Army awards Raytheon $31M for IAMD P&F A-Kit engineering support, a sole-source contract
Contract Overview
Contract Amount: $31,025,973 ($31.0M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2017-12-31
End Date: 2019-02-28
Contract Duration: 424 days
Daily Burn Rate: $73.2K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: SUPPORT OF ENGINEERING SERVICES FOR INTEGRATED AIR AND MISSILE DEFENSE (IAMD) PLUG&FIGHT (P&F) A-KIT. THIS IS TASK ORDER 0003 WITH A 12 PERIOD OF PERFORMANCE
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35806
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $31.0 million to RAYTHEON COMPANY for work described as: SUPPORT OF ENGINEERING SERVICES FOR INTEGRATED AIR AND MISSILE DEFENSE (IAMD) PLUG&FIGHT (P&F) A-KIT. THIS IS TASK ORDER 0003 WITH A 12 PERIOD OF PERFORMANCE Key points: 1. Contract awarded to Raytheon for critical Integrated Air and Missile Defense (IAMD) components. 2. Sole-source award raises questions about price discovery and potential cost efficiencies. 3. Spending on guided missile manufacturing is a significant defense sector investment. 4. The contract duration is 424 days, ending February 2019.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee (CPFF) contract type, combined with a sole-source award, makes direct pricing comparisons difficult. The awarded amount of $31,025,973 for 424 days suggests a substantial investment in specialized engineering services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Raytheon Company. Without competition, there is a reduced incentive for the contractor to offer the lowest possible price, and the government's ability to discover fair market value is limited.
Taxpayer Impact: Taxpayer funds are allocated without the benefit of competitive bidding, potentially leading to higher costs than if multiple vendors had vied for the contract.
Public Impact
Ensures continued development and support for vital missile defense systems. Supports advanced technology and engineering expertise within the defense industrial base. Potential for cost overruns due to lack of competitive pressure. Impacts national security by maintaining critical defense capabilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- CPFF contract type can incentivize cost escalation.
- Lack of transparency in pricing due to no-bid status.
Positive Signals
- Supports critical national security infrastructure.
- Leverages established expertise of a key defense contractor.
- Ensures continuity of essential engineering services.
Sector Analysis
This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a critical component of national defense spending. Benchmarks for similar specialized engineering services can vary widely based on technology complexity and contractor expertise.
Small Business Impact
The contract was awarded to Raytheon Company, a large prime contractor. There is no indication of subcontracting opportunities for small businesses within the provided data, suggesting limited direct impact on the small business sector for this specific award.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure costs are reasonable and performance meets requirements. The Department of the Army's contracting officers are responsible for validating the necessity and pricing of such awards.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Potential for limited price competition
- Lack of small business participation indicated
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, al, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $31.0 million to RAYTHEON COMPANY. SUPPORT OF ENGINEERING SERVICES FOR INTEGRATED AIR AND MISSILE DEFENSE (IAMD) PLUG&FIGHT (P&F) A-KIT. THIS IS TASK ORDER 0003 WITH A 12 PERIOD OF PERFORMANCE
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 $31.0 million.
What is the period of performance?
Start: 2017-12-31. End: 2019-02-28.
What is the justification for the sole-source award, and were alternative competitive strategies considered?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Without further documentation, it's difficult to assess the thoroughness of the government's consideration of competitive strategies. A detailed justification should outline why only Raytheon could fulfill the requirement and why competition was not feasible or advantageous.
How will the government ensure cost control and value for money under this Cost Plus Fixed Fee contract without competition?
Ensuring cost control under a CPFF contract, especially sole-source, requires robust government oversight. This includes detailed cost monitoring, performance reviews, and potentially independent cost analysis. The fixed fee provides some incentive for the contractor to control costs, but the government must actively manage the 'cost' portion to prevent overruns and ensure fair pricing.
What are the long-term implications of relying on sole-source contracts for critical defense components like the IAMD P&F A-Kit?
Long-term reliance on sole-source contracts can stifle innovation by limiting market entry for potential competitors and may lead to higher sustained costs. It can also create dependency on a single supplier, posing risks to supply chain resilience and national security if that supplier faces challenges. Diversifying the supplier base where possible is generally advisable.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing
Product/Service Code: GUIDED MISSLES
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: 401 JAN DAVIS DR NW, HUNTSVILLE, AL, 35806
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: $31,025,973
Exercised Options: $31,025,973
Current Obligation: $31,025,973
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: W31P4Q16D0020
IDV Type: IDC
Timeline
Start Date: 2017-12-31
Current End Date: 2019-02-28
Potential End Date: 2019-02-28 12:02:00
Last Modified: 2020-09-22
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