DoD awards Raytheon Company $16.26M for R&D services, with contract duration exceeding 2 years

Contract Overview

Contract Amount: $16,259,073 ($16.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2005-08-26

End Date: 2007-06-30

Contract Duration: 673 days

Daily Burn Rate: $24.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Place of Performance

Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $16.3 million to RAYTHEON COMPANY for work described as: Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can incentivize cost overruns. 2. The contract was not competed, raising questions about potential price efficiencies. 3. Performance period spans over 2 years, indicating a significant R&D effort. 4. The contract falls under Research and Development in Physical, Engineering, and Life Sciences. 5. Awarded by the Department of Defense, a major federal R&D investor. 6. The contract type suggests a focus on innovation rather than a fixed deliverable.

Value Assessment

Rating: questionable

Benchmarking the value of this R&D contract is challenging due to its specific technical nature and the absence of competitive pricing. Cost-plus-fixed-fee contracts, while common for R&D, carry inherent risks of cost escalation if not closely managed. Without comparable awarded contracts for similar R&D efforts, it's difficult to definitively assess if the $16.26 million represents excellent value for money. The lack of competition further complicates a direct value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This approach is typically used when only one source is capable of meeting the requirement, or in cases of urgent need. The lack of competition means that taxpayers did not benefit from the price discovery that typically occurs in a competitive bidding process, potentially leading to higher costs.

Taxpayer Impact: Sole-source awards limit opportunities for other businesses to compete for federal dollars and can result in higher prices for taxpayers compared to competitively awarded contracts.

Public Impact

The primary beneficiaries are likely the research and development teams at Raytheon Company and potentially the Department of Defense's technological advancement. Services delivered include research and development in physical, engineering, and life sciences, contributing to national security or technological innovation. The geographic impact is primarily centered around Raytheon's facilities in Massachusetts, where the contract is managed. Workforce implications include employment for scientists, engineers, and support staff involved in the R&D activities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contract type can lead to cost overruns if not managed effectively.
Sole-source award limits price competition and potential savings for taxpayers.
Long performance period increases the risk of scope creep or changing requirements.
Lack of detailed public information on specific R&D objectives makes performance assessment difficult.

Positive Signals

Award to a large, established defense contractor like Raytheon suggests access to significant expertise.
Focus on R&D indicates investment in future technological capabilities.
Contract managed by Defense Contract Management Agency, suggesting established oversight processes.
Contract awarded in 2005, indicating a long-term relationship and potential for successful past performance.

Sector Analysis

The contract falls within the Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences. This sector is crucial for technological advancement and national security, with significant federal investment. The Department of Defense is a primary driver of R&D spending, often contracting with large aerospace and defense firms like Raytheon for specialized research. Comparable spending benchmarks are difficult to establish without knowing the specific R&D focus, but federal R&D obligations are in the hundreds of billions annually.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the contractor, Raytheon Company, is a large business. There is no explicit information regarding subcontracting plans for small businesses within this award. Therefore, the direct impact on the small business ecosystem from this specific contract is likely minimal, though Raytheon may engage small businesses in its broader supply chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance and performance. Accountability measures are inherent in the cost-plus-fixed-fee structure, requiring detailed reporting and justification of costs. Transparency is limited due to the sole-source nature and the proprietary R&D focus, 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 Research and Development Programs
Aerospace and Defense Contractor Services
Advanced Technology Development Contracts
Engineering and Scientific Services

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Lack of detailed performance metrics in public data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.3 million to RAYTHEON COMPANY. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $16.3 million.

What is the period of performance?

Start: 2005-08-26. End: 2007-06-30.

What specific research and development activities were undertaken under this contract?

The provided data indicates the contract was for 'Research and Development in the Physical, Engineering, and Life Sciences' (NAICS 541710) awarded to Raytheon Company by the Department of Defense. However, the specific nature of the R&D activities, such as the scientific disciplines, technological goals, or project objectives, is not detailed in the available information. Such specifics are typically found in the contract's statement of work, which is not publicly accessible in this dataset. Understanding these details would be crucial for assessing the contract's technical merit and alignment with DoD's strategic priorities.

How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for similar R&D efforts?

The Cost-Plus-Fixed-Fee (CPFF) contract type is common for research and development where the scope of work is not precisely defined at the outset, making it difficult to establish a firm fixed price. In a CPFF contract, the contractor is reimbursed for all allowable costs plus a predetermined fixed fee representing profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility for evolving R&D but carries a higher risk of cost overruns for the government if cost controls are not stringent. Other R&D contract types include Cost-Plus-Incentive-Fee (CPIF), which incentivizes performance, and Cost-No-Fee (CNF) for basic research. The choice of CPFF suggests a need for flexibility but requires robust government oversight to manage costs effectively.

What are the potential risks associated with a sole-source award for R&D services?

Sole-source awards for R&D services, like the one to Raytheon Company, carry several potential risks. Primarily, the absence of competition can lead to higher prices than might be achieved in a competitive bidding process, as the government lacks the leverage of multiple offers. This can result in a less efficient use of taxpayer funds. Additionally, without competitive pressure, there may be less incentive for the contractor to innovate aggressively or to control costs diligently. The government also misses out on the potential discovery of alternative solutions or superior technologies that other firms might offer. While sole-source awards are sometimes justified by unique capabilities or urgent needs, they necessitate rigorous justification and oversight to mitigate these risks.

What is Raytheon Company's track record with similar R&D contracts from the Department of Defense?

Raytheon Company, now part of RTX, has a long and extensive history of performing research and development contracts for the Department of Defense across various scientific and engineering domains. While specific details on past performance for this particular $16.26 million contract (2005-2007) are not provided, Raytheon is a major defense contractor known for its work in areas such as radar systems, missiles, and aerospace technology. Their track record generally involves complex, high-value R&D projects. Performance outcomes can vary, but their sustained position as a prime contractor suggests a generally satisfactory history of delivering on DoD requirements, though specific contract performance reviews would be needed for a definitive assessment.

How does the $16.26 million award compare to overall federal R&D spending in the mid-2000s?

The $16.26 million awarded to Raytheon Company in 2005 falls within the broader context of substantial federal R&D spending during the mid-2000s. In fiscal year 2005, total federal R&D obligations were approximately $116 billion, with the Department of Defense being the largest funder, accounting for roughly half of that amount. Therefore, this specific contract represented a very small fraction of the overall federal R&D investment. While significant for the specific project, it was a modest allocation within the vast landscape of defense-related research and development initiatives undertaken by the government during that period.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 1001 BOSTON POST RD E, MARLBOROUGH, MA, 01752

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline