Raytheon awarded $39.9M contract for electronic modules, highlighting significant defense spending in Indiana

Contract Overview

Contract Amount: $39,901,079 ($39.9M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2004-08-12

End Date: 2007-01-31

Contract Duration: 902 days

Daily Burn Rate: $44.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200412!001772!2100!W911QX!USA MATERIEL COMMAND ACQUISITION!W911QX04C0114 !A!N! !N! ! !20040812!20050801!009752957!112820840!001339159!N!RAYTHEON TECHNICAL SERVICES CO!6125 E 21ST STREET !INDIANAPOLIS !IN!46219!36000!097!18!INDIANAPOLIS !MARION !INDIANA !+000002653233!N!N!000002653233!5963!ELECTRONIC MODULES !C9E!ALL OTHER SUPPLIES AND EQUIPMENT !000 !* !334515!E! !3! ! ! ! ! !99990909!B! ! !N!A!A!U!J!2!005!N!2A!A!N!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!N! ! ! ! !1727!SL EA !0001! !

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46219

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $39.9 million to RAYTHEON COMPANY for work described as: 200412!001772!2100!W911QX!USA MATERIEL COMMAND ACQUISITION!W911QX04C0114 !A!N! !N! ! !20040812!20050801!009752957!112820840!001339159!N!RAYTHEON TECHNICAL SERVICES CO!6125 E 21ST STREET !INDIANAPOLIS !IN!46219!36000!097!18!INDIANAPOLIS !MARI… Key points: 1. Contract value of $39.9 million represents a substantial investment in specialized electronic components. 2. Awarded to Raytheon Technical Services Co., a major defense contractor with a significant presence. 3. The contract duration of 902 days suggests a long-term need for these electronic modules. 4. The primary use of electronic modules points to critical applications within defense systems. 5. Indiana's role as a manufacturing hub for defense components is reinforced by this award. 6. The contract's fixed-price nature aims to control costs for the government.

Value Assessment

Rating: good

The contract value of $39.9 million for electronic modules appears reasonable given the duration and the specialized nature of the components. Benchmarking against similar contracts for electronic modules is challenging without more specific technical details, but the award to a large, established contractor like Raytheon suggests a competitive process that likely yielded a fair price. The firm fixed-price structure further supports cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of 5 bids suggests a healthy level of competition for this requirement. A competitive process generally leads to better price discovery and ensures the government receives the best value from a range of potential suppliers.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that drives down costs and ensures efficient use of public funds for critical defense needs.

Public Impact

The U.S. Department of the Army is the primary beneficiary, receiving essential electronic modules for its operations. These electronic modules are likely critical components for various defense systems, ensuring operational readiness. The contract supports manufacturing and technical services jobs within Indiana, contributing to the local economy. The geographic impact is concentrated in Indiana, where Raytheon Technical Services Co. is located.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen technical challenges arise in the production of specialized electronic modules.
Dependence on a single contractor for a critical component could pose supply chain risks.
The long contract duration may not fully account for rapid technological advancements in electronics.

Positive Signals

Award to a reputable contractor with a proven track record in defense manufacturing.
Firm fixed-price contract structure provides cost certainty for the government.
Full and open competition ensures a robust selection process and potential for innovation.
The contract supports domestic manufacturing and skilled labor within the United States.

Sector Analysis

This contract falls within the broader defense electronics sector, a significant segment of the overall defense industry. The market for specialized electronic modules is driven by the demand for advanced military hardware and systems. Comparable spending benchmarks would typically involve other contracts for similar electronic components or sub-assemblies for military applications, often in the tens to hundreds of millions of dollars depending on complexity and volume.

