Department of Transportation awards $132M+ to Raytheon Company for engineering services over 9 years

Contract Overview

Contract Amount: $132,228,565 ($132.2M)

Contractor: Raytheon Company

Awarding Agency: Department of Transportation

Start Date: 2012-10-25

End Date: 2021-09-30

Contract Duration: 3,262 days

Daily Burn Rate: $40.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: TAMR3 SEGMENT 1 FUNDING TO RAYTHEON IGF::CL::IGF

Place of Performance

Location: MARLBOROUGH, MIDDLESEX County, MASSACHUSETTS, 01752

State: Massachusetts Government Spending

Plain-Language Summary

Department of Transportation obligated $132.2 million to RAYTHEON COMPANY for work described as: TAMR3 SEGMENT 1 FUNDING TO RAYTHEON IGF::CL::IGF Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract spans nearly a decade, indicating a long-term need for these engineering services. 3. Fixed-price contract type may offer cost certainty for the government. 4. Services provided under NAICS code 541330 (Engineering Services). 5. Contract awarded as a delivery order under a larger contract vehicle. 6. The contractor, Raytheon Company, is a major defense and aerospace firm. 7. Geographic location of performance is Massachusetts.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific service details and comparable contract data. The firm fixed-price nature provides some cost predictability. However, the duration of nearly nine years means that the initial pricing may not reflect current market conditions or technological advancements. Further analysis would require understanding the specific engineering tasks performed and comparing their costs to similar services procured by the government or in the private sector.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This suggests a robust bidding environment, which typically leads to better price discovery and potentially more competitive pricing for the government. The number of bidders is not specified, but the competition type implies multiple offers were likely considered.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a market that drives down prices and encourages innovation, leading to better value for public funds.

Public Impact

The Department of Transportation benefits from specialized engineering expertise to support its operations. Services likely contribute to the maintenance, improvement, or development of transportation infrastructure or systems. The primary geographic impact is in Massachusetts, where the services are performed. The contract supports jobs within Raytheon Company and potentially its subcontractors in the engineering sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to cost inefficiencies if market conditions change significantly.
Lack of specific performance metrics makes it difficult to assess the effectiveness of the engineering services.
Reliance on a single large contractor for a long period might limit opportunities for smaller, specialized firms.

Positive Signals

Awarded through full and open competition, indicating a competitive process.
Firm fixed-price contract type provides cost certainty.
Contractor is a well-established entity with significant experience in complex engineering projects.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a critical component of the broader professional, scientific, and technical services industry. This sector supports a wide range of government and private sector activities, including infrastructure development, defense systems, and technological innovation. The market for engineering services is competitive, with numerous firms ranging from large conglomerates like Raytheon to smaller specialized consultancies. Government spending in this area is substantial, reflecting the ongoing need for technical expertise in complex projects.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). As a large contract awarded to a major corporation, it is unlikely to have significant direct subcontracting opportunities for small businesses unless specified within the contract's terms. The primary impact is on the large prime contractor, with potential indirect benefits to the small business ecosystem if Raytheon sources materials or services from smaller suppliers.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program officials within the Department of Transportation's Federal Aviation Administration. The firm fixed-price nature of the contract provides a degree of financial oversight. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Transportation Engineering Services Contracts
Federal Aviation Administration Procurement
Raytheon Company Contracts
Engineering Services (NAICS 541330)
Long-Term Government Service Contracts

Risk Flags

Long contract duration may not reflect current market pricing.
Specific scope of engineering services not detailed.
Potential for cost overruns or underperformance over extended period.
Limited information on number of bidders.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $132.2 million to RAYTHEON COMPANY. TAMR3 SEGMENT 1 FUNDING TO RAYTHEON IGF::CL::IGF

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $132.2 million.

What is the period of performance?

Start: 2012-10-25. End: 2021-09-30.

What specific engineering services were provided under this contract?

The provided data identifies the contract as being for 'Engineering Services' under NAICS code 541330. However, it does not detail the specific nature of these services. Given the awarding agency is the Department of Transportation (specifically the Federal Aviation Administration), the services could range from technical consulting for air traffic control systems, infrastructure design and analysis for airports, research and development in aviation technology, to support for regulatory compliance. Without more granular information, the exact scope of work remains unspecified, making it difficult to assess the precise value or impact of the services rendered.

How does the $132 million award compare to similar engineering service contracts procured by the FAA or DOT?

Comparing this $132 million contract to similar ones requires access to a broader dataset of FAA and DOT procurements for engineering services. However, as a contract spanning nearly nine years (October 2012 to September 2021) and awarded via full and open competition, it represents a significant, long-term investment. Large engineering service contracts for major federal agencies often run into tens or hundreds of millions of dollars, especially when they involve complex systems or infrastructure. The firm fixed-price nature suggests a defined scope, but the total value over such a long period necessitates careful monitoring to ensure continued cost-effectiveness against evolving market rates and project needs.

What are the key risks associated with a nearly decade-long firm fixed-price contract for engineering services?

A primary risk with a long-duration firm fixed-price contract is potential cost escalation for the contractor if market conditions, labor costs, or material prices increase significantly over the contract period. Conversely, the government risks paying above market rates if prices decrease or if the initial estimates were too high. Scope creep, where the requirements evolve beyond the original agreement, can also be a risk, potentially leading to disputes or the need for costly modifications. Furthermore, technological obsolescence is a concern; engineering solutions developed early in the contract might be outdated by its end. Finally, maintaining contractor performance and engagement over such an extended period requires robust oversight.

What is Raytheon Company's track record with the Department of Transportation and the Federal Aviation Administration?

Raytheon Company, now part of RTX, has a substantial history of contracting with various U.S. federal agencies, including the Department of Defense and NASA, for complex engineering, technology, and defense systems. While specific details of their past performance with the Department of Transportation (DOT) and the Federal Aviation Administration (FAA) are not provided in this data snippet, their extensive experience in large-scale, high-technology projects suggests a capacity to handle significant government contracts. A thorough review would involve examining their past performance ratings, any past disputes or contract terminations, and the overall value and duration of their previous work with the DOT/FAA to fully assess their track record.

How has federal spending on engineering services (NAICS 541330) trended over the period of this contract (2012-2021)?

Federal spending on engineering services (NAICS 541330) generally remained robust throughout the 2012-2021 period, reflecting ongoing needs in infrastructure, defense, and technology. While specific year-over-year trends can fluctuate based on budget appropriations and national priorities, the overall demand for engineering expertise from government agencies like the DOT remained consistent. Factors such as infrastructure investment initiatives, modernization of defense systems, and advancements in areas like cybersecurity and aerospace likely contributed to sustained or increasing spending. This contract's duration aligns with a period where federal agencies continued to rely heavily on external engineering expertise for complex projects.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1801 W HUGHES DR, FULLERTON, CA, 92833

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $132,228,565

Exercised Options: $132,228,565

Current Obligation: $132,228,565

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DTFA0196C03008B

IDV Type: IDC

Timeline