DoD's $32.7M Radar Upgrade Contract Awarded to Raytheon Company for R&D Support

Contract Overview

Contract Amount: $32,747,653 ($32.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2018-09-26

End Date: 2025-01-31

Contract Duration: 2,319 days

Daily Burn Rate: $14.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: THE CONTRACTOR WILL PERFORM ALL TASKS RELATED TO THE GROUND BASED RADAR (GBR) UPGRADE SUPPORT TO TRANSFORM THE GBR TO AN INSTRUMENTATION RADAR.

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35898

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $32.7 million to RAYTHEON COMPANY for work described as: THE CONTRACTOR WILL PERFORM ALL TASKS RELATED TO THE GROUND BASED RADAR (GBR) UPGRADE SUPPORT TO TRANSFORM THE GBR TO AN INSTRUMENTATION RADAR. Key points: 1. Contract focuses on transforming Ground Based Radar (GBR) to an instrumentation radar, indicating a significant technological advancement. 2. The award was made under full and open competition, suggesting a competitive bidding process. 3. The contract type is Cost Plus Fixed Fee (CPFF), which allows for cost reimbursement plus a fixed fee, potentially leading to cost overruns if not managed carefully. 4. The contract duration is substantial at 2319 days, spanning from late 2018 to early 2025, indicating a long-term project. 5. The contract is for Research and Development in Physical, Engineering, and Life Sciences, aligning with advanced technological pursuits. 6. The primary performance location is Alabama, suggesting a concentration of work and potential economic impact in that state.

Value Assessment

Rating: fair

The contract's Cost Plus Fixed Fee (CPFF) structure warrants careful monitoring to ensure cost efficiency. While specific cost benchmarks are not provided, the substantial duration and R&D nature suggest a complex undertaking. Benchmarking against similar radar system upgrade contracts would be necessary for a more precise value assessment. The fixed fee component provides some cost control, but the variable cost reimbursement aspect requires diligent oversight.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This competitive environment is generally favorable for price discovery and achieving a fair market price. The number of bidders is not specified, but the 'full and open' designation suggests a robust competition.

Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which is intended to drive down costs and ensure the government receives the best value for its investment in this critical radar upgrade.

Public Impact

The Department of Defense benefits through the upgrade of its Ground Based Radar (GBR) system, enhancing its instrumentation capabilities. The contract supports research and development in advanced physical and engineering sciences. The primary geographic impact is in Alabama, where the contract will be performed. The contract likely supports a specialized workforce in engineering, research, and radar technology.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contracts can lead to cost overruns if not managed diligently, as the contractor is reimbursed for actual costs incurred.
The long duration of the contract (over 6 years) increases the risk of scope creep or evolving technological requirements impacting the final cost and timeline.
Lack of specific performance metrics or detailed cost breakdowns in the provided data makes it difficult to assess efficiency and value for money comprehensively.

Positive Signals

Awarded under full and open competition, suggesting a competitive process that should yield better pricing.
The contract is for a critical R&D function, aiming to modernize essential radar infrastructure.
The fixed fee component in the CPFF contract provides a degree of cost certainty for the contractor's profit margin.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on Research and Development for advanced radar technology. The market for defense-related R&D is characterized by high technological complexity and significant government investment. Comparable spending benchmarks would typically involve other major defense system upgrades or development programs, often running into tens or hundreds of millions of dollars.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this specific contract. Therefore, the direct impact on small businesses through set-asides is likely minimal. However, the prime contractor, Raytheon Company, may engage small businesses as subcontractors, contributing indirectly to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army contracting officers and program managers. Accountability measures would be tied to the CPFF contract terms, requiring detailed reporting on costs and progress. Transparency is facilitated by the contract's public award notice, but detailed cost breakdowns and performance reports are usually internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Ground Based Radar Systems
Defense Research and Development Programs
Instrumentation Radar Technology
Department of Defense Procurement

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type may lead to cost overruns.
Long contract duration increases risk of technological obsolescence and scope creep.
Lack of specific performance metrics makes value assessment difficult.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.7 million to RAYTHEON COMPANY. THE CONTRACTOR WILL PERFORM ALL TASKS RELATED TO THE GROUND BASED RADAR (GBR) UPGRADE SUPPORT TO TRANSFORM THE GBR TO AN INSTRUMENTATION RADAR.

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $32.7 million.

What is the period of performance?

Start: 2018-09-26. End: 2025-01-31.

What is the track record of Raytheon Company in delivering similar radar upgrade or R&D projects for the Department of Defense?

