DoD awards Raytheon $32.3M for 200 Thermal Receiver Units for Morocco's Abrams Tanks
Contract Overview
Contract Amount: $32,296,251 ($32.3M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2015-08-31
End Date: 2018-01-31
Contract Duration: 884 days
Daily Burn Rate: $36.5K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: THIS IS A FOREIGN MILITARY SALES LETTER CONTRACT FOR THE PURCHASE OF 200 THERMAL RECEIVER UNITS (TRUS) TO SUPPORT KINGDOM OF MOROCCO ABRAMS TANKS ENHANCEMENT/CONVERSION PROGRAM.
Place of Performance
Location: MCKINNEY, COLLIN County, TEXAS, 75070
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $32.3 million to RAYTHEON COMPANY for work described as: THIS IS A FOREIGN MILITARY SALES LETTER CONTRACT FOR THE PURCHASE OF 200 THERMAL RECEIVER UNITS (TRUS) TO SUPPORT KINGDOM OF MOROCCO ABRAMS TANKS ENHANCEMENT/CONVERSION PROGRAM. Key points: 1. Spending supports foreign military sales, enhancing allied defense capabilities. 2. Contract awarded to Raytheon Company, a major defense contractor. 3. Risk of overpricing due to limited competition for specialized equipment. 4. Sector: Defense manufacturing, specifically targeting advanced military systems.
Value Assessment
Rating: fair
The contract value of $32.3 million for 200 units suggests a per-unit cost of approximately $161,481. This price needs comparison against similar thermal receiver units for military applications, considering technological sophistication and volume.
Cost Per Unit: $161,481
Competition Analysis
Competition Level: limited
The contract is not available for competition, indicating a sole-source or limited competition scenario. This lack of competitive bidding may lead to higher prices than if multiple vendors were involved in the procurement process.
Taxpayer Impact: Taxpayer funds are used for foreign military sales, impacting the defense budget and potentially reducing funds available for domestic defense needs.
Public Impact
Enhances military capabilities of an allied nation (Kingdom of Morocco). Supports the Abrams Main Battle Tank program, a key US-made defense platform. Contributes to the defense industrial base through foreign military sales.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition may inflate costs.
- Foreign military sales can be complex to track and manage.
- Dependence on a single contractor for specialized components.
Positive Signals
- Supports a key ally's defense modernization.
- Procurement of advanced defense technology.
- Strengthens relationships with international partners.
Sector Analysis
This contract falls within the defense manufacturing sector, specifically focusing on advanced electronic systems for military vehicles. Spending benchmarks for similar specialized components can vary widely based on technology and scale, but this appears to be a significant investment for a niche product.
Small Business Impact
The contract was awarded to Raytheon Company, a large prime contractor. There is no indication that small businesses were involved as subcontractors or partners in this specific award, suggesting limited direct impact on the small business sector for this procurement.
Oversight & Accountability
The Department of Defense, through the Department of the Army, managed this Foreign Military Sales contract. Oversight would focus on ensuring delivery of specified units and adherence to the firm fixed price agreement, with accountability for meeting the needs of the partner nation.
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
- Lack of competition may lead to higher costs.
- Potential for supply chain disruptions.
- Dependence on a single manufacturer.
- Complexity of managing foreign military sales.
Tags
search-detection-navigation-guidance-aer, department-of-defense, tx, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $32.3 million to RAYTHEON COMPANY. THIS IS A FOREIGN MILITARY SALES LETTER CONTRACT FOR THE PURCHASE OF 200 THERMAL RECEIVER UNITS (TRUS) TO SUPPORT KINGDOM OF MOROCCO ABRAMS TANKS ENHANCEMENT/CONVERSION PROGRAM.
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 $32.3 million.
What is the period of performance?
Start: 2015-08-31. End: 2018-01-31.
What is the justification for limiting competition on this contract, and how was the price determined to be fair and reasonable?
The justification for limited competition typically stems from unique technical requirements, proprietary technology, or the need for compatibility with existing systems. Price reasonableness is usually determined through market research, comparison with similar items, or cost analysis of the contractor's proposal. Without specific documentation, it's difficult to ascertain the exact rationale.
What are the long-term implications of relying on a single supplier for critical thermal receiver units for allied military hardware?
Long-term reliance on a single supplier can create vulnerabilities, including potential supply chain disruptions, price escalations, and reduced innovation. It also limits the government's leverage in future negotiations. Diversifying suppliers or developing alternative technologies could mitigate these risks, though it may require significant upfront investment.
How does this expenditure align with broader US foreign policy objectives and defense strategy in the Middle East?
This expenditure likely aligns with US foreign policy by strengthening a regional partner's defense capabilities, promoting stability, and enhancing interoperability with US forces. It supports the broader strategy of building partner capacity and deterring potential adversaries through the provision of advanced military equipment.
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: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 2501 W UNIVERSITY DR, MCKINNEY, TX, 75070
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: $32,296,251
Exercised Options: $32,296,251
Current Obligation: $32,296,251
Subaward Activity
Number of Subawards: 8
Total Subaward Amount: $20,343,881
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2015-08-31
Current End Date: 2018-01-31
Potential End Date: 2018-01-31 12:01:00
Last Modified: 2017-12-01
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