DoD's $156M Engineering Services Contract Awarded to Raytheon Company for Operation Certain Trust

Contract Overview

Contract Amount: $156,070,206 ($156.1M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2009-04-23

End Date: 2011-07-31

Contract Duration: 829 days

Daily Burn Rate: $188.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: Defense

Official Description: OPERATION CERTAIN TRUST/CIVILIAN ROLE PL

Place of Performance

Location: TAMPA, HILLSBOROUGH County, FLORIDA, 33621

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $156.1 million to RAYTHEON COMPANY for work described as: OPERATION CERTAIN TRUST/CIVILIAN ROLE PL Key points: 1. Contract awarded under full and open competition, suggesting a robust market for these engineering services. 2. The contract duration of 829 days indicates a significant, long-term need for the services provided. 3. Awarded as a delivery order, this likely represents a specific task within a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 4. The use of Time and Materials (T&M) pricing can sometimes lead to cost overruns if not closely managed. 5. The contractor, Raytheon Company, is a major defense contractor with extensive experience in engineering services. 6. The contract's focus on 'Civilian Role PL' suggests support for non-combatant roles or civilian infrastructure within a military operation. 7. The geographic location of Florida (FL) may indicate specific operational needs or bases in that region.

Value Assessment

Rating: fair

Benchmarking the value of this $156 million contract is challenging without knowing the specific engineering services rendered and their market rates. However, the duration of over two years suggests a substantial commitment. The Time and Materials (T&M) pricing structure warrants careful monitoring to ensure cost-effectiveness and prevent potential overruns compared to fixed-price contracts, which offer more predictable costs. Further analysis would require detailed service descriptions and comparison to similar engineering support contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple potential bidders were allowed to submit proposals. The fact that it was a delivery order suggests it might be part of a larger IDIQ vehicle, where competition could have occurred at the IDIQ level or at the delivery order level. The number of bids received (2) is on the lower side for full and open competition, which could suggest a specialized service or a limited number of qualified contractors.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages a competitive bidding process, which can drive down prices and improve the quality of services received. However, with only two bidders, the potential for significant price reduction may have been limited.

Public Impact

The primary beneficiaries are likely the Department of Defense and its personnel, who receive essential engineering support for military operations. Services delivered include critical engineering expertise for 'OPERATION CERTAIN TRUST/CIVILIAN ROLE PL', potentially supporting infrastructure, logistics, or technical systems. The geographic impact is concentrated in Florida (FL), suggesting operations or facilities located in this state. Workforce implications include the employment of engineers and technical specialists by Raytheon Company to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials (T&M) pricing can lead to cost uncertainty and potential overruns if not managed diligently.
The relatively low number of bidders (2) in a full and open competition might indicate limited market competition for these specific services.
The contract's focus on 'Civilian Role PL' within a military operation could imply complex inter-agency coordination or unique operational challenges.

Positive Signals

Awarded through full and open competition, suggesting a fair and accessible bidding process.
The contractor, Raytheon Company, is a reputable and experienced entity in the defense and engineering sectors.
The contract addresses a specific operational need ('OPERATION CERTAIN TRUST'), indicating a clear requirement for the services.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS code 541330), a significant market supporting various government and private entities. The defense industry, in particular, relies heavily on engineering services for research, development, and sustainment of complex systems. Spending in this sector is often driven by national security needs and technological advancements. Comparable spending benchmarks would typically involve analyzing other large-scale engineering support contracts awarded by the Department of Defense or other federal agencies for similar operational contexts.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the nature of the services and the prime contractor (Raytheon Company), it is possible that subcontracting opportunities may exist for small businesses, particularly in specialized engineering disciplines or support roles. However, without specific subcontracting plans or data, the direct impact on the small business ecosystem remains unclear.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within the Department of the Army. Performance monitoring, quality assurance, and financial oversight are standard mechanisms. Transparency is generally maintained through contract databases like FPDS-NG. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Engineering Services
Operation and Maintenance Contracts
Defense Logistics Support
Military Construction Support Services
Raytheon Company Contracts

Risk Flags

Potential for cost overruns due to Time and Materials pricing structure.
Limited competition (2 bidders) may have reduced price negotiation leverage.
Complexity of 'Civilian Role PL' may introduce unforeseen challenges.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $156.1 million to RAYTHEON COMPANY. OPERATION CERTAIN TRUST/CIVILIAN ROLE PL

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 $156.1 million.

