Raytheon Company awarded $39M for CITV components, a sole-source delivery order for navigation systems

Contract Overview

Contract Amount: $39,091,659 ($39.1M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2022-01-26

End Date: 2024-04-30

Contract Duration: 825 days

Daily Burn Rate: $47.4K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER FOR CITV COMPONENTS TO AUSTRALIA

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75071

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $39.1 million to RAYTHEON COMPANY for work described as: DELIVERY ORDER FOR CITV COMPONENTS TO AUSTRALIA Key points: 1. This contract represents a significant investment in specialized navigation and guidance systems. 2. The sole-source nature of this award warrants scrutiny regarding potential price inflation. 3. Delivery orders can sometimes indicate urgent needs or a lack of pre-existing contract vehicles. 4. The duration of the contract suggests a sustained requirement for these components. 5. Performance context is limited without details on specific CITV components and their criticality. 6. The award falls within the broader sector of defense systems manufacturing.

Value Assessment

Rating: fair

Benchmarking the value of this $39 million delivery order is challenging without specific component details and comparison to similar sole-source awards. The contract's fixed-price nature provides some cost certainty, but the absence of competition limits the ability to assess if the pricing reflects market value. Further analysis would require understanding the criticality of the CITV components and whether alternative solutions were considered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities or when there is an urgent need that cannot be met through a competitive process. The lack of competition means that price discovery through market forces was not utilized, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. Without a competitive process, there is less pressure on the contractor to offer the lowest possible price.

Public Impact

The U.S. Department of the Army is the primary beneficiary, receiving critical components for its CITV systems. This contract supports the sustainment and operational readiness of defense platforms. The geographic impact is primarily within Texas, where Raytheon Company's facility is located. Workforce implications include continued employment for skilled labor involved in the manufacturing of these specialized components.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency in the justification for sole-source procurement.
Potential for vendor lock-in if these components are highly specialized and difficult to source elsewhere.

Positive Signals

Fixed-price contract provides cost certainty for the government.
Award supports critical defense capabilities and national security.
Contract duration suggests a stable, long-term requirement.

Sector Analysis

This contract falls within the "Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing" sector, a critical segment of the defense industrial base. The market for such specialized components is often characterized by high barriers to entry due to technological complexity and stringent quality requirements. Comparable spending in this sector is substantial, driven by ongoing modernization and sustainment efforts across various military branches.

Small Business Impact

There is no indication that this contract included a small business set-aside. As a sole-source award to a large prime contractor, the opportunities for small businesses would likely be limited to subcontracting roles, if any. The impact on the small business ecosystem is minimal unless Raytheon Company actively engages small businesses as subcontractors for this specific award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the fixed-price contract type, requiring delivery of specified components. Transparency is limited due to the sole-source nature, but contract award data is publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Procurement
Army Aviation Systems
Navigation and Guidance Systems
Defense Component Manufacturing

Risk Flags

Sole-source award may indicate limited competition, potentially leading to higher costs.
Lack of detailed component information hinders comprehensive value assessment.
Contract duration suggests a long-term dependency on this specific supplier.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.1 million to RAYTHEON COMPANY. DELIVERY ORDER FOR CITV COMPONENTS TO AUSTRALIA

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 $39.1 million.

What is the period of performance?

Start: 2022-01-26. End: 2024-04-30.

What specific CITV components are being procured under this delivery order, and what is their criticality to the platform's operation?

The provided data does not specify the exact CITV components being procured. CITV (Combat Identification Technology) systems are crucial for distinguishing friendly forces from enemy combatants on the battlefield, thereby reducing fratricide and enhancing situational awareness. Components could range from sensors and transponders to processing units and display interfaces. The criticality of these components is likely high, as failure or malfunction could significantly impair the platform's ability to operate effectively and safely in a combat environment. Further details would be required from the contracting agency to ascertain the precise nature and criticality of the components.

What was the justification for awarding this contract on a sole-source basis instead of through full and open competition?

The justification for a sole-source award typically falls under specific exceptions to the Competition in Contracting Act (CCA). Common reasons include: (1) the agency having only one responsible source and no other supplies or services will satisfy agency requirements (e.g., unique technical capabilities, proprietary technology); (2) a national emergency; or (3) it is impracticable to obtain competition. For this specific contract, the 'unique capabilities' or 'proprietary technology' argument is most probable, suggesting that Raytheon Company is the only entity capable of producing these specific CITV components. A formal Justification for Other Than Full and Open Competition (JOFOC) document would detail the precise rationale.

How does the awarded price of $39 million compare to historical spending on similar CITV components or systems?

Direct comparison of the $39 million award to historical spending on similar CITV components is difficult without more granular data on the specific items procured. However, the contract's duration (825 days) and fixed-price nature suggest a substantial, ongoing requirement. If this represents a significant portion of the total CITV system cost or a large quantity of components, it could indicate substantial historical spending. Analyzing past sole-source awards for similar defense electronics or navigation systems from Raytheon or other prime contractors could provide a benchmark, but the unique nature of sole-source procurements often makes direct price-to-price comparisons challenging.

What are the potential risks associated with a sole-source award for critical defense components like these?

The primary risk of a sole-source award is the lack of price competition, which can lead to inflated costs for the government and, consequently, taxpayers. There's also a risk of reduced innovation and responsiveness from the sole provider, as they face less pressure to improve products or services. Furthermore, sole-source contracts can create vendor lock-in, making it difficult and costly to switch providers in the future. For critical defense components, supply chain disruptions or the sole provider's financial instability could pose significant national security risks if not adequately managed through robust contract oversight and contingency planning.

What is Raytheon Company's track record in delivering navigation and guidance systems to the Department of Defense?

Raytheon Company, now part of RTX, has a long and extensive track record of delivering a wide array of defense systems, including sophisticated navigation, guidance, and targeting technologies, to the Department of Defense and allied nations. They are a major prime contractor involved in numerous large-scale defense programs across air, land, and sea domains. Their history includes the development and production of complex electronic warfare systems, radar, missiles, and integrated defense solutions. While specific performance metrics for every contract are not always public, Raytheon is generally considered a capable and experienced provider of advanced defense technologies, though like any large contractor, they have faced scrutiny on specific programs regarding cost and performance.

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: $39,091,659

Exercised Options: $39,091,659

Current Obligation: $39,091,659

Subaward Activity

Number of Subawards: 33

Total Subaward Amount: $5,716,549

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