Raytheon awarded $83.6M for depot-level maintenance and repair services for Navy aircraft

Contract Overview

Contract Amount: $83,553,974 ($83.6M)

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: $34.0K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE REDETERMINATION

Sector: Defense

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 $83.6 million to RAYTHEON TECHNICAL SERVICES COMPANY LLC for work described as: REMANUFACTURE, OVERHAUL OR REPAIR SECREP Key points: 1. Contract value represents a significant investment in maintaining naval aviation readiness. 2. Competition dynamics suggest a potentially competitive bidding process for this service. 3. Contract duration of over 6 years indicates a long-term need for these services. 4. Fixed Price Redetermination pricing structure may require close monitoring for cost control. 5. Services are critical for ensuring the operational availability of Navy aircraft. 6. Geographic concentration in Virginia highlights a key hub for naval aviation support.

Value Assessment

Rating: good

The contract value of $83.6 million over approximately 6.75 years for depot-level maintenance and repair of aircraft is substantial. Benchmarking against similar large-scale aviation maintenance contracts is challenging without more specific service details. However, the fixed-price redetermination (FPR) contract type suggests an initial estimate with subsequent adjustments, which can offer value if managed effectively to control costs while ensuring quality. The absence of specific performance metrics makes a definitive value assessment difficult, but the scale implies a critical need met.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but full and open competition generally fosters a competitive environment, which can lead to better pricing and service offerings for the government. This approach aims to maximize the pool of potential contractors, thereby increasing the likelihood of selecting the most capable and cost-effective solution.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it promotes a level playing field, driving down costs through market forces and ensuring the government receives the best possible value for its investment in critical defense services.

Public Impact

Naval aviation personnel and readiness benefit from the sustained availability of well-maintained aircraft. Depot-level maintenance and repair services ensure the airworthiness and operational effectiveness of Navy aircraft fleets. The contract supports specialized technical labor and infrastructure within the defense industrial base. Geographic impact is concentrated in Virginia, a key state for naval operations and defense contracting.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Fixed Price Redetermination (FPR) contract type can lead to cost overruns if not closely managed, as prices are subject to adjustment.
Lack of specific performance metrics in the provided data makes it difficult to assess the contractor's performance quality and efficiency.
The long contract duration (over 6 years) necessitates ongoing vigilance to ensure continued value and prevent complacency.

Positive Signals

Awarded under full and open competition, suggesting a robust selection process and potential for competitive pricing.
The significant contract value indicates a critical need being met for naval aviation readiness.
The contractor, Raytheon Technical Services Company LLC, is a major defense contractor with extensive experience in similar services.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on maintenance, repair, and overhaul (MRO) services for military aircraft. The market for defense MRO is substantial, driven by the need to maintain aging fleets and ensure operational readiness. Raytheon Technical Services Company LLC operates within this competitive landscape, providing specialized technical support. Comparable spending benchmarks would typically involve analyzing other large-scale MRO contracts for military aviation platforms across different branches of the U.S. military.

Small Business Impact

The provided data indicates that small business participation (sb) was false and that this was not a small business set-aside (ss). Therefore, this contract did not directly benefit small businesses through a set-aside. However, the prime contractor, Raytheon, may engage small businesses as subcontractors for specialized components or services, contributing indirectly to the small business ecosystem within the defense supply chain. Further investigation into subcontracting plans would be needed to fully assess the impact on small businesses.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy contracting officers and program managers. The Fixed Price Redetermination (FPR) pricing structure necessitates close financial oversight to monitor costs and ensure that any redetermined prices are fair and reasonable. Transparency is generally maintained through contract reporting mechanisms, and accountability rests with the contractor to meet performance requirements and with the government to manage the contract effectively. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Aircraft Depot Maintenance
Aviation Logistics Support
Defense Contractor Services
Naval Aviation Readiness Programs
Military Aircraft Overhaul

Risk Flags

Potential for cost overruns due to FPR pricing
Lack of specific performance metrics
Long contract duration requires sustained oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $83.6 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 $83.6 million.

What is the period of performance?

