DoD awards $38.3M for Abrams tank hardware, with Raytheon Company as sole provider

Contract Overview

Contract Amount: $38,342,161 ($38.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2020-12-21

End Date: 2023-03-31

Contract Duration: 830 days

Daily Burn Rate: $46.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER W909MY-21-F-0009 UNDER IDIW W909MY-19-D-0015 FOR 2GF BKIT TO PROCURE CITV HARDWARE COMPONENTS FOR PM ABRAMS.

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75071

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $38.3 million to RAYTHEON COMPANY for work described as: DELIVERY ORDER W909MY-21-F-0009 UNDER IDIW W909MY-19-D-0015 FOR 2GF BKIT TO PROCURE CITV HARDWARE COMPONENTS FOR PM ABRAMS. Key points: 1. Spending is concentrated with a single vendor, Raytheon Company. 2. The contract is for critical hardware components for the PM Abrams program. 3. The award was not competed, raising potential concerns about price discovery. 4. The sector is dominated by large defense contractors, limiting small business opportunities.

Value Assessment

Rating: questionable

The contract's value of $38.3 million is significant. Without competitive bidding, it's difficult to assess if this price is optimal compared to similar hardware procurements.

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 may lead to higher costs for taxpayers as there was no market pressure to offer the best price.

Taxpayer Impact: The lack of competition likely resulted in a higher cost to taxpayers than a competed procurement.

Public Impact

Ensures continued modernization and operational readiness of the Abrams tank fleet. Supports a critical defense program managed by the Department of the Army. Funds advanced hardware components, potentially including specialized sensors or systems. The sole-source nature may limit broader technological innovation from other firms.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
High contract value

Positive Signals

Supports critical defense equipment
Long-term contract duration

Sector Analysis

This procurement falls within the Defense sector, specifically focusing on military vehicle components. Spending in this area is often characterized by high-value, specialized contracts with limited competition due to national security requirements.

Small Business Impact

The contract was awarded to Raytheon Company, a large defense contractor. There is no indication that small businesses were involved in this specific delivery order, suggesting limited opportunities for SMBs in this particular procurement.

Oversight & Accountability

The Department of the Army awarded this delivery order under an existing IDIQ. Oversight would focus on contract performance, adherence to specifications, and justification for the sole-source award.

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 lacks competitive pricing.
Potential for overpayment without market comparison.
Limited opportunity for small business participation.
Dependency on a single supplier for critical components.
Lack of transparency in price justification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.3 million to RAYTHEON COMPANY. DELIVERY ORDER W909MY-21-F-0009 UNDER IDIW W909MY-19-D-0015 FOR 2GF BKIT TO PROCURE CITV HARDWARE 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 $38.3 million.

What is the period of performance?

Start: 2020-12-21. End: 2023-03-31.

What is the justification for the sole-source award of this contract?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one vendor can fulfill the requirement. For PM Abrams hardware, it could relate to specific integration needs or existing system compatibility that only Raytheon can provide, though this requires thorough documentation and approval.

What are the potential risks associated with a sole-source procurement of this magnitude?

The primary risks include inflated pricing due to lack of competition, potential for vendor lock-in, and reduced incentive for innovation. Taxpayers may overpay, and the government might miss out on potentially better or more cost-effective solutions from other suppliers. There's also a risk if the sole-source vendor faces production issues or financial instability.

How does this spending contribute to the overall effectiveness of the Abrams tank program?

This spending is crucial for maintaining and upgrading the Abrams tank fleet's operational effectiveness. Procuring essential hardware components ensures the tanks remain combat-ready and can incorporate necessary technological advancements. The timely delivery of these components directly impacts the Army's ability to deploy and sustain its armored forces.

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: $38,342,161

Exercised Options: $38,342,161

Current Obligation: $38,342,161

Subaward Activity

Number of Subawards: 45

Total Subaward Amount: $9,268,390

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W909MY19D0015

IDV Type: IDC

Timeline