Raytheon Company awarded $37.6M for JLENS Engineering & Logistics Support by the Department of Defense

Contract Overview

Contract Amount: $37,637,170 ($37.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2014-12-05

End Date: 2016-09-30

Contract Duration: 665 days

Daily Burn Rate: $56.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::OT::IGF JLENS ENGINEERING&LOGISTICS SUPPORT

Place of Performance

Location: WOBURN, MIDDLESEX County, MASSACHUSETTS, 01801

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $37.6 million to RAYTHEON COMPANY for work described as: IGF::OT::IGF JLENS ENGINEERING&LOGISTICS SUPPORT Key points: 1. Contract awarded as a sole-source, indicating limited competition. 2. Firm Fixed Price contract type suggests predictable costs for the government. 3. Contract duration of 665 days implies a medium-term support requirement. 4. The contract falls under 'Other Electronic and Precision Equipment Repair and Maintenance' NAICS code. 5. Awarded by the Defense Contract Management Agency, suggesting a focus on oversight. 6. No small business set-aside was applied to this contract.

Value Assessment

Rating: fair

The total contract value is $37.6 million. Without specific performance metrics or comparable contract data, a precise value-for-money assessment is challenging. The firm fixed-price structure provides cost certainty, but the lack of competition raises concerns about whether the government secured the most competitive pricing. Benchmarking against similar engineering and logistics support contracts for complex defense systems would be necessary for a more robust evaluation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Raytheon Company, was solicited. This typically occurs when a specific capability is unique to a single provider or in situations where only one source can meet the urgent requirements. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices or spurred innovation from multiple offerors.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage market competition to achieve the best possible prices for taxpayers. This can potentially lead to higher costs compared to a competitively bid contract.

Public Impact

The primary beneficiaries are the Department of Defense, specifically units requiring support for the JLENS (Joint Land Attack Cruise Missile Defense Engagement Capability) system. Services delivered include engineering and logistics support, crucial for maintaining the operational readiness of advanced defense systems. The geographic impact is likely concentrated around the operational locations of the JLENS system, which are typically strategic defense installations. Workforce implications include the employment of specialized engineers, technicians, and logistics personnel by Raytheon to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
Potential for cost overruns if not closely managed due to lack of competitive pressure.
Dependence on a single contractor for critical support functions.

Positive Signals

Firm Fixed Price contract provides cost predictability.
Award to an established defense contractor (Raytheon) suggests technical capability.
Contract awarded by DCMA indicates a level of oversight.

Sector Analysis

The defense sector is characterized by complex, high-value contracts for advanced technology and support services. Contracts like this, for engineering and logistics support of specialized defense systems, are common. The market for such services is often concentrated among a few large defense contractors due to the specialized knowledge and security clearances required. Benchmarking would involve comparing this contract's value and scope to other support contracts for similar sophisticated military equipment.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to involve significant subcontracting opportunities for small businesses based on the provided data. The award to a large prime contractor like Raytheon suggests that the primary execution will be handled by the prime or its large subcontractors, potentially limiting direct opportunities for the small business ecosystem in this specific procurement.

Oversight & Accountability

The Defense Contract Management Agency (DCMA) is responsible for overseeing this contract, which includes monitoring performance, ensuring compliance with contract terms, and managing payments. The firm fixed-price nature of the contract provides a degree of financial oversight by establishing a set cost. Transparency is generally maintained through contract databases, though specific performance details and internal oversight reports may not be publicly accessible.

Related Government Programs

JLENS Program Support
Defense Logistics Support Contracts
Engineering Services for Defense Systems
Electronic Equipment Maintenance Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for cost escalation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.6 million to RAYTHEON COMPANY. IGF::OT::IGF JLENS ENGINEERING&LOGISTICS 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 $37.6 million.

What is the period of performance?

Start: 2014-12-05. End: 2016-09-30.

What is Raytheon Company's track record with similar sole-source defense contracts?

Raytheon Company, now part of RTX, has a long history of securing sole-source contracts within the Department of Defense and other government agencies. These awards are often based on their established expertise, proprietary technology, or the unique nature of the systems they produce and support. While sole-source awards can raise concerns about competition, they are frequently justified for complex systems where Raytheon is the original equipment manufacturer or possesses specialized knowledge essential for sustainment. Analyzing past sole-source awards to Raytheon for similar engineering and logistics support would reveal patterns in contract value, duration, and the justifications provided for the lack of competition. This context is crucial for understanding the rationale behind this specific JLENS contract.

How does the $37.6 million value compare to other JLENS support contracts or similar defense system sustainment contracts?

Benchmarking the $37.6 million value requires comparing it to historical spending on the JLENS program and similar defense system sustainment contracts. The JLENS program itself has faced scrutiny and changes in scope over its history. Without access to detailed historical contract data for JLENS sustainment or comparable contracts for other complex radar and defense engagement systems (e.g., Patriot, THAAD), a direct comparison is difficult. However, multi-million dollar contracts for engineering and logistics support are typical for major defense platforms. The value should be assessed relative to the system's complexity, the scope of services (engineering, maintenance, logistics), and the contract duration (665 days). A higher value might be justified if the scope includes significant engineering redesign or extensive depot-level maintenance.

What are the primary risks associated with a sole-source award for critical defense system support?

The primary risks associated with a sole-source award for critical defense system support, such as the JLENS Engineering & Logistics Support contract, revolve around cost and performance. Without competitive pressure, there's a heightened risk that the contractor may not be incentivized to offer the lowest possible price, potentially leading to cost overruns for the government. Furthermore, the government's leverage in negotiating terms or demanding improvements is reduced. Dependence on a single provider for critical sustainment can also create vulnerabilities if the contractor experiences financial difficulties, operational issues, or decides to exit the market. Ensuring robust oversight, clear performance metrics, and strong contract management becomes paramount to mitigate these risks.

What is the expected program effectiveness or outcome of this contract for the JLENS system?

The expected outcome of this contract is the continued operational readiness and effective functioning of the Joint Land Attack Cruise Missile Defense Engagement Capability (JLENS) system. This involves ensuring that the system's hardware and software are maintained, repaired, and logistically supported to meet the Department of Defense's mission requirements. Effective execution of engineering and logistics support should translate to higher system availability, reduced downtime, and the ability to respond to threats as intended. The contract's success hinges on Raytheon's ability to provide timely and high-quality technical expertise and logistical services, thereby contributing directly to the overall effectiveness of the U.S. missile defense architecture.

How has federal spending on 'Other Electronic and Precision Equipment Repair and Maintenance' (NAICS 811219) trended, and how does this contract fit?

Federal spending under NAICS code 811219, 'Other Electronic and Precision Equipment Repair and Maintenance,' encompasses a wide array of services beyond just defense systems. This category includes repair and maintenance for various electronic equipment, communication devices, and precision instruments across different government agencies. Spending trends in this sector can fluctuate based on the lifecycle of government equipment, modernization efforts, and specific agency needs. This $37.6 million contract for JLENS support represents a significant, albeit specific, portion of spending within this broad category, highlighting the specialized nature of defense equipment maintenance. Analyzing broader trends would require examining aggregate spending data for this NAICS code across all federal agencies over several fiscal years.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Other Electronic and Precision Equipment Repair and Maintenance

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W9113M14R0011

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 225 PRESIDENTIAL WAY, WOBURN, MA, 01801

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: $37,637,170

Exercised Options: $37,637,170

Current Obligation: $37,637,170

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $27,972,126

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline