Raytheon awarded $31M for logistics consulting, with significant cost overruns and extended duration

Contract Overview

Contract Amount: $31,092,238 ($31.1M)

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: $12.7K/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 $31.1 million to RAYTHEON TECHNICAL SERVICES COMPANY LLC for work described as: REMANUFACTURE, OVERHAUL OR REPAIR SECREP Key points: 1. Contract value significantly exceeded initial estimates, indicating potential pricing issues. 2. Extended contract duration suggests unforeseen complexities or scope creep. 3. Limited public data on performance metrics makes a comprehensive value assessment challenging. 4. The fixed-price redetermination contract type introduces risk for both parties. 5. This contract falls within the professional services sector, focusing on logistics. 6. Oversight and accountability mechanisms are crucial given the cost and duration.

Value Assessment

Rating: questionable

The final award amount of $31,092,238.02 represents a substantial increase from what might be inferred as an initial estimate, though specific baseline figures are not provided. Benchmarking against similar logistics consulting contracts is difficult without more granular data on the specific services rendered and their complexity. The fixed-price redetermination structure implies that costs were not fully known at the outset, leading to potential overruns if not managed tightly. The extended duration of 2455 days (approximately 6.7 years) also raises concerns about the initial planning and the ongoing need for these services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. However, the number of bidders is not specified, which limits the ability to assess the intensity of the competition. A robust competitive environment typically drives down prices and encourages innovation. The fact that this was a delivery order under a larger contract vehicle (indicated by 'st': 'VA') might mean competition occurred at the vehicle level, with this specific order having fewer direct competitors.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it promotes a competitive marketplace, theoretically leading to better pricing and service quality. However, without knowing the number of bids received, it's hard to definitively say if taxpayers received the best possible value.

Public Impact

The Department of the Navy benefits from enhanced logistics consulting services. Services likely support the operational readiness and efficiency of naval forces. The geographic impact is primarily within the United States, supporting naval operations. Workforce implications may include specialized logistics personnel and analysts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Significant cost growth from initial estimates suggests potential underestimation of project scope or unforeseen challenges.
Extended contract duration beyond typical project timelines may indicate scope creep or inefficient execution.
The fixed-price redetermination contract type can lead to cost uncertainty and potential overruns if not meticulously managed.
Lack of detailed performance metrics in the provided data hinders a clear assessment of service effectiveness.
The nature of logistics consulting can be complex, with risks associated with supply chain disruptions and operational changes.

Positive Signals

Awarded through full and open competition, indicating a potentially broad market engagement.
The contractor, Raytheon Technical Services Company LLC, is a large, established entity with significant defense sector experience.
The contract addresses critical logistics functions for the Department of the Navy, supporting national defense objectives.
The delivery order structure suggests it was part of a pre-competed contract vehicle, potentially streamlining acquisition.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically focusing on logistics consulting. The market for defense logistics support is substantial, driven by the complex global operations of military branches. Comparable spending benchmarks are difficult to establish without knowing the precise nature of the 'remanufacture, overhaul, or repair' services for 'secrep' (likely a system or component). However, large-scale logistics and technical support contracts for the DoD often run into tens or hundreds of millions of dollars.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a primary focus for this specific contract, nor was it set aside for small businesses. This suggests that the prime contract was likely awarded to a large business, and there is no explicit information on subcontracting plans or their impact on the small business ecosystem. Larger prime contractors are often required to have subcontracting goals, but the effectiveness and fulfillment of these goals are not detailed here.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures would be tied to the terms of the fixed-price redetermination contract, requiring the contractor to justify costs and performance. Transparency is limited by the available public data; detailed performance reports, cost breakdowns, and audit findings are usually not publicly accessible. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Logistics Support Services
Naval Supply Systems Command Contracts
Professional, Scientific, and Technical Services Contracts
Defense Readiness Support Contracts

Risk Flags

Potential for cost overruns due to fixed-price redetermination structure.
Extended contract duration may indicate scope creep or planning deficiencies.
Lack of detailed performance data hinders value assessment.
Ambiguity surrounding 'secrep' and specific services requires clarification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.1 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 $31.1 million.

What is the period of performance?

Start: 2010-10-01. End: 2017-06-21.

What specific 'secrep' system or component was this contract related to, and what were the exact 'remanufacture, overhaul, or repair' services required?

The provided data abbreviates 'secrep' and does not specify the exact system or component. Similarly, the precise nature of the 'remanufacture, overhaul, or repair' services is not detailed. These services likely pertain to complex equipment or systems critical to naval operations, requiring specialized technical expertise. Without this specific information, it is challenging to fully assess the scope, complexity, and necessity of the work performed. Further investigation into contract line item details or associated documentation would be required to clarify the exact nature of the services and the 'secrep' designation.

What was the initial estimated cost or ceiling for this contract before the final award amount of $31 million was reached?

The provided data does not include the initial estimated cost or ceiling for this contract. The final award amount of $31,092,238.02 is the only cost figure available. The contract type, 'FIXED PRICE REDETERMINATION' (pt: 'FIXED PRICE REDETERMINATION'), suggests that the final price was subject to adjustment based on actual costs incurred, up to a certain point or based on specific criteria. The significant difference between an initial estimate (if one existed and was substantially lower) and the final award could indicate unforeseen challenges, scope expansion, or less effective cost control during the contract performance period. Understanding the initial baseline is crucial for assessing cost growth and value.

How many bids were received for this contract, and what was the competitive landscape like?

The contract was awarded under 'FULL AND OPEN COMPETITION' (ct: 'FULL AND OPEN COMPETITION'), indicating that the solicitation was broadly advertised, allowing any qualified vendor to submit a proposal. However, the specific number of bids received is not provided in the data. A high number of bids typically signifies robust competition, which can lead to better pricing and terms for the government. Conversely, a low number of bids might suggest limited market availability, high barriers to entry, or a lack of interest from potential competitors. Without knowing the number of bidders, it's difficult to definitively assess the strength of the competition and its impact on price discovery.

What were the key performance indicators (KPIs) for this contract, and how did the contractor perform against them?

The provided data does not include specific Key Performance Indicators (KPIs) for this contract, nor does it offer details on the contractor's performance against any established metrics. Performance assessment is critical for evaluating the value and effectiveness of contracted services. For logistics consulting related to 'remanufacture, overhaul, or repair,' KPIs might include turnaround times, quality of work, cost savings achieved, or improvements in operational efficiency. The absence of this information makes it challenging to determine if Raytheon Technical Services Company LLC met the government's expectations and delivered the intended benefits. Further review of contract performance reports or award fee documentation would be necessary.

What is the significance of the contract type 'FIXED PRICE REDETERMINATION' in terms of risk and cost certainty for the government?

A 'FIXED PRICE REDETERMINATION' (pt: 'FIXED PRICE REDETERMINATION') contract type introduces a unique risk profile. Initially, it functions like a fixed-price contract, providing some cost certainty. However, the 'redetermination' clause allows for the price to be adjusted upwards (or sometimes downwards) after the fact, based on actual costs incurred, often subject to negotiation or predefined criteria. This means the government does not have absolute cost certainty at the outset. While intended to accommodate situations where costs are difficult to estimate accurately, it places a significant burden on government oversight to ensure costs are reasonable and allowable. It shifts some of the cost risk to the government compared to a firm fixed-price contract.

How does the duration of 2455 days (approx. 6.7 years) compare to typical contracts for similar logistics consulting services?

A contract duration of 2455 days (approximately 6.7 years) is exceptionally long for a logistics consulting engagement, especially one focused on specific 'remanufacture, overhaul, or repair' services. Typical consulting projects, even complex ones, are often completed within 1-3 years. Such an extended period might suggest a long-term support requirement, a phased approach to a very large undertaking, or potentially scope creep where the project evolved significantly over time. It could also indicate ongoing operational needs that require continuous support. Without more context on the nature of the 'secrep' system and the services, it's difficult to definitively label this duration as excessive, but it warrants scrutiny regarding initial planning accuracy and ongoing necessity.

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: $31,092,238

Exercised Options: $31,092,238

Current Obligation: $31,092,238

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: M6700410D0021

IDV Type: IDC

Timeline