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

What is the historical spending pattern for similar depot-level maintenance and repair services for Navy aircraft awarded by the Department of the Navy?

Analyzing historical spending for similar services requires access to comprehensive contract databases. However, large-scale depot maintenance contracts for naval aviation typically represent significant annual expenditures, often in the tens to hundreds of millions of dollars, depending on the aircraft type, fleet size, and scope of services. These contracts are often awarded through competitive processes, though durations and contract types can vary. Spending patterns are influenced by fleet modernization programs, aircraft age, operational tempo, and budget allocations. For instance, major platform overhauls or upgrades can lead to spikes in spending within specific categories. The $83.6 million awarded to Raytheon over approximately 6.75 years suggests a consistent, albeit not necessarily increasing, annual investment in maintaining a portion of the Navy's aircraft fleet.

How does the pricing structure (Fixed Price Redetermination) of this contract compare to other aviation maintenance contracts, and what are the implications for cost control?

The Fixed Price Redetermination (FPR) contract type is less common than firm-fixed-price (FFP) or cost-plus contracts for services like aviation maintenance. FPR involves an initial target price that is negotiated, and then the final price is determined after performance is completed, based on actual costs incurred, subject to certain limitations. This structure can be beneficial when there is uncertainty about the exact costs involved, such as in complex overhauls or repairs where unforeseen issues may arise. However, it places a greater burden on the government to meticulously audit costs and ensure the redetermined price is fair and reasonable. Compared to FFP, FPR offers more flexibility but potentially higher final costs if not managed rigorously. Compared to cost-plus, it aims to provide the contractor with an incentive to control costs while still allowing for price adjustments.

What is Raytheon Technical Services Company LLC's track record with similar Department of Defense aviation maintenance contracts?

Raytheon Technical Services Company LLC (RTSC), a subsidiary of RTX Corporation (formerly Raytheon Technologies), has a substantial track record with the Department of Defense (DoD) for providing a wide range of technical services, including aviation maintenance, logistics, and support. RTSC has historically been awarded numerous contracts for depot-level maintenance, repair, overhaul, and modification of various military aircraft platforms across different branches of the U.S. military. Their experience often includes complex systems integration, avionics upgrades, and structural repairs. While specific performance details for every contract are not publicly available, RTSC's continued success in winning large-value DoD contracts suggests a generally positive performance history and capability in meeting the demanding requirements of military aviation sustainment.

What are the key performance indicators (KPIs) typically used to measure the effectiveness of depot-level aircraft maintenance contracts for the Navy?

Key performance indicators (KPIs) for depot-level aircraft maintenance contracts typically focus on ensuring aircraft readiness, quality of work, and efficiency. Common KPIs include: Aircraft Availability Rate (percentage of aircraft ready for operational tasking), Turnaround Time (time taken to complete maintenance tasks from induction to redelivery), Mean Time Between Failures (MTBF) for repaired components, Quality Deficiency Reports (QDRs) or similar defect tracking metrics, Schedule Compliance (adherence to planned maintenance schedules), and Cost Performance (tracking actual costs against budgeted or target costs). For the Navy, maintaining high aircraft availability is paramount, so KPIs directly linked to operational readiness are heavily weighted. The effectiveness of this specific contract would be assessed against these types of metrics, though they are not detailed in the provided award data.

How does the geographic concentration of this contract in Virginia impact the local economy and defense industrial base?

The concentration of this significant $83.6 million contract in Virginia has a notable impact on the local economy and the defense industrial base within the state. Virginia is a major hub for naval aviation, with numerous bases and facilities. This contract supports specialized, high-skill jobs in areas such as aircraft mechanics, engineers, technicians, and logistics personnel. It also stimulates demand for local suppliers and support services. The presence of a large defense contractor like Raytheon, undertaking such a substantial project, reinforces Virginia's position as a critical center for defense readiness and technological expertise. This can lead to further investment in infrastructure and workforce development, creating a positive feedback loop for the regional defense ecosystem.

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: $83,553,974

Exercised Options: $83,553,974

Current Obligation: $83,553,974

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: M6700410D0021

IDV Type: IDC

Timeline