Raytheon Company awarded $38.3M R&D contract by DoD, highlighting long-term investment in advanced technologies

Contract Overview

Contract Amount: $38,300,834 ($38.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2004-06-29

End Date: 2010-04-11

Contract Duration: 2,112 days

Daily Burn Rate: $18.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 999

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Place of Performance

Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $38.3 million to RAYTHEON COMPANY for work described as: Key points: 1. Contract awarded for research and development, indicating investment in future capabilities. 2. Long contract duration suggests a complex, multi-year project. 3. Cost-plus-fixed-fee structure allows for flexibility but requires careful oversight. 4. The contract was awarded through full and open competition, suggesting a robust bidding process. 5. The specific NAICS code (541710) points to specialized scientific research and development services. 6. The contract's value is moderate within the context of large-scale defense R&D projects.

Value Assessment

Rating: good

The contract value of $38.3 million for a duration of 2112 days (approximately 5.8 years) suggests a significant but not exceptionally large investment for R&D. Benchmarking against similar R&D contracts would require more specific details on the research area. However, the cost-plus-fixed-fee (CPFF) pricing structure, while common for R&D, can sometimes lead to higher costs if not managed effectively. Without specific deliverables or performance metrics, a precise value-for-money assessment is challenging, but the competitive award process is a positive indicator.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This typically fosters a competitive environment, driving down prices and encouraging innovation. The number of bidders is not specified, but the open competition suggests that the government sought the best possible solution from the widest range of potential contractors. This approach is generally favored for its potential to yield better value and technological advancements.

Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and access to a broader range of innovative solutions. It ensures that the government is not limited to a single provider, promoting efficiency and cost-effectiveness in federal spending.

Public Impact

The primary beneficiaries are the Department of Defense, which will receive advanced research and development outcomes. The contract supports the development of new technologies and scientific advancements within the physical, engineering, and life sciences. The geographic impact is likely concentrated around Raytheon's research facilities, primarily in California. The contract will support a workforce of scientists, engineers, and technical personnel involved in R&D activities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can incentivize contractors to incur costs without direct financial risk, potentially leading to cost overruns if not rigorously monitored.
The long duration of the contract (2112 days) increases the risk of scope creep or evolving technological requirements that may not be fully anticipated at the outset.
Lack of specific performance metrics or deliverables in the provided data makes it difficult to assess the contractor's performance trajectory and potential for success.
The contract is for R&D, which inherently carries a higher risk of failure to achieve desired outcomes compared to procurement of established technologies.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that likely secured favorable terms.
The contractor, Raytheon Company, is a well-established defense contractor with significant experience in R&D, indicating a strong track record.
The contract focuses on research and development, which is crucial for maintaining technological superiority and national security.
The fixed fee component of the CPFF contract provides some level of cost certainty for the government, unlike pure cost-plus-award-fee contracts.

Sector Analysis

The contract falls within the Research and Development (R&D) sector, specifically under NAICS code 541710. This sector is characterized by significant government investment aimed at fostering innovation and technological advancement. The defense industry, in particular, relies heavily on R&D to maintain a strategic advantage. Comparable spending benchmarks in defense R&D can range from millions to billions of dollars, depending on the scope and criticality of the research. This $38.3 million contract represents a focused investment within this broader landscape.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large-scale R&D contract awarded to a major defense contractor, it is unlikely to have significant direct subcontracting opportunities for small businesses unless specified within the contract's statement of work. The focus is on advanced research, which typically requires specialized capabilities often found in larger firms. The impact on the small business ecosystem would be minimal for this specific award.

Oversight & Accountability

Oversight for this contract would primarily be managed by the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. DCMA is responsible for ensuring contractor compliance with contract terms, quality standards, and delivery schedules. The cost-plus-fixed-fee structure necessitates robust financial oversight to monitor incurred costs against the fixed fee. Transparency is generally maintained through contract reporting requirements, though specific details of R&D progress may be sensitive. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Research and Development Programs
Advanced Technology Development Contracts
Aerospace and Defense Research Initiatives
Scientific and Technical Services Contracts

Risk Flags

Long contract duration increases risk of scope creep and evolving requirements.
Cost-plus-fixed-fee structure requires diligent cost oversight to prevent overruns.
R&D inherently carries a risk of not achieving desired outcomes.
Lack of specific performance metrics in provided data hinders detailed assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.3 million to RAYTHEON COMPANY. See the official description on USAspending.

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 $38.3 million.

What is the period of performance?

Start: 2004-06-29. End: 2010-04-11.

What is Raytheon Company's track record with similar R&D contracts awarded by the Department of Defense?

Raytheon Company, now part of RTX Corporation, has a long and extensive history of performing research and development contracts for the Department of Defense. They are a major defense contractor with deep expertise in areas such as aerospace, defense systems, and advanced technologies. Historically, Raytheon has been awarded numerous R&D contracts across various defense agencies, covering a wide spectrum of technological development, from missile systems and radar technology to cybersecurity and space systems. Their track record generally includes successful delivery of complex technological solutions, though like any large contractor, they have also faced scrutiny over specific contract performance and costs on occasion. The sheer volume and complexity of their R&D work suggest a significant capacity and experience base relevant to this $38.3 million award.

How does the $38.3 million value compare to other R&D contracts in the physical, engineering, and life sciences sector awarded by the DoD?

The $38.3 million value for this contract is considered moderate within the broader landscape of Department of Defense Research and Development (R&D) spending. The DoD invests billions annually in R&D, with individual contracts often ranging from tens of millions to several billion dollars, particularly for major system developments or foundational research programs. Contracts for specific scientific research, as indicated by NAICS code 541710, can vary widely. While $38.3 million is a substantial sum, it is not at the upper echelon of defense R&D investments. It suggests a focused research effort rather than a program-defining, large-scale development initiative. Many R&D contracts in areas like advanced materials, artificial intelligence, or next-generation sensors can easily exceed this amount.

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

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for Research and Development (R&D) revolve around cost control and potential for inefficiencies. In a CPFF structure, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. The risk for the contractor is limited to the fixed fee, while the government bears the risk of cost overruns. For R&D, where the scope and outcomes can be uncertain, this structure can incentivize the contractor to incur costs without the same level of cost-consciousness as in a fixed-price contract. If not managed diligently, this can lead to higher overall project costs than initially anticipated. Effective oversight is crucial to ensure that all costs are reasonable, allocable, and necessary for the R&D effort.

What does the contract duration of 2112 days (approx. 5.8 years) imply about the nature of the R&D work?

A contract duration of 2112 days, approximately 5.8 years, for Research and Development (R&D) implies that the work is likely complex, long-term, and may involve multiple phases or iterative development cycles. Such extended timelines are common for foundational research, the development of novel technologies, or projects requiring extensive testing and validation. It suggests that the objectives are not short-term or easily achievable within a few years. This duration also increases the importance of effective project management, adaptability to evolving scientific understanding or technological advancements, and sustained funding commitment from the government. It indicates a strategic investment in developing capabilities that may have a significant future impact.

How does the 'Research and Development in the Physical, Engineering, and Life Sciences' classification impact the potential outcomes and applications of this contract?

The classification 'Research and Development in the Physical, Engineering, and Life Sciences' (NAICS 541710) signifies that the contract is focused on scientific inquiry and technological innovation across a broad range of disciplines. This could encompass advancements in areas such as materials science, advanced manufacturing, robotics, biotechnology, environmental science, or complex engineering systems. The potential outcomes are diverse, ranging from theoretical breakthroughs to the development of prototypes and new methodologies. Applications could span numerous fields, including defense systems, energy solutions, medical technologies, or environmental protection, depending on the specific research focus. This broad classification underscores the contract's role in pushing the boundaries of scientific knowledge and engineering capabilities.

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 › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: BASIC RESEARCH

Offers Received: 999

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 2000 EAST EL SEGUNDO BLVD, EL SEGUNDO, CA, 36

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline