DoD Awards Raytheon $262M for Computer Systems Design Services via Full and Open Competition
Contract Overview
Contract Amount: $262,257,862 ($262.3M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2019-02-08
End Date: 2021-02-05
Contract Duration: 728 days
Daily Burn Rate: $360.2K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIXED PRICE INCENTIVE
Sector: IT
Official Description: NCMC / ITWAA - INCREMENTAL FUNDING MOD FOR TO-2
Place of Performance
Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80910
State: Colorado Government Spending
Plain-Language Summary
Department of Defense obligated $262.3 million to RAYTHEON COMPANY for work described as: NCMC / ITWAA - INCREMENTAL FUNDING MOD FOR TO-2 Key points: 1. Significant contract value of $262.3M for IT services. 2. Awarded to Raytheon Company, a major defense contractor. 3. Utilizes a Fixed Price Incentive contract type. 4. Competition was full and open, suggesting potential for competitive pricing.
Value Assessment
Rating: good
The $262.3M award for Computer Systems Design Services appears reasonable given the scope and duration. Benchmarking against similar large-scale IT service contracts would provide further validation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically fosters competitive pricing and allows for a broad range of qualified vendors to bid. The use of a delivery order under an existing contract structure is noted.
Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it drives down costs through market forces.
Public Impact
Supports critical Department of Defense IT infrastructure. Ensures continued operation and modernization of Air Force systems. Impacts the defense technology and IT services sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Incremental funding can sometimes obscure total contract cost visibility.
- Fixed Price Incentive contracts require careful monitoring to manage cost overruns.
Positive Signals
- Full and open competition promotes market efficiency.
- Award to a known, capable contractor like Raytheon.
- Clear contract type (Fixed Price Incentive) for performance-based work.
Sector Analysis
This contract falls within the IT sector, specifically computer systems design services, a critical area for government operations. Spending benchmarks for similar IT services contracts with the DoD are typically in the hundreds of millions for complex projects.
Small Business Impact
While the award went to a large prime contractor, Raytheon, the use of full and open competition could potentially allow for subcontracting opportunities for small businesses within their supply chain.
Oversight & Accountability
The Department of the Air Force is responsible for oversight. The contract type and competitive award suggest a structured approach to accountability, though specific oversight mechanisms are not detailed here.
Related Government Programs
- Computer Systems Design Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Potential for cost overruns inherent in FPI contracts.
- Reliance on a single large prime contractor.
- Visibility into total contract cost with incremental funding.
- Cybersecurity risks associated with critical defense IT systems.
Tags
computer-systems-design-services, department-of-defense, co, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $262.3 million to RAYTHEON COMPANY. NCMC / ITWAA - INCREMENTAL FUNDING MOD FOR TO-2
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 Air Force).
What is the total obligated amount?
The obligated amount is $262.3 million.
What is the period of performance?
Start: 2019-02-08. End: 2021-02-05.
What specific computer systems are being designed or supported under this contract?
The contract details 'Computer Systems Design Services' for the Department of the Air Force. While the specific systems are not enumerated in this summary, such services typically encompass the design, development, integration, and maintenance of complex IT infrastructure, including hardware, software, and network components essential for military operations.
What are the key performance metrics and incentives within the Fixed Price Incentive contract?
A Fixed Price Incentive (FPI) contract aims to share cost savings or overruns between the government and contractor. Key performance metrics would likely relate to system performance, uptime, and delivery schedules. The incentive structure would be tied to achieving target costs and performance levels, with defined sharing ratios for deviations.
How does this $262M award compare to typical annual IT spending for the Air Force?
The $262M award represents a significant, but not unusual, investment for a multi-year IT service contract within a large organization like the Air Force. Annual IT spending for the DoD often runs into the tens of billions, making this a substantial project but one component of a much larger technology budget.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Parent Company: RTX Corp
Address: 1330 INVERNESS DR STE 200, COLORADO SPRINGS, CO, 80910
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: $267,277,102
Exercised Options: $267,277,102
Current Obligation: $262,257,862
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA872315D0001
IDV Type: IDC
Timeline
Start Date: 2019-02-08
Current End Date: 2021-02-05
Potential End Date: 2021-02-05 00:00:00
Last Modified: 2023-07-21
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