Raytheon Technical Services Company LLC awarded $43.3M contract for sustainment services by Defense Threat Reduction Agency
Contract Overview
Contract Amount: $43,343,107 ($43.3M)
Contractor: Raytheon Technical Services Company LLC
Awarding Agency: Department of Defense
Start Date: 2010-09-22
End Date: 2012-09-05
Contract Duration: 714 days
Daily Burn Rate: $60.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: SUSTAINMENT
Plain-Language Summary
Department of Defense obligated $43.3 million to RAYTHEON TECHNICAL SERVICES COMPANY LLC for work described as: SUSTAINMENT Key points: 1. Contract value of $43.3M for sustainment services indicates a significant investment in maintaining operational capabilities. 2. The contract was awarded under full and open competition, suggesting a competitive bidding process. 3. The Cost Plus Fixed Fee (CPFF) pricing structure may present cost control challenges if not closely monitored. 4. A duration of 714 days (approximately 2 years) suggests a medium-term commitment to these services. 5. The North American Industry Classification System (NAICS) code 541990 covers 'All Other Professional, Scientific, and Technical Services,' indicating a broad scope of work. 6. The award was a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar framework.
Value Assessment
Rating: fair
The contract value of $43.3 million for sustainment services over approximately two years requires careful benchmarking against similar contracts. Without specific details on the scope of 'sustainment,' it's difficult to definitively assess value for money. The CPFF contract type can lead to cost overruns if not managed diligently, potentially impacting the overall value. However, the competitive award process may have helped secure a reasonable price point.
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 presence of 3 bidders suggests a moderate level of competition for this specific award. While competition is generally positive, the number of bidders could be higher for a contract of this value, potentially impacting price discovery.
Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple companies to bid, driving down prices and potentially leading to better value. A moderate number of bidders, however, means there's room for even greater cost savings through increased competition.
Public Impact
The primary beneficiaries are likely the Department of Defense and specifically the Defense Threat Reduction Agency, ensuring the continued operational readiness of critical assets. Services delivered under this contract are related to sustainment, which could encompass maintenance, repair, technical support, and logistics for specialized equipment or systems. The geographic impact is likely focused on areas where the supported assets are deployed or operated by the Defense Threat Reduction Agency. Workforce implications may include the employment of technical specialists, engineers, and support personnel by the contractor to fulfill the sustainment requirements.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee (CPFF) contract type can incentivize contractor spending without direct correlation to efficiency, potentially leading to higher costs than fixed-price contracts.
- The broad NAICS code 'All Other Professional, Scientific, and Technical Services' might indicate a scope that is not precisely defined, increasing the risk of scope creep or unforeseen costs.
- Limited information on the specific sustainment activities makes it challenging to assess the contractor's performance benchmarks or potential risks associated with the service delivery.
Positive Signals
- Awarded under full and open competition, suggesting a robust process that allowed multiple vendors to compete, potentially leading to better pricing and service.
- The Defense Threat Reduction Agency is a specialized entity within the DoD, implying the contract supports critical national security missions, indicating a high level of importance.
- The contractor, Raytheon Technical Services Company LLC, is a known entity in the defense sector, suggesting a level of experience and capability in providing technical services.
Sector Analysis
The defense sustainment sector is a critical component of the broader aerospace and defense industry, focusing on maintaining the operational readiness of military platforms and systems. This contract falls within professional, scientific, and technical services, a segment that supports various defense functions. Spending in this area is substantial, driven by the need to keep complex military assets functional throughout their lifecycle. Comparable spending benchmarks would typically involve analyzing other sustainment contracts for similar types of equipment or services within the DoD.
Small Business Impact
This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal, with opportunities primarily flowing to the prime contractor and its larger supply chain partners.
Oversight & Accountability
Oversight for this contract would typically be managed by the Defense Threat Reduction Agency's contracting officers and program managers. Accountability measures are inherent in the CPFF contract structure, requiring the contractor to justify costs and demonstrate progress towards fixed-fee milestones. Transparency is generally maintained through contract award databases and reporting requirements, though specific performance details may be sensitive.
Related Government Programs
- Defense Logistics Agency (DLA) Sustainment Contracts
- DoD Maintenance, Repair, and Overhaul (MRO) Services
- Missile Defense Agency (MDA) Support Contracts
- Air Force Sustainment Center Contracts
Risk Flags
- Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
- Broad NAICS code may indicate potential for scope creep.
