Raytheon Company awarded $103.6M for Distributed Common Ground Station mission support and maintenance

Contract Overview

Contract Amount: $103,629,434 ($103.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2015-10-01

End Date: 2017-02-01

Contract Duration: 489 days

Daily Burn Rate: $211.9K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::CT::IGF_DISTRIBUTED COMMON GROUND STATION MISSION SUPPORT AND MAINTENANCE PERSONNEL

Place of Performance

Location: STERLING, LOUDOUN County, VIRGINIA, 20166

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $103.6 million to RAYTHEON COMPANY for work described as: IGF::CT::IGF_DISTRIBUTED COMMON GROUND STATION MISSION SUPPORT AND MAINTENANCE PERSONNEL Key points: 1. Contract awarded as a sole-source delivery order, raising questions about potential price efficiencies. 2. The contract duration of 489 days suggests a need for sustained support services. 3. Engineering services are critical for maintaining complex defense systems. 4. The contract was awarded by the Department of Defense, indicating a focus on national security. 5. The use of a Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not managed carefully. 6. No small business set-aside was utilized, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: questionable

The contract's value of $103.6 million for a period of approximately 16 months requires careful benchmarking against similar mission support contracts. Without comparative data on the scope and complexity of services provided, assessing value for money is challenging. The CPFF pricing structure, while common for complex R&D or services where costs are uncertain, carries inherent risks of exceeding initial estimates. Further analysis would be needed to determine if the fixed fee adequately incentivized efficiency or if the cost-plus component allowed for significant cost growth.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source delivery order, meaning it was not competed among multiple vendors. This approach is typically justified when a specific contractor possesses unique capabilities or when urgency dictates a rapid award. The lack of competition means that taxpayers did not benefit from the price discovery that typically occurs in a competitive bidding process, potentially leading to higher costs than if multiple offers had been solicited.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible price through competitive negotiation, potentially resulting in less favorable terms for taxpayers.

Public Impact

The primary beneficiaries are the Department of Defense personnel who rely on the Distributed Common Ground Station for intelligence, surveillance, and reconnaissance missions. Services delivered include mission support and maintenance personnel, crucial for the operational readiness of critical defense infrastructure. The geographic impact is likely concentrated within areas where the Distributed Common Ground Station is deployed, potentially including overseas locations. Workforce implications include the employment of specialized personnel, likely engineers and technical staff, to support these complex systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost Plus Fixed Fee contract type can lead to cost escalation if not tightly managed.
Lack of small business participation may reduce opportunities for smaller, innovative firms.

Positive Signals

Contract supports critical national security infrastructure.
Engineering services are essential for maintaining advanced defense systems.
Delivery order indicates a specific, defined need within a larger framework.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense-related IT and intelligence infrastructure. The market for such specialized support is often dominated by a few large defense contractors due to the high barriers to entry, including security clearances, specialized expertise, and established relationships with government agencies. Benchmarking comparable spending would require identifying other contracts for similar ground station support or intelligence system maintenance.

Small Business Impact

The contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. This suggests that the prime contractor, Raytheon Company, will likely perform the majority of the work with its own resources. The absence of small business participation in this specific award means that opportunities for smaller firms to contribute to this particular defense mission support effort were not actively pursued through this contract vehicle.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The CPFF contract type necessitates rigorous financial oversight to monitor costs and ensure the fixed fee remains appropriate. Transparency regarding the specific services rendered and the justification for the sole-source award would be key accountability measures. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Intelligence, Surveillance, and Reconnaissance (ISR) Systems Support
Ground Systems Maintenance Contracts
Defense IT Infrastructure Support
Mission Critical Systems Engineering

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Potential for cost overruns
Lack of competitive pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $103.6 million to RAYTHEON COMPANY. IGF::CT::IGF_DISTRIBUTED COMMON GROUND STATION MISSION SUPPORT AND MAINTENANCE PERSONNEL

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 $103.6 million.