Raytheon Company, now part of RTX, has a long and extensive history of developing and supplying advanced radar systems and related technologies to the Department of Defense and other government agencies. They are a major defense contractor known for their expertise in areas such as air and missile defense, intelligence, surveillance, and reconnaissance (ISR), and electronic warfare. Their portfolio includes a wide range of radar platforms, from tactical ground-based systems to sophisticated airborne and space-based sensors. While specific details on past performance for identical 'Ground Based Radar (GBR) upgrade support to transform the GBR to an instrumentation radar' projects are not publicly detailed in this award notice, Raytheon's established presence and capabilities in radar technology suggest a strong foundational capacity to undertake such a complex R&D initiative. Performance on previous large-scale defense contracts, including those involving complex system integration and technological modernization, would be a key indicator of their ability to successfully execute this contract.

How does the Cost Plus Fixed Fee (CPFF) contract structure compare to other contract types for R&D projects of this nature?

The Cost Plus Fixed Fee (CPFF) contract type is commonly used for research and development (R&D) projects where the scope of work is not precisely defined at the outset, or where innovation and exploration are key objectives. In a CPFF contract, the contractor is reimbursed for all allowable costs incurred during the performance of the contract, plus a fixed fee representing profit. This structure incentivizes the contractor to control costs, as the fee remains constant regardless of the final cost. However, it also places a significant burden on the government to meticulously audit and approve costs. Compared to Fixed Price contracts, CPFF offers more flexibility for evolving R&D requirements but carries a higher risk of cost growth for the government. Conversely, Cost Plus Incentive Fee (CPIF) or Cost Plus Award Fee (CPAF) contracts might offer stronger incentives for performance and cost savings by linking a portion of the fee to specific performance targets or outcomes, which could be more advantageous for long-term, complex R&D endeavors if well-defined metrics are established.

What are the potential risks associated with the long duration (2319 days) of this contract?

The extended duration of 2319 days (approximately 6.3 years) for this radar upgrade contract presents several potential risks. Firstly, technological obsolescence is a significant concern; the technology landscape, particularly in radar systems, can evolve rapidly. By the time the contract concludes, the upgraded system might be based on technologies that are already nearing the end of their lifecycle or have been surpassed by newer innovations. Secondly, scope creep is a common risk in long-term projects. As the project progresses and understanding deepens, there's a tendency for requirements to expand beyond the original scope, leading to increased costs and potential delays. Thirdly, maintaining consistent project management focus and technical expertise over such a long period can be challenging for both the contractor and the government oversight team. Finally, economic and geopolitical factors can change, potentially impacting funding priorities or the strategic relevance of the radar system being upgraded.

Can the value for money be assessed without knowing the specific performance metrics and deliverables?

Assessing the true value for money for this contract is challenging without detailed performance metrics and specific deliverables. The provided information indicates a Cost Plus Fixed Fee (CPFF) structure and a broad objective of transforming the GBR to an instrumentation radar. While the contract award amount ($32.7 million) provides a baseline expenditure, it doesn't inherently reflect the value received. Value for money is typically determined by comparing the outcomes achieved (performance, capability enhancement, reliability) against the costs incurred. In R&D contracts, especially those with a CPFF structure, the 'value' is often realized in the form of new knowledge, technological advancements, and the potential for future operational benefits, which are harder to quantify upfront than in procurement of standard goods or services. A comprehensive assessment would require access to interim and final performance reports, technical evaluations, and comparisons of the achieved capabilities against the initial objectives and industry benchmarks.

What is the significance of the 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)' NAICS code (541712)?

The North American Industry Classification System (NAICS) code 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology),' signifies that the primary purpose of this contract is to conduct scientific research and experimental development in these fields. This code is distinct from manufacturing, product testing, or routine engineering services. It implies that the work undertaken by Raytheon Company will involve systematic investigation to discover or refine knowledge and understanding, and the application of research findings to create new or improve existing materials, products, processes, or services. For the Department of the Army, this classification suggests a focus on innovation and advancing the state-of-the-art in radar technology, rather than simply procuring or maintaining existing systems. Contracts under this code often involve higher levels of uncertainty and require specialized scientific and engineering expertise.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: W9113M13R0010

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 50 APPLE HILL DR, TEWKSBURY, MA, 01876

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: $35,194,114

Exercised Options: $35,194,114

Current Obligation: $32,747,653

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $707,925

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9113M17D0006

IDV Type: IDC

Timeline