DoD's $49.7M Raytheon Contract for Remanufacture, Overhaul, or Repair Services Shows Fair Value
Contract Overview
Contract Amount: $49,762,934 ($49.8M)
Contractor: Raytheon Technical Services Company LLC
Awarding Agency: Department of Defense
Start Date: 2010-10-01
End Date: 2017-06-21
Contract Duration: 2,455 days
Daily Burn Rate: $20.3K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIXED PRICE REDETERMINATION
Sector: Other
Official Description: REMANUFACTURE, OVERHAUL OR REPAIR SECREP
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20191
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $49.8 million to RAYTHEON TECHNICAL SERVICES COMPANY LLC for work described as: REMANUFACTURE, OVERHAUL OR REPAIR SECREP Key points: 1. The contract awarded to Raytheon Technical Services Company LLC for logistics consulting services represents a significant investment in maintaining critical defense assets. 2. Competition was full and open, suggesting a robust price discovery process. 3. The fixed-price redetermination contract type introduces some risk related to final cost adjustments. 4. The sector is primarily logistics and consulting services within the Department of Defense.
Value Assessment
Rating: fair
The contract's value of $49.7M over its period of performance appears reasonable for complex remanufacturing and overhaul services. Benchmarking against similar large-scale defense maintenance contracts would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically leads to competitive pricing. The fixed-price redetermination structure allows for initial price negotiation with subsequent adjustments based on actual costs, aiming to balance risk between the government and contractor.
Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through market forces. However, the redetermination clause requires careful monitoring to ensure the final price reflects true costs and avoids excessive profit.
Public Impact
Ensures readiness of critical defense equipment through specialized maintenance. Supports national security by maintaining the operational capability of naval assets. Provides employment opportunities within the defense contracting sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns due to fixed-price redetermination.
- Contract duration is lengthy, increasing exposure to market and technological changes.
- Lack of specific performance metrics in provided data.
Positive Signals
- Awarded under full and open competition.
- Contract addresses essential defense maintenance needs.
- Experienced contractor, Raytheon Technical Services Company LLC.
Sector Analysis
This contract falls within the professional, scientific, and technical services sector, specifically logistics consulting. Spending in this area is crucial for efficient defense operations, with benchmarks varying widely based on the complexity and scale of services required.
Small Business Impact
The provided data does not indicate any specific subcontracting goals or participation by small businesses in this contract. Further investigation would be needed to determine the extent of small business involvement.
Oversight & Accountability
The Department of the Navy, as the contracting agency, is responsible for oversight. The fixed-price redetermination contract type necessitates diligent monitoring of costs and performance to ensure accountability and value for taxpayer money.
Related Government Programs
- Process, Physical Distribution, and Logistics Consulting Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Potential for cost escalation due to redetermination clause.
- Long contract duration increases exposure to changing requirements.
- Lack of specific details on equipment serviced.
- No clear indication of small business participation.
Tags
process-physical-distribution-and-logist, department-of-defense, va, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $49.8 million to RAYTHEON TECHNICAL SERVICES COMPANY LLC. REMANUFACTURE, OVERHAUL OR REPAIR SECREP
Who is the contractor on this award?
The obligated recipient is RAYTHEON TECHNICAL SERVICES COMPANY LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $49.8 million.
What is the period of performance?
Start: 2010-10-01. End: 2017-06-21.
What specific types of equipment or systems are covered under this 'remanufacture, overhaul, or repair' contract, and how does their criticality impact the overall value assessment?
The specific equipment is not detailed, but 'secrep' likely refers to sensitive or critical systems within the Navy's purview. The criticality of these assets directly influences the contract's value, as ensuring their operational readiness is paramount for national security. High criticality justifies higher spending if it guarantees reliability and extended service life, making the $49.7M potentially well-justified if it secures vital capabilities.
How effectively does the fixed-price redetermination clause manage cost risks for the government compared to other contract types like firm-fixed-price or cost-plus?
Fixed-price redetermination offers a middle ground. It provides an initial price ceiling while allowing adjustments based on actual costs, unlike firm-fixed-price which offers more certainty but less flexibility for unforeseen issues. Compared to cost-plus, it imposes more cost discipline on the contractor. However, it requires robust government auditing and negotiation to prevent contractor overreach and ensure the final price is fair and reasonable.
What are the key performance indicators (KPIs) used to measure the effectiveness of Raytheon Technical Services Company LLC in fulfilling this contract, and how are they tracked?
Key performance indicators for such a contract would typically include turnaround time for repairs, quality of work (e.g., defect rates post-overhaul), adherence to technical specifications, and successful recertification of equipment. The effectiveness is measured by the contractor's ability to meet these defined metrics, which are usually tracked through regular performance reports, inspections, and user feedback from the naval units receiving the serviced equipment.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Process, Physical Distribution, and Logistics Consulting Services
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: M6700410R0002
Pricing Type: FIXED PRICE REDETERMINATION (A)
Evaluated Preference: NONE
Contractor Details
Parent Company: Raytheon Company (UEI: 001339159)
Address: 12160 SUNRISE VALLEY DR, RESTON, VA, 20191
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $49,762,934
Exercised Options: $49,762,934
Current Obligation: $49,762,934
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: M6700410D0021
IDV Type: IDC
Timeline
Start Date: 2010-10-01
Current End Date: 2017-06-21
Potential End Date: 2017-06-21 00:00:00
Last Modified: 2018-09-18
More Contracts from Raytheon Technical Services Company LLC
- Ewgpp Zheleznogorsk Program for NA-23 — $420.3M (Department of Energy)
- 200512!502062!9700!hdtra1!defense Threat Reduction Agency !dtra0101d0013 !A!N! !N!0016 ! !20050608!20080930!931871438!112820840!001339159!n!raytheon Technical Services CO!12160 Sunrise Valley Drive!reston !VA!20191!00000! !RS!* !* !russia !+000050228526!n!n!000000000000!r425!engineering Technical Services !S1 !services !000 !* !541330!E! !5!B!M! !A!C!20060828!B! ! !A! !a!u!r!2!002!b! !Z!N!Z! ! !N!M!N! ! ! ! ! !a!a!000!a!b!n! ! ! !Y! ! !0001! ! — $288.3M (Department of Defense)
- Secrep - ROR — $246.0M (Department of Defense)
- 200511!502164!9700!hdtra1!defense Threat Reduction Agency !dtra0101d0013 !A!N! !Y!0017 ! !20050715!20110716!931871438!112820840!001339159!n!raytheon Technical Services CO!12160 Sunrise Valley Drive!reston !VA!20191!00000! !RS!* !* !russia !+000008055596!n!n!000000000000!r706!logistics Support Services !S1 !services !000 !* !541990!E! !5!B!S! ! ! !20200930!B! ! !n!z!a!u!r!2!001!b! !Z!Y!Z! ! !N!M!N! ! ! ! ! !a!a!000!a!b!n! ! ! ! ! ! !0001! ! — $195.1M (Department of Defense)
- Ewgpp Zheleznogorsk Project — $128.4M (Department of Energy)
View all Raytheon Technical Services Company LLC federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)