What is the period of performance?

Start: 2015-10-01. End: 2017-02-01.

What is the track record of Raytheon Company in delivering similar mission support and maintenance services for defense intelligence systems?

Raytheon Company, now part of RTX, has a long and extensive history of providing complex systems engineering, integration, and support services to the Department of Defense and intelligence agencies. They are a major contractor for various defense platforms, including radar, command and control systems, and intelligence processing capabilities. Their experience with programs like the Distributed Common Ground System (DCGS) family of systems is well-established, suggesting a strong capability to fulfill the requirements of this contract. However, performance can vary across specific contracts, and a detailed review of past performance metrics, including any past issues or successes on similar DCGS support contracts, would be necessary for a comprehensive assessment.

How does the $103.6 million contract value compare to other contracts for Distributed Common Ground Station mission support?

Benchmarking the $103.6 million value requires understanding the specific scope of services, duration, and complexity of the DCGS mission support provided under this contract. Contracts for similar systems can vary significantly. For instance, longer-term sustainment contracts for entire DCGS architectures, including hardware, software, and personnel, could easily run into hundreds of millions or even billions of dollars over their lifecycle. Conversely, smaller, more focused support or maintenance contracts for specific components or geographic locations might be in the tens of millions. Without detailed comparative data on the specific deliverables and service levels, it's difficult to definitively state whether $103.6 million represents a high, low, or average cost for this particular type of support.

What are the primary risks associated with a sole-source, Cost Plus Fixed Fee (CPFF) contract for critical defense systems?

The primary risks associated with a sole-source, CPFF contract for critical defense systems are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to inflated pricing and reduced incentive for the contractor to innovate or optimize costs. The government foregoes the opportunity to solicit multiple bids and negotiate the best possible price. Secondly, the CPFF structure, while providing flexibility for uncertain costs, carries a significant risk of cost overruns. The contractor is reimbursed for allowable costs plus a fixed fee, which can incentivize cost-plus behavior rather than cost control. Effective oversight is crucial to mitigate these risks, ensuring that costs are reasonable and the fixed fee is appropriate for the level of effort and risk undertaken.

How effective is the Defense Contract Management Agency (DCMA) in overseeing sole-source CPFF contracts for mission-critical systems?

The Defense Contract Management Agency (DCMA) plays a crucial role in overseeing contracts, including sole-source CPFF agreements for mission-critical systems. Their effectiveness hinges on several factors, including adequate staffing, specialized expertise in contract types like CPFF, and robust oversight processes. DCMA's responsibilities include monitoring contractor performance, ensuring compliance with contract terms, auditing costs, and verifying deliverables. For CPFF contracts, their oversight is particularly critical in scrutinizing allowable costs and ensuring the contractor maintains efficient operations to stay within the anticipated cost base. While DCMA has established procedures, the sheer volume and complexity of defense contracts mean that oversight effectiveness can vary, and proactive engagement from both the government and the contractor is essential.

What are the historical spending patterns for Distributed Common Ground Station (DCGS) mission support and maintenance?

Historical spending on Distributed Common Ground Station (DCGS) mission support and maintenance has been substantial, reflecting the critical role these systems play in national security. The DCGS program itself is a complex, evolving enterprise involving numerous contracts for hardware, software development, integration, sustainment, and personnel support across various military branches and intelligence agencies. Annual spending can fluctuate based on modernization efforts, operational tempo, and specific system upgrades. While a precise aggregate figure is difficult to pinpoint without access to comprehensive defense spending databases, it is safe to assume that cumulative spending over the years for DCGS sustainment and support runs into the billions of dollars, with individual contracts like the one awarded to Raytheon representing significant portions of this ongoing investment.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp (UEI: 001344142)

Address: 22260 PACIFIC BLVD, DULLES, VA, 20166

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: $106,429,434

Exercised Options: $106,429,434

Current Obligation: $103,629,434

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA852716D0050

IDV Type: IDC

Timeline