Raytheon's $161.8M WAAS Follow-On Contract Awarded by FAA Under Sole-Source Basis

Contract Overview

Contract Amount: $161,847,650 ($161.8M)

Contractor: Raytheon Company

Awarding Agency: Department of Transportation

Start Date: 2008-09-25

End Date: 2016-08-19

Contract Duration: 2,885 days

Daily Burn Rate: $56.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Transportation

Official Description: WIDE AREA AUGMENTATION SYSTEM (WAAS) FOLLOW-ON CONTRACT

Place of Performance

Location: MARLBOROUGH, MIDDLESEX County, MASSACHUSETTS, 01752

State: Massachusetts Government Spending

Plain-Language Summary

Department of Transportation obligated $161.8 million to RAYTHEON COMPANY for work described as: WIDE AREA AUGMENTATION SYSTEM (WAAS) FOLLOW-ON CONTRACT Key points: 1. The contract for the Wide Area Augmentation System (WAAS) follow-on was awarded to Raytheon Company. 2. This contract was not competed, indicating a sole-source award. 3. The total value of the contract is $161,847,649.93. 4. The contract period spans from September 25, 2008, to August 19, 2016. 5. The procurement falls under the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' NAICS code.

Value Assessment

Rating: questionable

Pricing for this sole-source contract is difficult to assess without competitive benchmarks. The Cost Plus Fixed Fee (CPFF) structure can lead to cost overruns if not managed carefully, potentially impacting overall value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, which limits price discovery and potentially leads to higher costs for taxpayers. The rationale for a sole-source award needs further justification to ensure fair pricing.

Taxpayer Impact: The lack of competition in this sole-source award may result in higher costs for taxpayers compared to a competitively bid contract.

Public Impact

Ensures continued operation and enhancement of the WAAS, a critical component of the National Airspace System. Supports air traffic safety and efficiency by providing precise navigation and guidance for aircraft. Impacts airlines, pilots, and passengers through reliable navigation services. The sole-source nature raises questions about cost-effectiveness and potential missed savings.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Positive Signals

Sector Analysis

The Federal Aviation Administration (FAA) operates within the Transportation sector, which often involves complex, high-value procurements for infrastructure and systems. Spending benchmarks for navigation systems vary widely based on technology and scope.

Small Business Impact

There is no indication that small businesses were involved in this specific contract award. The prime contractor, Raytheon Company, is a large aerospace and defense firm.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure the government is receiving fair value and that the contractor is meeting all performance requirements. Audits of costs would be prudent.

Related Government Programs

Risk Flags

Tags

search-detection-navigation-guidance-aer, department-of-transportation, ma, definitive-contract, 100m-plus

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $161.8 million to RAYTHEON COMPANY. WIDE AREA AUGMENTATION SYSTEM (WAAS) FOLLOW-ON CONTRACT

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 $161.8 million.

What is the period of performance?

Start: 2008-09-25. End: 2016-08-19.

What was the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?

The justification for a sole-source award typically centers on unique capabilities, proprietary technology, or the absence of adequate competition. For the WAAS follow-on, the rationale might stem from Raytheon's existing role in the system's development or specific technical requirements that only they could meet. Without detailed documentation, it's difficult to ascertain the precise reasoning, but it's a critical factor in evaluating the procurement's fairness and efficiency.

How does the Cost Plus Fixed Fee (CPFF) contract structure impact the risk of cost overruns for this specific system?

The CPFF structure shares cost risk between the government and the contractor. While the fixed fee provides an incentive for the contractor to control costs, the government bears the majority of the cost risk. If unforeseen technical challenges or scope changes arise during the WAAS follow-on, the total contract cost could escalate significantly beyond initial projections, impacting the overall value for taxpayers.

What is the long-term strategic value of the WAAS system and how does this contract contribute to it?

The WAAS is a crucial component of the U.S. air traffic management system, enhancing GPS accuracy and integrity for aviation. This follow-on contract ensures the continued operation, maintenance, and potential upgrades of the system, thereby maintaining safety and efficiency in the National Airspace System. Its long-term value lies in providing reliable, precise navigation, reducing reliance on ground-based systems, and supporting future air traffic modernization efforts.

Industry Classification

NAICS: ManufacturingNavigational, Measuring, Electromedical, and Control Instruments ManufacturingSearch, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: WA0806670

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 1801 HUGHES DR, FULLERTON, CA, 92833

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

Financial Breakdown

Contract Ceiling: $1,426,880,324

Exercised Options: $168,621,349

Current Obligation: $161,847,650

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline

Start Date: 2008-09-25

Current End Date: 2016-08-19

Potential End Date: 2020-08-11 00:00:00

Last Modified: 2025-04-01

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