- Moderate competition level (3 bidders) could imply missed opportunities for greater cost savings.
Tags
defense, sustainment, raytheon-technical-services-company-llc, department-of-defense, defense-threat-reduction-agency, professional-scientific-and-technical-services, cost-plus-fixed-fee, full-and-open-competition, delivery-order, medium-value, us-federal-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $43.3 million to RAYTHEON TECHNICAL SERVICES COMPANY LLC. SUSTAINMENT
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 (Defense Threat Reduction Agency).
What is the total obligated amount?
The obligated amount is $43.3 million.
What is the period of performance?
Start: 2010-09-22. End: 2012-09-05.
What specific sustainment activities are covered under this contract?
The contract falls under NAICS code 541990, 'All Other Professional, Scientific, and Technical Services,' and is for 'SUSTAINMENT.' Without further details, 'sustainment' in a defense context typically refers to activities that ensure the continued operational effectiveness of systems, platforms, or equipment. This can include a wide range of services such as scheduled and unscheduled maintenance, repair and overhaul, logistics support, technical data management, engineering support for obsolescence or upgrades, and potentially training. The specific nature of the assets being sustained by the Defense Threat Reduction Agency would dictate the precise scope, which could range from complex weapon systems to specialized IT infrastructure or testing equipment.
How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types for sustainment services?
Cost Plus Fixed Fee (CPFF) contracts are common in defense for services where the scope is not precisely defined or is expected to evolve, such as research and development or complex sustainment. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This differs from fixed-price contracts, where the price is set regardless of the final cost, incentivizing efficiency. While CPFF offers flexibility, it places a greater burden on the government to meticulously monitor costs and ensure they are reasonable and allocable. For sustainment, if the scope is well-defined, a fixed-price or firm-fixed-price contract might offer better cost control for the government. However, for highly specialized or evolving sustainment needs, CPFF can be appropriate if managed with strong oversight.
What is the typical performance period for sustainment contracts of this value?
A contract duration of 714 days, approximately 1.95 years, for a $43.3 million sustainment contract is within a common range for medium-term service agreements in the defense sector. Sustainment needs can vary significantly; some may be short-term, addressing immediate readiness gaps, while others are long-term, spanning many years, especially for major weapon systems. Contracts can be structured as base periods with option years, allowing flexibility. For a CPFF contract of this magnitude, a period of around two years allows sufficient time for the contractor to establish operations, perform services, and for the agency to assess performance before potentially extending or re-competing. Longer-term sustainment might be structured under IDIQ vehicles with individual delivery orders.
What does the number of bidders (3) suggest about competition for this specific sustainment requirement?
An award resulting from a full and open competition with three bidders suggests a moderate level of competition. While three bidders are better than one or two, it may not represent the maximum potential competition for a contract valued at $43.3 million. The ideal number of bidders can vary depending on the specificity of the requirement, the market size for those specialized services, and the barriers to entry. For highly specialized technical services like defense sustainment, three bidders could indicate a healthy, albeit not saturated, market. It implies that the requirement was likely well-defined enough to attract multiple capable firms, but perhaps not so common as to draw a dozen or more competitors.
What are the potential risks associated with Raytheon Technical Services Company LLC's track record in similar contracts?
Raytheon Technical Services Company LLC (RTSC), now part of RTX, has a long history of performing complex technical and sustainment services for the Department of Defense and other government agencies. Assessing their track record would involve reviewing past performance evaluations (e.g., CPARS reports) for similar sustainment contracts. Potential risks could include cost overruns, schedule delays, or performance deficiencies, particularly on CPFF contracts if oversight is lacking. However, RTSC's extensive experience also suggests a strong understanding of defense requirements and established processes for managing such contracts. A thorough review would look for patterns of issues on prior contracts and compare them to the specific requirements and risks of this DTRA sustainment award.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: DTRA0101R0015
Offers Received: 3
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Raytheon Company
Address: 22265 PACIFIC BLVD, STERLING, VA, 20166
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $46,747,419
Exercised Options: $46,747,419
Current Obligation: $43,343,107
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: DTRA0101D0013
IDV Type: IDC
Timeline
Start Date: 2010-09-22
Current End Date: 2012-09-05
Potential End Date: 2012-09-05 00:00:00
Last Modified: 2024-11-22
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