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Exportable Combat Training Capability (ECTC)
Simulation and Training Systems
Defense Engineering Services
Military Readiness Programs

Risk Flags

Sole-source award limits competition.
Cost-plus contract type requires robust oversight for cost control.
Lack of detailed performance metrics hinders effectiveness assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.6 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 $33.6 million.

What is the period of performance?

Start: 2020-09-29. End: 2021-09-28.

What specific training capabilities are being provided under this contract?

The provided data indicates the contract is for 'EXPORTABLE COMBAT TRAINING CAPABILITY SERVICES.' While the specific nature of these services is not detailed, it generally refers to systems, equipment, and support that enable military forces to conduct realistic combat training exercises. This could encompass simulation software, virtual reality training environments, live-fire range support, or mobile training units that can be deployed internationally. The 'COST NO FEE' structure suggests the government is covering the direct costs associated with developing, delivering, or maintaining these training capabilities, with Raytheon not earning a profit margin on this specific award.

How does the 'COST NO FEE' contract type compare to other contract types for similar services?

The 'COST NO FEE' (CNF) contract type is relatively uncommon and typically used in specific circumstances where the government wants to ensure essential services are provided without the contractor realizing a profit. It differs significantly from cost-plus-incentive-fee (CPIF) or cost-plus-award-fee (CPAF) contracts, where the contractor can earn additional profit based on performance. It also differs from fixed-price contracts (e.g., FFP, FP-EPA), where the price is set upfront. For defense training services, cost-plus contracts with fee or fixed-price contracts are more common, allowing for profit and incentivizing cost efficiency. The CNF structure here suggests a focus on direct cost recovery for critical, potentially urgent, training support, rather than market-driven pricing or performance-based profit.

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

Raytheon Company, now part of RTX, has an extensive and long-standing track record in providing advanced defense systems, including simulation and training solutions, to the U.S. military and allied nations. They are known for developing sophisticated technologies for combat training, such as virtual combat simulators, live-fire training ranges, and integrated training environments. Their experience spans decades and includes numerous large-scale contracts for complex defense programs. While specific details of past 'COST NO FEE' contracts are not readily available, Raytheon's overall performance in delivering complex defense capabilities suggests a high level of technical expertise and program execution capability relevant to this contract.

What are the potential risks associated with a sole-source, 'COST NO FEE' contract for training services?

The primary risks associated with this contract structure are related to cost control and potential inefficiencies. Since the contractor does not earn a fee, their incentive to minimize costs might be reduced compared to fixed-price or cost-plus-fee contracts. The government bears all costs incurred. Additionally, the sole-source nature means there was no competitive bidding, potentially leading to a higher overall cost than if multiple vendors had competed. Oversight is critical to ensure that Raytheon's incurred costs are reasonable, allocable, and allowable. Without competitive pressure, there's also a risk that innovation might be stifled, although Raytheon's established expertise may mitigate this.

How does this contract's value compare to historical spending on similar combat training capabilities?

The $33.6 million award for Exportable Combat Training Capability Services is a moderate-sized contract within the broader defense sector. Historical spending on combat training systems and services can vary significantly, with major simulation and training programs often costing hundreds of millions or even billions of dollars over their lifecycle. For instance, large-scale simulator procurements or modernization efforts for entire training ranges can far exceed this amount. However, for a specific, potentially short-duration service requirement like this appears to be (364-day duration), $33.6 million represents a substantial investment. Benchmarking requires comparing it to similar scope and duration contracts, which are not detailed here.

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

Solicitation ID: W900KK20R0076

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 22260 PACIFIC BLVD, DULLES, VA, 20166

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: $38,807,490

Exercised Options: $34,005,763

Current Obligation: $33,616,187

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $4,248,187

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline