DoD Awards Raytheon $129M for 3Gen FLIR B-Kit, Raising Questions on Value and Competition
Contract Overview
Contract Amount: $129,287,813 ($129.3M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2016-03-16
End Date: 2022-01-06
Contract Duration: 2,122 days
Daily Burn Rate: $60.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: IGF::OT::IGF ENGINEERING MANUFACTURING AND DEVELOPMENT (EMD) OF THE 3GEN FLIR B-KIT AND AN OPTION FOR THE B-KIT MANUFACTURING AND PRODUCTION READINESS SUPPORT.
Place of Performance
Location: RICHARDSON, DALLAS County, TEXAS, 75081
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $129.3 million to RAYTHEON COMPANY for work described as: IGF::OT::IGF ENGINEERING MANUFACTURING AND DEVELOPMENT (EMD) OF THE 3GEN FLIR B-KIT AND AN OPTION FOR THE B-KIT MANUFACTURING AND PRODUCTION READINESS SUPPORT. Key points: 1. Significant contract value of $129.3M for advanced thermal imaging technology. 2. Raytheon Company, a major defense contractor, is the sole awardee. 3. Potential concerns regarding the effectiveness of full and open competition for this specialized equipment. 4. Spending falls within the broader 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector.
Value Assessment
Rating: questionable
The contract type is Cost Plus Incentive Fee (CPIF), which can lead to cost overruns if not managed tightly. Benchmarking per-unit cost is difficult without more detailed specifications and comparison to similar advanced FLIR systems.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Despite being awarded under 'full and open competition,' the single award to Raytheon suggests limited bidders or a highly specialized requirement. The impact on price discovery is uncertain; while competition theoretically drives down prices, a lack of strong contenders could limit this effect.
Taxpayer Impact: Taxpayer funds are allocated for advanced defense technology. The CPIF contract structure necessitates careful oversight to ensure cost efficiency and prevent unnecessary expenditure.
Public Impact
Enhances battlefield situational awareness for Army personnel with advanced thermal imaging. Supports critical defense capabilities, potentially impacting soldier safety and mission success. The long duration (2122 days) indicates a substantial, long-term investment in this technology.
Waste & Efficiency Indicators
Waste Risk Score: 60 / 10
Warning Flags
- Potential for cost overruns with CPIF contract type.
- Limited visibility into true competitive landscape despite 'full and open' designation.
- High reliance on a single contractor for critical technology.
Positive Signals
- Awarded for advanced, potentially mission-critical technology.
- Long-term contract provides stability for development and production.
- Supports Department of Defense modernization efforts.
Sector Analysis
This contract falls under the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector, which is a significant area of defense spending. Benchmarks for similar advanced sensor systems can vary widely based on technological sophistication and scale.
Small Business Impact
The data indicates this contract was not set aside for small businesses and that the awardee, Raytheon Company, is a large corporation. There is no indication of small business participation in this specific award.
Oversight & Accountability
The Cost Plus Incentive Fee (CPIF) contract type requires robust oversight from the Department of the Army to ensure Raytheon meets performance targets and cost controls. Regular audits and performance reviews 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
- Potential for cost overruns due to CPIF contract type.
- Limited competitive landscape despite 'full and open' designation.
- High reliance on a single, large defense contractor.
- Lack of specific per-unit cost benchmark.
- Uncertainty regarding the true impact of competition on price discovery.
Tags
search-detection-navigation-guidance-aer, department-of-defense, tx, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $129.3 million to RAYTHEON COMPANY. IGF::OT::IGF ENGINEERING MANUFACTURING AND DEVELOPMENT (EMD) OF THE 3GEN FLIR B-KIT AND AN OPTION FOR THE B-KIT MANUFACTURING AND PRODUCTION READINESS SUPPORT.
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 $129.3 million.
What is the period of performance?
Start: 2016-03-16. End: 2022-01-06.
What specific technical advancements does the 3Gen FLIR B-Kit offer over previous generations, and how do these justify the $129M investment?
The 3Gen FLIR B-Kit likely incorporates next-generation thermal imaging technology, potentially offering enhanced resolution, longer detection ranges, improved target discrimination in adverse conditions (e.g., smoke, fog), and reduced size, weight, and power (SWaP). These advancements are crucial for maintaining battlefield superiority and improving soldier effectiveness. The $129M investment reflects the R&D, complex manufacturing, and integration required for such cutting-edge systems, aiming to provide a significant operational advantage.
Given the 'full and open competition' designation, why was there only one awardee (Raytheon), and what does this imply about the competitive landscape for this technology?
A single award under 'full and open competition' can suggest that only one company possessed the highly specialized technology, manufacturing capabilities, or met the stringent requirements outlined in the solicitation. It might also indicate that other potential competitors chose not to bid due to perceived risks, high entry costs, or a lack of alignment with the specific contract terms. This scenario raises questions about the true breadth of competition and potential price discovery limitations.
How will the Cost Plus Incentive Fee (CPIF) structure be managed to ensure taxpayer value and prevent potential cost overruns for this long-duration contract?
Effective management of the CPIF structure requires the Department of the Army to establish clear, measurable performance targets and realistic cost ceilings. Incentive fees should be tied to achieving specific technical milestones, delivery schedules, and cost efficiencies. Robust program oversight, regular audits, and transparent reporting from Raytheon are essential to monitor expenditures, validate progress, and ensure that incentives align with achieving the best possible value for the taxpayer within the contract's scope.
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: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: W909MY15RC003
Offers Received: 2
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: Rockwell Collins Australia PTY Limited
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: $145,970,693
Exercised Options: $135,882,392
Current Obligation: $129,287,813
Subaward Activity
Number of Subawards: 33
Total Subaward Amount: $71,544,787
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2016-03-16
Current End Date: 2022-01-06
Potential End Date: 2031-03-03 12:03:00
Last Modified: 2025-03-04
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