Raytheon awarded $57.6M for rail support, raising questions about value and competition
Contract Overview
Contract Amount: $57,651,536 ($57.7M)
Contractor: Raytheon Technical Services Company LLC
Awarding Agency: Department of Defense
Start Date: 2001-09-27
End Date: 2006-09-30
Contract Duration: 1,829 days
Daily Burn Rate: $31.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: INCREMENTAL FUNDING
Place of Performance
Location: STERLING, LOUDOUN County, VIRGINIA, 20166
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $57.7 million to RAYTHEON TECHNICAL SERVICES COMPANY LLC for work described as: INCREMENTAL FUNDING Key points: 1. Contract value appears high relative to the duration and scope of services. 2. Limited public information on performance metrics makes value assessment difficult. 3. Full and open competition was utilized, but the number of bidders is not specified. 4. The contract type (Cost Plus Fixed Fee) can incentivize cost overruns. 5. Sector positioning within rail transportation support is niche. 6. Potential for cost escalation due to the contract's fee structure.
Value Assessment
Rating: fair
The contract's total value of $57.6 million over five years suggests a significant investment in rail transportation support. Benchmarking against similar contracts is challenging due to the specific nature of the services and limited public data. The Cost Plus Fixed Fee (CPFF) structure, while common, carries inherent risks of cost escalation if not closely managed, potentially impacting overall value for money.
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 offers. However, the number of bidders and the specific evaluation criteria are not publicly detailed, making it difficult to assess the intensity of the competition. A robust competitive process typically leads to better pricing and innovation.
Taxpayer Impact: While full and open competition is generally favorable for taxpayers, the lack of specific details on bidder numbers prevents a definitive assessment of whether the government secured the best possible price.
Public Impact
The Department of Defense benefits from specialized support for its rail transportation assets. Services likely include maintenance, repair, and operational support for rail infrastructure and rolling stock. Geographic impact is likely concentrated around military installations with significant rail operations. Workforce implications may involve skilled technicians and engineers specializing in rail systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee structure may lead to higher than anticipated costs.
- Lack of detailed performance metrics hinders objective value assessment.
- Limited transparency on the competitive bidding process raises concerns about price discovery.
Positive Signals
- Awarded through full and open competition, theoretically maximizing bidder pool.
- Contract duration of five years allows for sustained support and potential efficiency gains.
- Specific focus on rail support indicates a critical niche capability for the agency.
Sector Analysis
This contract falls within the broader Defense sector, specifically focusing on specialized support activities for rail transportation. The market for such niche services is likely limited to a few key contractors with the requisite expertise. Comparable spending benchmarks are difficult to establish without more granular data on the specific services provided, but overall defense spending on logistics and infrastructure support is substantial.
Small Business Impact
The data indicates that small business participation was not a stated requirement or outcome for this contract (ss: false, sb: false). This suggests that the primary award went to a large business, and there is no explicit information on subcontracting opportunities for small businesses. Further investigation would be needed to determine if any small business set-aside provisions were applied or if subcontracting plans were mandated.
Oversight & Accountability
Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. Accountability measures are usually tied to contract milestones and deliverables. Transparency is limited by the availability of public contract data; detailed performance reports and cost breakdowns are generally not publicly accessible.
Related Government Programs
- Defense Logistics Agency contracts
- Military Rail Operations
- Transportation Infrastructure Support
- Cost-Plus Contracting Vehicles
Risk Flags
- Cost Plus Fixed Fee contract type can incentivize higher spending.
- Limited public data on performance metrics makes value assessment challenging.
- Lack of detail on the number of bidders in a full and open competition.
Tags
defense, department-of-defense, raytheon-technical-services-company-llc, definitive-contract, cost-plus-fixed-fee, full-and-open-competition, support-activities-for-rail-transportation, virginia, transportation-logistics, infrastructure-support
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $57.7 million to RAYTHEON TECHNICAL SERVICES COMPANY LLC. INCREMENTAL FUNDING
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 Contract Management Agency).
