Raytheon Awarded $19.7M for Missile and Space Systems R&D, Lacking Competition

Contract Overview

Contract Amount: $89,737,484 ($89.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2006-05-25

End Date: 2008-06-30

Contract Duration: 767 days

Daily Burn Rate: $117.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: 200608!601741!2100!W9113M!USA SPACE AND STRATEGIC DEF CDR !W9113M06C0128 !A!N! !N! ! !20060525!20061031!196882310!001055235!001339159!N!RAYTHEON COMPANY !350 LOWELL ST !ANDOVER !MA!01810!04650!017!25!BEDFORD !MIDDLESEX !MASS !+000005000000!N!N!000000000000!AC23!RDTE/MISSILE AND SPACE SYSTEMS-ADV TECH DEV !A7 !ELECTRONICS AND COMMUNICATION EQUIP !372 !JLENS !541710!E! !1! ! ! ! ! !99990909!B! ! !N!A!D!N!U!1!001!N!2A!Z!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $89.7 million to RAYTHEON COMPANY for work described as: 200608!601741!2100!W9113M!USA SPACE AND STRATEGIC DEF CDR !W9113M06C0128 !A!N! !N! ! !20060525!20061031!196882310!001055235!001339159!N!RAYTHEON COMPANY !350 LOWELL ST !ANDOVER !MA!01810!04650!017!25!BEDFORD !MIDD… Key points: 1. Significant R&D investment in advanced missile and space systems. 2. Sole-source award raises concerns about price discovery and competition. 3. Contract duration of over two years suggests substantial project scope. 4. Potential for innovation in defense technology, but at a premium price.

Value Assessment

Rating: questionable

The contract's total value is $19.7 million. Without competitive bids, it's difficult to assess if this price is optimal compared to similar R&D contracts for advanced defense systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was considered. This significantly limits price discovery and may lead to higher costs for taxpayers.

Taxpayer Impact: The lack of competition could result in taxpayers paying more than necessary for the research and development services.

Public Impact

Taxpayers may be overpaying for advanced defense technology due to the absence of competitive bidding. The focus on R&D could lead to breakthroughs in space and strategic defense capabilities. Lack of transparency in the sole-source award process can erode public trust. The long contract duration indicates a significant commitment of public funds.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Potential for overpayment
Lack of transparency

Positive Signals

Investment in critical defense R&D
Potential for technological advancement

Sector Analysis

This contract falls under Research and Development in Physical, Engineering, and Life Sciences, specifically focusing on missile and space systems. Spending in this sector is often high due to the complexity and specialized nature of the work.

Small Business Impact

There is no indication that small businesses were involved in this sole-source contract, suggesting a missed opportunity for their participation and contribution.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny to ensure the Department of Defense adequately justified the lack of competition and negotiated the best possible price.

Related Government Programs

Research and Development in the Physical, Engineering, and Life Sciences
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Sole-source award limits competition.
Potential for higher costs due to lack of competitive bidding.
Limited transparency in the procurement process.
No apparent small business participation.
Contract duration of over two years.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $89.7 million to RAYTHEON COMPANY. 200608!601741!2100!W9113M!USA SPACE AND STRATEGIC DEF CDR !W9113M06C0128 !A!N! !N! ! !20060525!20061031!196882310!001055235!001339159!N!RAYTHEON COMPANY !350 LOWELL ST !ANDOVER !MA!01810!04650!017!25!BEDFORD !MIDDLESEX !MASS !+000005000000!N!N!000000000000!AC23!RDTE/MISSILE AND SPACE SYSTEMS-ADV TECH DEV !A7 !ELECTRONICS AND COMMUNICATION EQUIP !372 !JLENS !541710!E! !1! ! ! ! ! !999

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 $89.7 million.

What is the period of performance?

Start: 2006-05-25. End: 2008-06-30.

What specific technological advancements are expected from this R&D contract, and how will they benefit national security?

The contract is for "Research and Development in Physical, Engineering, and Life Sciences" with a focus on "Missile and Space Systems - Advanced Tech Development." While specific advancements are not detailed, the objective is likely to enhance U.S. space and strategic defense capabilities, potentially leading to improved surveillance, communication, or offensive/defensive missile technologies crucial for national security.

What is the justification for awarding this contract on a sole-source basis, and what steps were taken to mitigate potential cost overruns?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Without further documentation, it's assumed the Department of Defense deemed Raytheon as the sole capable provider. Mitigation of cost overruns in Cost Plus Fixed Fee contracts relies heavily on robust oversight and negotiation during the contract's lifecycle.

How does the $19.7 million investment compare to similar R&D contracts in the missile and space sector, and what is the expected return on investment?

Benchmarking this $19.7 million investment is challenging without access to comparable sole-source R&D contracts for advanced missile and space systems. The return on investment is primarily measured in terms of enhanced national security capabilities and technological superiority, which are difficult to quantify financially but are critical for defense.

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: 350 LOWELL ST, ANDOVER, MA, 01810

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