Raytheon Company awarded $22.8M for R&D in physical sciences, a sole-source contract

Contract Overview

Contract Amount: $22,799,801 ($22.8M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2009-11-16

End Date: 2017-03-31

Contract Duration: 2,692 days

Daily Burn Rate: $8.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: SPRING FLOWER

Place of Performance

Location: ALBUQUERQUE, BERNALILLO County, NEW MEXICO, 87123

State: New Mexico Government Spending

Plain-Language Summary

Department of Defense obligated $22.8 million to RAYTHEON COMPANY for work described as: SPRING FLOWER Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Research and Development focus in physical sciences suggests specialized technical requirements. 3. Long contract duration of over 2600 days indicates a sustained effort. 4. Cost Plus Fixed Fee pricing structure may incentivize cost increases. 5. Contract awarded to a single, large defense contractor. 6. Performance occurred primarily in New Mexico.

Value Assessment

Rating: questionable

The contract's value of $22.8 million over approximately 7.5 years averages to about $3 million annually. Without specific deliverables or benchmarks, it's difficult to assess value for money. The Cost Plus Fixed Fee (CPFF) structure, while common for R&D, can lead to higher costs compared to fixed-price contracts if not carefully managed. Benchmarking against similar R&D contracts in physical sciences is challenging due to the specialized nature and sole-source award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This typically occurs when a specific contractor possesses unique capabilities or proprietary technology essential for the requirement. The lack of competition means that taxpayers did not benefit from potential cost savings that could arise from a competitive bidding process.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage market competition to secure the best possible price, potentially leading to higher costs for taxpayers.

Public Impact

The primary beneficiary is Raytheon Company, receiving significant funding for research and development. The contract supports advancements in physical sciences, potentially leading to new technologies or improved existing ones. Geographic impact is concentrated in New Mexico, where the research and development activities likely took place. The contract likely supported a workforce of scientists, engineers, and technicians within Raytheon.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost Plus Fixed Fee contract type can incentivize cost overruns.
Lack of detailed performance metrics makes value assessment difficult.
Long contract duration without clear milestones could indicate scope creep or slow progress.

Positive Signals

Contract supports critical R&D in specialized scientific fields.
Award to a major defense contractor suggests alignment with national security objectives.
Long-term funding provides stability for research efforts.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on physical sciences. The R&D market is characterized by innovation and specialized expertise. Contracts in this area often involve significant investment and can lead to breakthroughs in technology. Comparable spending benchmarks are difficult to establish without knowing the specific R&D area, but R&D spending by the Department of Defense is substantial, often awarded to large prime contractors.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the contractor is Raytheon Company, a large prime contractor. There is no information provided on subcontracting plans or their impact on small businesses. Given the sole-source nature and the prime contractor's size, it is unlikely that small businesses were directly involved as primary awardees.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is listed as the 'sa'. Oversight would focus on ensuring that the contractor meets the terms of the Cost Plus Fixed Fee contract, manages costs appropriately, and makes progress on the R&D objectives. Transparency is limited due to the sole-source nature and the R&D focus, which often involves proprietary information. Inspector General jurisdiction would apply if fraud or waste were suspected.

Related Government Programs

Department of Defense Research and Development Programs
Advanced Technology Development Contracts
Physical Sciences Research Initiatives

Risk Flags

Sole-source award limits competition.
Cost-plus contract type can lead to cost overruns.
Lack of detailed performance metrics hinders value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.8 million to RAYTHEON COMPANY. SPRING FLOWER

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 $22.8 million.

What is the period of performance?

Start: 2009-11-16. End: 2017-03-31.

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

The contract data indicates 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)' with the North American Industry Classification System (NAICS) code 541712. However, the specific nature of the R&D activities is not detailed in the provided data. Such contracts typically involve theoretical analysis, experimentation, and prototyping to advance scientific knowledge or develop new technologies. Given the contractor (Raytheon) and the awarding agency (Department of Defense), the R&D likely pertained to defense-related applications, potentially in areas like materials science, advanced physics, or engineering principles relevant to military systems. Further investigation into contract line item numbers (CLINs) or associated documentation would be required for precise details.

How does the $22.8 million award compare to typical R&D spending in physical sciences by the DoD?

The $22.8 million awarded to Raytheon Company over approximately 7.5 years (from 2009 to 2017) represents an average annual expenditure of roughly $3 million. This figure, while substantial for a single project, needs to be contextualized within the broader DoD R&D budget. The DoD's total R&D spending often runs into the tens of billions of dollars annually, covering a vast array of scientific and technological domains. Therefore, $3 million per year for a specific R&D effort in physical sciences, especially if it involves highly specialized or cutting-edge research, might be considered moderate rather than exceptionally large. Benchmarking requires comparing it to similar sole-source R&D contracts for comparable technological areas and contractor capabilities.

What are the risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D?

Cost Plus Fixed Fee (CPFF) contracts, while suitable for R&D where the scope and costs are uncertain, carry inherent risks. The primary risk for the government is that the contractor is reimbursed for all allowable costs plus a fixed fee, which can incentivize cost overruns. If the contractor's costs increase, their total profit (the fixed fee plus any efficiencies gained) can also increase, albeit the fee itself is fixed. This can lead to the government paying more than initially anticipated. Effective oversight, detailed cost tracking, and clear performance metrics are crucial to mitigate these risks and ensure the government receives good value. For taxpayers, this means a potential for higher overall expenditure compared to fixed-price contracts.

What does the sole-source award imply about the criticality or uniqueness of Raytheon's capabilities?

A sole-source award, as in this case, strongly implies that the government determined Raytheon Company possessed unique capabilities, proprietary technology, or essential expertise that could not be readily replicated by other potential contractors. This could stem from prior research investments, patented technologies, specialized facilities, or deep institutional knowledge critical to the specific R&D objectives. For taxpayers, this means that the government may have had limited options to pursue competitive pricing, potentially leading to a higher cost than if multiple bidders had vied for the contract. However, it also suggests that the government prioritized acquiring these specific, potentially critical, capabilities to meet its R&D goals.

How has spending on R&D in physical sciences by the Department of Defense evolved since this contract period (2009-2017)?

The Department of Defense's spending on Research and Development (R&D) in physical sciences has generally seen fluctuations but has remained a significant portion of its overall R&D budget. Post-2017, there has been an increasing emphasis on rapid prototyping, artificial intelligence, cyber capabilities, and advanced manufacturing, which often intersect with physical sciences. While specific figures for 'physical sciences' R&D are aggregated within broader categories, overall DoD R&D budgets have continued to be substantial, reflecting a commitment to maintaining technological superiority. Trends indicate a move towards more agile acquisition processes and a focus on dual-use technologies with both military and commercial applications, though the fundamental need for foundational research in physical sciences persists.

Industry Classification

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

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: RTX Corp

Address: 1300 EUBANK BLVD SE, ALBUQUERQUE, NM, 87123

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: $22,969,097

Exercised Options: $22,969,097

Current Obligation: $22,799,801

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline