DoD Awards Raytheon Company $522M Contract for Texas-Based Services
Contract Overview
Contract Amount: $522,391,377 ($522.4M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2000-01-28
End Date: 2008-12-31
Contract Duration: 3,260 days
Daily Burn Rate: $160.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Place of Performance
Location: MCKINNEY, COLLIN County, TEXAS, 75071
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $522.4 million to RAYTHEON COMPANY for work described as: Key points: 1. Significant contract value of over $522 million awarded to a major defense contractor. 2. Raytheon Company is a dominant player in the defense sector, indicating potential for limited competition. 3. The contract spans nearly nine years, suggesting a long-term commitment and potential for evolving needs. 4. Firm Fixed Price contract type aims to control costs, but scope creep could be a risk.
Value Assessment
Rating: fair
The contract value of $522 million over almost nine years is substantial. Benchmarking against similar long-term service contracts for defense agencies is difficult without more specific service details. However, the duration and scale suggest a significant investment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is positive for price discovery. However, the long duration and specialized nature of defense services may still limit the number of truly competitive bids.
Taxpayer Impact: Full and open competition is intended to secure the best value for taxpayers. The long-term nature of the contract means taxpayers are committed to this vendor for an extended period.
Public Impact
Taxpayers are funding a significant portion of the defense budget through this contract. The services provided likely support critical military operations and readiness. The long-term nature of the contract impacts budget predictability for the Department of Defense.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration may lead to price escalation or outdated technology.
- Potential for scope creep given the extended period and evolving defense needs.
- Reliance on a single large contractor could reduce future competitive options.
Positive Signals
- Firm Fixed Price contract aims to provide cost certainty.
- Full and open competition was utilized, suggesting an effort to obtain competitive pricing.
- Contract awarded to a well-established defense contractor with a track record.
Sector Analysis
This contract falls within the defense sector, a major area of federal spending. Benchmarks for similar long-term service contracts are highly variable depending on the specific services rendered, but a value of this magnitude is significant.
Small Business Impact
The data indicates this contract was not awarded to small businesses, as both 'ss' and 'sb' are false. This suggests the services required were likely beyond the capacity or specialization of small businesses, or the competition structure favored larger entities.
Oversight & Accountability
The contract was awarded under full and open competition, implying a structured procurement process. Oversight would be crucial to manage the long duration, ensure performance, and control costs throughout the contract's life.
Related Government Programs
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Long contract duration (nearly 9 years) increases risk of obsolescence and price changes.
- Lack of specific service details hinders a thorough value assessment.
- Potential for contractor lock-in due to the extended commitment.
- No indication of small business participation.
Tags
department-of-defense, tx, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $522.4 million to RAYTHEON COMPANY. See the official description on USAspending.
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 $522.4 million.
What is the period of performance?
Start: 2000-01-28. End: 2008-12-31.
What specific services are being procured under this contract, and how do they align with current defense priorities?
The specific services are not detailed in the provided data. Understanding the nature of the services is crucial for assessing their alignment with current defense priorities and determining if the $522 million investment is strategically sound. Without this information, it's difficult to evaluate the true value and necessity of the contract beyond its financial scale.
What were the key factors that led to a full and open competition, and were there any challenges in attracting a diverse range of bidders?
Full and open competition suggests the agency sought the widest possible participation. Challenges might include the specialized nature of the services, stringent security requirements, or the long-term commitment, which could deter some potential bidders. The agency's outreach efforts and evaluation criteria would be key to understanding the competitive landscape.
How will the performance and cost-effectiveness of these services be monitored over the nearly nine-year contract duration?
Effective oversight mechanisms are critical for long-term contracts. This would involve regular performance reviews, milestone tracking, and potentially independent cost audits. The Department of Defense likely has established protocols for monitoring contractor performance and ensuring adherence to the firm fixed price terms to prevent cost overruns and ensure value.
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Contractor Details
Address: 2501 W UNIVERSITY DRIVE M, MC KINNEY, TX, 03
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2000-01-28
Current End Date: 2008-12-31
Potential End Date: 2008-12-31 00:00:00
Last Modified: 2008-12-19
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