Small Business Impact

While this contract was awarded to a large prime contractor, Raytheon, there is no explicit indication of a small business set-aside. However, large prime contractors are often required to subcontract a portion of their work to small businesses. The impact on the small business ecosystem would depend on the specific subcontracting plan developed for this contract, potentially creating opportunities for specialized small businesses in electronics manufacturing or support services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified goods. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Procurement
Army Weapon Systems Support
Electronic Component Manufacturing
Defense Industrial Base

Risk Flags

Potential for supply chain disruption
Risk of technological obsolescence over contract duration
Dependence on a single large contractor for critical components

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.9 million to RAYTHEON COMPANY. 200412!001772!2100!W911QX!USA MATERIEL COMMAND ACQUISITION!W911QX04C0114 !A!N! !N! ! !20040812!20050801!009752957!112820840!001339159!N!RAYTHEON TECHNICAL SERVICES CO!6125 E 21ST STREET !INDIANAPOLIS !IN!46219!36000!097!18!INDIANAPOLIS !MARION !INDIANA !+000002653233!N!N!000002653233!5963!ELECTRONIC MODULES !C9E!ALL OTHER SUPPLIES AND EQUIPMENT !000 !* !334515!E! !3! ! ! ! ! !999

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 $39.9 million.

What is the period of performance?

Start: 2004-08-12. End: 2007-01-31.

What is Raytheon Technical Services Co.'s track record with similar electronic module contracts for the Department of the Army?

Raytheon Technical Services Co., as a subsidiary of Raytheon Company, has a long and extensive history of providing complex electronic systems and components to the Department of Defense, including the Army. While specific contract details for identical 'electronic modules' are not readily available in this summary, Raytheon's overall portfolio includes work on radar systems, communication equipment, and other platforms that heavily rely on sophisticated electronic assemblies. Their track record generally indicates a capacity to handle large, technically demanding contracts. Historical performance data, if available through government databases, would provide a more granular view of their on-time delivery, quality, and cost performance on past related projects.

How does the $39.9 million value compare to other contracts for electronic modules within the defense sector?

The $39.9 million contract value for electronic modules is a significant award, but its relative size depends heavily on the specific type, quantity, and technological sophistication of the modules. Contracts for basic electronic components might be much smaller, while those for highly specialized, integrated systems or large-volume production runs could easily exceed this amount. For context, major defense programs often involve billions of dollars in electronics. This $39.9 million award suggests a substantial, but not necessarily program-defining, requirement for these specific modules, likely supporting a particular weapon system or platform upgrade.

What are the primary risks associated with this contract, and how are they mitigated?

Key risks include potential technical challenges in manufacturing complex electronic modules, leading to delays or cost overruns, and supply chain disruptions for critical components. The long contract duration (902 days) also introduces risks related to obsolescence or the emergence of superior technologies. Mitigation strategies likely involve stringent quality control processes, robust supplier management by Raytheon, and clear performance metrics within the firm fixed-price contract. The government's oversight and the competitive nature of the award also serve as risk mitigators by selecting a capable contractor and establishing clear expectations.

How effective is the 'full and open competition after exclusion of sources' in ensuring value for taxpayers?

The 'full and open competition after exclusion of sources' (often a variation of full and open competition) is generally considered a highly effective method for ensuring value for taxpayers. It allows all responsible sources to submit bids, fostering a competitive environment that drives down prices and encourages innovation. The 'exclusion of sources' part might refer to specific pre-qualification criteria or the exclusion of certain foreign sources for national security reasons. By maximizing the pool of potential bidders, the government increases its leverage to negotiate favorable terms and pricing, ultimately leading to better use of public funds compared to sole-source or limited competition scenarios.

What is the historical spending pattern for electronic modules by the Department of the Army?

Historical spending patterns for electronic modules by the Department of the Army are substantial and consistent, reflecting the critical role of electronics in modern military operations. The Army procures vast quantities of electronic components, sub-assemblies, and integrated systems across numerous platforms, including vehicles, communication systems, sensors, and weapon systems. Spending fluctuates based on modernization programs, readiness requirements, and specific technological upgrades. While this specific $39.9 million contract represents a discrete investment, the Army's overall annual expenditure on electronic and electrical equipment, parts, and services runs into the billions of dollars, underscoring the continuous demand for such components.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals

Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 6125 E 21ST STREET, INDIANAPOLIS, IN, 07

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $52,191

Exercised Options: $52,191

Current Obligation: $39,901,079

Contract Characteristics

Cost or Pricing Data: NO

Timeline