DoD Awards Raytheon $54.7M for Taiwan Delivery Order, Primarily for Navigation Systems

Contract Overview

Contract Amount: $54,669,179 ($54.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2020-06-02

End Date: 2024-12-31

Contract Duration: 1,673 days

Daily Burn Rate: $32.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER FOR TAIWAN

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75071

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $54.7 million to RAYTHEON COMPANY for work described as: DELIVERY ORDER FOR TAIWAN Key points: 1. Significant award to Raytheon Company for critical defense systems. 2. Focus on navigation and guidance systems highlights a key technological area. 3. Sole-source nature raises questions about price discovery and competition. 4. Long performance period suggests a substantial, ongoing requirement.

Value Assessment

Rating: fair

The contract is a firm-fixed-price delivery order. Without comparable contracts or detailed cost breakdowns, assessing the pricing against similar procurements is challenging. The benchmark of $32.7M suggests a substantial value, but its reasonableness is difficult to ascertain.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there is no competitive pressure to drive down prices.

Taxpayer Impact: The lack of competition for this significant award may result in taxpayers paying a premium for the required navigation and guidance systems.

Public Impact

Supports U.S. foreign military sales and security cooperation with Taiwan. Ensures operational readiness of critical defense assets. Impacts the defense industrial base, specifically in navigation and guidance systems manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for overpricing due to sole-source award
Long contract duration

Positive Signals

Supports critical national security objectives
Award to a major defense contractor with established capabilities

Sector Analysis

This award falls within the Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing sector. Spending in this area is crucial for maintaining technological superiority in defense, but often involves high R&D costs and specialized manufacturing.

Small Business Impact

This award went to Raytheon Company, a large prime contractor. There is no indication of small business participation in this specific delivery order, suggesting limited opportunities for small businesses in this particular procurement.

Oversight & Accountability

As a sole-source award, oversight is critical to ensure fair pricing and effective delivery. The Department of the Army's contracting activity should monitor performance and costs closely to mitigate risks associated with non-competitive awards.

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 limits competition and price discovery.
Potential for cost overruns due to lack of competitive pressure.
Long performance period increases exposure to market and technological changes.
Lack of transparency regarding specific system components and their necessity.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $54.7 million to RAYTHEON COMPANY. DELIVERY ORDER FOR TAIWAN

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 $54.7 million.

What is the period of performance?

Start: 2020-06-02. End: 2024-12-31.

What specific factors justified the sole-source award, and were alternatives explored?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of other responsible sources. Without detailed documentation, it's unclear if alternatives were thoroughly explored or if specific technological requirements necessitated this approach. Further investigation into the justification is warranted to ensure taxpayer funds are used efficiently.

How does the $54.7M award compare to historical spending on similar navigation and guidance systems for foreign military sales?

Benchmarking this $54.7M award against historical spending requires access to detailed contract data for similar systems and sales. Given the sole-source nature, direct comparison is difficult. A thorough analysis would involve examining pricing trends for comparable systems procured competitively or through other sole-source justifications to assess potential cost deviations.

What is the projected impact on Taiwan's operational readiness and U.S. strategic interests?

This delivery order is expected to enhance Taiwan's operational readiness by providing essential navigation and guidance systems for its military assets. This directly supports U.S. strategic interests in maintaining regional stability and security in the Indo-Pacific. The timely delivery of these systems is crucial for ensuring interoperability and effectiveness.

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

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: $54,669,179

Exercised Options: $54,669,179

Current Obligation: $54,669,179

Subaward Activity

Number of Subawards: 92

Total Subaward Amount: $24,521,715

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W909MY19D0015

IDV Type: IDC

Timeline