Raytheon Company awarded $216.6M for IGF Surveillance System Supply and Support by the Department of Defense

Contract Overview

Contract Amount: $216,594,906 ($216.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2012-12-31

End Date: 2019-09-30

Contract Duration: 2,464 days

Daily Burn Rate: $87.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF SURVEILLANCE SYSTEM SUPPLY AND SUPPORT

Place of Performance

Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $216.6 million to RAYTHEON COMPANY for work described as: IGF::OT::IGF SURVEILLANCE SYSTEM SUPPLY AND SUPPORT Key points: 1. Contract awarded through full and open competition after exclusion of sources, indicating a potentially competitive process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. The duration of the contract is substantial at 2464 days, suggesting a long-term need for these services. 4. The North American Industry Classification System (NAICS) code 541614 points to logistics consulting services. 5. The contract was awarded by the Defense Contract Management Agency, a key oversight body within the DoD. 6. The contract has been active for a significant period, with an end date in late 2019.

Value Assessment

Rating: fair

Benchmarking the value for this specific 'IGF Surveillance System Supply and Support' contract is challenging without more detailed service breakdowns and comparable market data. The Cost Plus Fixed Fee (CPFF) structure, while common for complex or evolving requirements, carries inherent risks of cost escalation. The total award amount of $216.6 million over its duration suggests a significant investment, but its value-for-money assessment hinges on the effectiveness and efficiency of the delivered surveillance system and support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES'. This designation implies that while the competition was intended to be open, specific sources were excluded, potentially limiting the breadth of competition. The number of bidders is not explicitly stated, but the 'exclusion of sources' suggests a more controlled procurement environment than a truly unrestricted full and open competition.

Taxpayer Impact: The limited competition may have resulted in less aggressive pricing than a broader, unrestricted competition could have achieved, potentially impacting taxpayer value.

Public Impact

The primary beneficiaries are likely components of the Department of Defense requiring surveillance system support. The services delivered include supply and support for the IGF Surveillance System, crucial for defense operations. The geographic impact is likely focused on areas where the DoD operates and requires such surveillance capabilities. Workforce implications could include specialized technical and logistical support personnel required for the system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can incentivize contractor to increase costs to maximize profit.
Limited competition due to 'exclusion of sources' may reduce price discovery and potentially increase costs.
Long contract duration (2464 days) increases the risk of scope creep and cost overruns over time.
Lack of specific performance metrics makes it difficult to assess the true value and effectiveness of the support provided.

Positive Signals

Awarded by the Defense Contract Management Agency, suggesting a level of oversight.
The contract was competed, even if with exclusions, indicating an attempt at market engagement.
The system is likely critical to DoD operations, implying a focus on reliable support.

Sector Analysis

This contract falls within the broader defense sector, specifically related to intelligence, surveillance, and reconnaissance (ISR) systems. The market for such specialized systems and their ongoing support is typically dominated by large defense contractors. Spending in this area is driven by national security requirements and technological advancements in surveillance capabilities. Comparable spending benchmarks would involve other large-scale ISR system procurements and support contracts within the DoD and allied nations.

Small Business Impact

There is no indication that this contract involved small business set-asides. The nature of advanced surveillance systems and their support typically requires specialized capabilities often held by larger prime contractors. Subcontracting opportunities for small businesses may exist, but are not explicitly detailed in the provided data. The overall impact on the small business ecosystem for this specific contract appears minimal based on the available information.

Oversight & Accountability

Oversight for this contract would primarily fall under the purview of the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. The Cost Plus Fixed Fee structure necessitates robust financial oversight to monitor expenditures and prevent cost overruns. Transparency regarding specific performance metrics and detailed spending breakdowns would enhance accountability, but such information is not readily available in the summary data. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Intelligence, Surveillance, and Reconnaissance (ISR) Systems
Defense Logistics Support Services
Department of Defense IT and Systems Procurement
Advanced Technology Systems Contracts

Risk Flags

Potential for cost overruns due to CPFF structure
Limited competition may impact price discovery
Long contract duration increases management complexity
Lack of detailed performance metrics hinders value assessment

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $216.6 million to RAYTHEON COMPANY. IGF::OT::IGF SURVEILLANCE SYSTEM SUPPLY AND SUPPORT

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 $216.6 million.

What is the period of performance?

Start: 2012-12-31. End: 2019-09-30.

What specific surveillance system does 'IGF' refer to, and what are its primary functions?

The acronym 'IGF' in the context of this contract likely refers to a specific intelligence, surveillance, or reconnaissance (ISR) platform or system utilized by the Department of Defense. Without further declassification or specific program details, the exact nature of 'IGF' remains proprietary. However, based on the contract's description as 'Supply and Support,' it implies the provision of hardware, software, maintenance, upgrades, and potentially operational support for this system. These systems are generally designed to gather critical intelligence data through various means, such as imagery, signals intelligence, or other sensor technologies, to support military operations, threat assessment, and situational awareness.

How does the 'Cost Plus Fixed Fee' (CPFF) contract type compare to other DoD contract types in terms of risk and potential value?

The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is not precisely defined or is expected to evolve, such as in research and development or complex system integration projects. It reimburses the contractor for all allowable costs incurred, plus a predetermined fixed fee representing profit. Compared to fixed-price contracts, CPFF shifts more cost risk to the government, as the final price is not capped. However, it can incentivize contractors to perform work that might be too risky or undefined for a fixed-price bid. For the government, effective oversight and cost controls are crucial to manage potential cost overruns and ensure value. Other contract types like Firm-Fixed-Price (FFP) offer greater cost certainty but may deter contractors from bidding on high-risk efforts or lead to less scope flexibility.

What are the implications of 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' for pricing and innovation?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' designation suggests a procurement process that aimed for broad participation but ultimately narrowed the field based on specific criteria or pre-qualification. While it's more competitive than a sole-source award, excluding certain potential bidders could limit the range of innovative solutions and competitive pricing. If the exclusions were based on stringent, potentially unnecessary requirements, it might inadvertently favor incumbent or larger contractors, potentially stifling innovation from smaller or newer entrants. For taxpayers, this could mean missing out on potentially more cost-effective or technologically advanced solutions that might have emerged from a truly unrestricted competition.

Given the contract's end date in September 2019, what is the likely current status of the IGF Surveillance System and its support?

With the contract's end date in September 2019, it is highly probable that the specific support and supply arrangement under this award has concluded. The Department of Defense would have either transitioned to a new contract vehicle for continued support, brought the function in-house, or potentially retired the system if it was superseded by newer technology. It's common for such long-term contracts to be followed by recompetes or follow-on contracts to ensure continuity of essential services. Without information on subsequent awards, it's impossible to definitively state the current operational status of the IGF Surveillance System, but the need for its functions likely persists, necessitating ongoing procurement actions.

How does the duration of 2464 days (approximately 6.7 years) impact the management and oversight of this contract?

A contract duration of 2464 days, or roughly 6.7 years, presents significant management and oversight challenges for the government. Over such an extended period, requirements can change, technology can become obsolete, and personnel involved on both the government and contractor sides will likely turn over. This necessitates robust contract management practices, including regular performance reviews, continuous monitoring of costs (especially under CPFF), and proactive change management. The government must remain vigilant to ensure the contractor continues to meet evolving needs and deliver value, preventing scope creep and ensuring the fixed fee remains appropriate relative to the work performed throughout the contract's lifecycle.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Process, Physical Distribution, and Logistics Consulting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W9113M12R0001

Offers Received: 2

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

Financial Breakdown

Contract Ceiling: $228,206,675

Exercised Options: $228,206,675

Current Obligation: $216,594,906

Actual Outlays: $168,868

Subaward Activity

Number of Subawards: 26

Total Subaward Amount: $21,358,489

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline