Army Awards $39M Raytheon Contract for Abrams Tank Components, Not Competed

Contract Overview

Contract Amount: $38,960,495 ($39.0M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2020-02-13

End Date: 2022-04-30

Contract Duration: 807 days

Daily Burn Rate: $48.3K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER FOR CITV COMPONENTS FOR PM ABRAMS

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75071

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $39.0 million to RAYTHEON COMPANY for work described as: DELIVERY ORDER FOR CITV COMPONENTS FOR PM ABRAMS Key points: 1. Significant award to Raytheon for critical tank components. 2. Lack of competition raises concerns about price discovery. 3. Potential for higher costs due to sole-source nature. 4. Sector: Defense manufacturing, specifically armored vehicle systems.

Value Assessment

Rating: questionable

The award amount of $38.96 million for delivery order components is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar contracts or alternative suppliers.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source or limited competition scenario. This limits price discovery and potentially leads to higher costs for taxpayers as the government may not be receiving the best possible price.

Taxpayer Impact: The lack of competition for this significant award means taxpayers may be overpaying for essential defense components.

Public Impact

Impacts the operational readiness of Abrams tanks. Directly benefits a single large defense contractor. Highlights potential inefficiencies in defense procurement processes.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for cost overruns
Limited transparency in pricing

Positive Signals

Supports critical defense systems
Award to established contractor

Sector Analysis

This contract falls within the Defense sector, specifically related to the manufacturing of components for armored vehicles. Spending benchmarks for such specialized parts are often high, but competition is key to ensuring value.

Small Business Impact

This award went to Raytheon Company, a large prime contractor, and there is no indication of small business participation. The lack of competition further limits opportunities for small businesses to enter the supply chain for these components.

Oversight & Accountability

The non-competed nature of this award warrants scrutiny from oversight bodies to ensure the price paid is justified and that future procurements explore competitive options where feasible.

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

Sole-source award
Lack of price competition
Potential for cost overruns
Limited small business inclusion

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.0 million to RAYTHEON COMPANY. DELIVERY ORDER FOR CITV COMPONENTS FOR PM ABRAMS

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 $39.0 million.

What is the period of performance?

Start: 2020-02-13. End: 2022-04-30.

What is the justification for not competing this delivery order, and how was the price determined to be fair and reasonable?

The justification for not competing this delivery order is not provided in the data. Typically, sole-source awards require specific justifications, such as unique capabilities or urgent needs. The price determination process for non-competed contracts often relies on historical pricing, cost analysis, or certified cost or pricing data from the contractor, but without transparency, verifying fairness is challenging.

What are the risks associated with awarding critical defense components on a sole-source basis?

The primary risks include inflated costs due to the absence of competitive pressure, potential for reduced innovation, and a lack of market validation for pricing. It can also create vendor lock-in and reduce the government's leverage in future negotiations. Furthermore, it limits opportunities for other capable suppliers, potentially hindering the broader defense industrial base.

How does this award impact the overall effectiveness and cost-efficiency of the Abrams tank program?

If the components are essential and the price is fair, the award contributes to program effectiveness by ensuring supply. However, if the non-competed price is higher than a competitive bid would yield, it reduces cost-efficiency, diverting funds that could be used elsewhere within the program or for other defense priorities. The long-term impact depends on ongoing price monitoring and future procurement strategies.

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 COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp (UEI: 001344142)

Address: 2501 W UNIVERSITY DR, MCKINNEY, TX, 75071

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: $38,960,495

Exercised Options: $38,960,495

Current Obligation: $38,960,495

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $809,318

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W909MY19D0015

IDV Type: IDC

Timeline