What is the total obligated amount?
The obligated amount is $57.7 million.
What is the period of performance?
Start: 2001-09-27. End: 2006-09-30.
What specific rail support services were provided under this contract?
The contract specifies 'Support Activities for Rail Transportation' with the Product Service Code (PSC) 488210. While the PSC indicates a general category, the precise nature of the services is not detailed in the provided data. Typically, such contracts could encompass a range of activities including maintenance and repair of railcars and tracks, operational support for military rail yards, logistics planning for rail movements, and potentially the management of rail infrastructure on military installations. Without access to the contract's Statement of Work (SOW), a definitive list of services cannot be provided. The duration of the contract (1829 days, approximately 5 years) suggests a need for ongoing, sustained support rather than one-off projects.
How does the Cost Plus Fixed Fee (CPFF) structure impact cost control for this contract?
The Cost Plus Fixed Fee (CPFF) contract type means the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fee is fixed, the total cost is variable. This structure can incentivize contractors to incur costs, as their profit margin (the fee) remains constant regardless of the total project cost. Effective cost control relies heavily on robust government oversight, detailed cost accounting standards, and clear definitions of allowable costs. Without stringent monitoring, CPFF contracts can lead to cost overruns compared to fixed-price contracts, potentially diminishing the value for money if costs significantly exceed initial estimates.
What is the typical performance expectation for a contract of this duration and value in the defense rail support sector?
For a five-year contract valued at approximately $57.6 million in defense rail support, the expectation is for reliable and efficient provision of specialized services. This includes maintaining operational readiness of rail assets, ensuring safety compliance, and supporting logistical requirements for the Department of Defense. Performance metrics would likely focus on uptime of equipment, response times for maintenance, adherence to schedules, and cost efficiency within the CPFF framework. Given the niche nature of rail support, the contractor is expected to possess deep technical expertise and a proven track record in managing complex rail operations within a military context. The value suggests a significant scope, potentially covering multiple installations or critical transportation nodes.
Were there any significant cost underruns or overruns reported for this contract?
The provided data snippet does not contain information regarding cost underruns or overruns for this specific contract. Contracts awarded under a Cost Plus Fixed Fee (CPFF) structure are inherently susceptible to cost variations, as the contractor is reimbursed for actual costs incurred. To determine if there were significant deviations from the estimated cost, one would need to access contract performance reports, financial statements submitted by the contractor, and potentially audit reports from the Defense Contract Audit Agency (DCAA) or the Inspector General. Such detailed financial performance data is typically not made public in contract award summaries.
What is the historical spending trend for 'Support Activities for Rail Transportation' within the Department of Defense?
The provided data only pertains to a single contract awarded in 2001. To analyze historical spending trends for 'Support Activities for Rail Transportation' (PSC 488210) within the Department of Defense, a broader dataset encompassing multiple years and contracts would be necessary. This would involve querying federal procurement databases like FPDS or USASpending to aggregate spending across all relevant contracts within this category. Such an analysis could reveal patterns in spending levels, identify major contractors in this space, and highlight any significant increases or decreases in demand for these services over time. Without this broader context, it's impossible to determine if the $57.6 million awarded to Raytheon Technical Services Company LLC represents a typical, high, or low level of investment for this type of support.
Industry Classification
NAICS: Transportation and Warehousing › Support Activities for Rail Transportation › Support Activities for Rail Transportation
Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRANSPORTATION OF THINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Offers Received: 4
Pricing Type: COST PLUS FIXED FEE (U)
Contractor Details
Parent Company: Raytheon Company
Address: 12160 SUNRISE VALLEY DR, RESTON, VA, 20191
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2001-09-27
Current End Date: 2006-09-30
Potential End Date: 2006-09-30 00:00:00
Last Modified: 2024-11-22
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