DoD Awards $127M Abrams Tank Parts Contract to Raytheon Company

Contract Overview

Contract Amount: $127,269,699 ($127.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2022-06-21

End Date: 2026-05-31

Contract Duration: 1,440 days

Daily Burn Rate: $88.4K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER FOR TACOM AND ABRAMS

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75071

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $127.3 million to RAYTHEON COMPANY for work described as: DELIVERY ORDER FOR TACOM AND ABRAMS Key points: 1. Significant award for critical defense components. 2. Sole-source award raises questions about price discovery. 3. Long-term contract (4 years) impacts budget predictability. 4. Focus on specialized manufacturing within the defense sector.

Value Assessment

Rating: questionable

The contract value of $127M for specialized military vehicle parts appears high, especially given the sole-source nature. Without competitive bidding, it's difficult to assess if this price reflects fair market value compared to potential alternatives or previous contracts for similar components.

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 was no market pressure to offer the best price.

Taxpayer Impact: The lack of competition on this large contract may result in taxpayers paying a premium for these essential defense components.

Public Impact

Ensures continued availability of critical parts for Abrams tanks. Supports a major defense contractor and its supply chain. Impacts the operational readiness of armored vehicle fleets.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
High contract value
Long contract duration

Positive Signals

Supports critical defense systems
Ensures part availability

Sector Analysis

This contract falls within the defense manufacturing sector, specifically for military vehicle components. Spending benchmarks for specialized parts like these can vary widely, but the sole-source nature warrants scrutiny against industry averages for similar sole-source awards.

Small Business Impact

The data indicates this contract was not awarded to small businesses, as both 'ss' and 'sb' fields are false. This award does not appear to contribute to small business contracting goals.

Oversight & Accountability

The sole-source nature of this award suggests limited oversight in the procurement process. Further review would be needed to confirm if justifications for sole-sourcing were adequately documented and approved.

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 procurement
High dollar value
Long contract duration
Lack of small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $127.3 million to RAYTHEON COMPANY. DELIVERY ORDER FOR TACOM AND 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 $127.3 million.

What is the period of performance?

Start: 2022-06-21. End: 2026-05-31.

What is the justification for the sole-source award, and how does it ensure value for money?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Without access to the specific justification, it's difficult to assess how it ensures value for money. However, sole-sourcing inherently bypasses competitive pressures that normally drive down prices, making value assessment more challenging and reliant on detailed cost analysis by the agency.

What are the risks associated with a sole-source contract of this magnitude and duration?

The primary risks include inflated pricing due to lack of competition, potential for vendor complacency, and reduced incentive for innovation. A long duration (4 years) exacerbates these risks, potentially locking the government into unfavorable terms or prices for an extended period. There's also a risk of vendor lock-in, making it difficult to switch suppliers even if better options emerge.

How does this contract contribute to the overall effectiveness and readiness of the Abrams fleet?

This contract is crucial for maintaining the operational effectiveness and readiness of the Abrams main battle tank fleet by ensuring a steady supply of necessary parts. Consistent availability of high-quality components directly impacts the ability to repair, maintain, and deploy these vital military assets, thereby supporting national defense objectives.

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: Rockwell Collins Australia PTY Limited

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: $127,269,699

Exercised Options: $127,269,699

Current Obligation: $127,269,699

Subaward Activity

Number of Subawards: 122

Total Subaward Amount: $47,626,824

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