What is the period of performance?

Start: 2009-04-23. End: 2011-07-31.

What specific engineering services were provided under this contract for 'OPERATION CERTAIN TRUST/CIVILIAN ROLE PL'?

The provided data does not detail the specific engineering services rendered. However, the NAICS code 541330 (Engineering Services) suggests a broad range of technical support, which could include design, analysis, testing, systems integration, or project management. The designation 'CIVILIAN ROLE PL' might imply support for civilian personnel, infrastructure, or non-military aspects of an operation, potentially involving logistical planning, facility engineering, or technical advisory roles. Without further documentation, the precise nature of the engineering tasks remains unspecified, making it difficult to assess their direct impact or necessity.

How does the $156 million contract value compare to similar engineering services contracts awarded by the DoD?

Comparing the $156 million value requires context regarding the contract's duration and scope. This contract, valued at approximately $156 million over 829 days (roughly 2.27 years), represents a significant but not extraordinary investment for large-scale engineering support within the Department of Defense. Major defense engineering contracts can range from tens of millions to billions of dollars, depending on the complexity, duration, and criticality of the services. For instance, contracts for major weapon system development or large-scale infrastructure projects often exceed this amount significantly. However, for specialized operational support like 'Civilian Role PL', this figure could represent a substantial portion of the available budget for such services.

What are the primary risks associated with a Time and Materials (T&M) contract of this magnitude?

The primary risk with a Time and Materials (T&M) contract of this $156 million magnitude is the potential for cost escalation. Unlike fixed-price contracts, T&M contracts reimburse the contractor for direct labor hours at specified hourly rates and for the actual cost of materials. This structure can incentivize longer project durations or less efficient work if not rigorously overseen. For the government, this means the final cost is not fixed upfront, making budget planning more challenging and increasing the risk of exceeding initial estimates. Effective risk mitigation requires robust oversight, detailed tracking of labor hours and material costs, and clear performance metrics to ensure value for money.

What does the limited number of bidders (2) in a full and open competition imply for price discovery and value for taxpayers?

A full and open competition with only two bidders, as seen in this $156 million contract, can limit the effectiveness of price discovery. Ideally, a larger pool of bidders would create more competitive pressure, driving down prices. With only two offers, the government may not have achieved the lowest possible price. This situation could arise if the required engineering services are highly specialized, requiring unique expertise or certifications that only a few companies possess, or if the contract's terms were perceived as less attractive by other potential bidders. For taxpayers, this means there's a higher chance that the awarded price is not the most economical, although the quality of service from the selected contractor is still a crucial factor.

How has Raytheon Company performed on similar large-scale engineering services contracts with the DoD?

Raytheon Company, now part of RTX, has a long and extensive history of performing large-scale engineering and defense-related contracts for the Department of Defense. While specific performance metrics for this particular $156 million contract are not detailed here, Raytheon is generally recognized as a major defense contractor capable of delivering complex technical solutions. Historical performance on similar contracts would typically be assessed through contract performance reports, past performance questionnaires, and any documented issues or commendations. Given their size and scope, they are accustomed to the rigorous oversight and performance expectations associated with DoD procurements. However, like any large contractor, performance can vary across different programs and contract types.

What is the historical spending trend for engineering services (NAICS 541330) by the Department of the Army?

Historical spending on engineering services (NAICS 541330) by the Department of the Army is substantial, reflecting the continuous need for technical expertise in areas such as infrastructure development, weapon systems sustainment, research and development, and operational support. While specific annual figures fluctuate based on budgetary allocations, global security environments, and modernization priorities, the Army consistently awards billions of dollars in engineering services contracts annually. This $156 million contract represents a portion of that overall spending. Trends often show increased spending during periods of active military engagement or significant technological upgrades, and may shift towards sustainment and modernization in peacetime.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering 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

Offers Received: 2

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 2603 CHALLENGER CT STE150, ORLANDO, FL, 32826

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $156,070,206

Exercised Options: $156,070,206

Current Obligation: $156,070,206

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W900KK07D0001

IDV Type: IDC

Timeline