Raytheon's $66M contract for COBRA DANE technical services awarded by DoD, spanning over 4 years
Contract Overview
Contract Amount: $65,945,890 ($65.9M)
Contractor: Raytheon Technical Services Company LLC
Awarding Agency: Department of Defense
Start Date: 2011-04-01
End Date: 2015-12-31
Contract Duration: 1,735 days
Daily Burn Rate: $38.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST NO FEE
Sector: Defense
Official Description: COBRA DANE TECHNICAL SERVICES
Place of Performance
Location: STERLING, LOUDOUN County, VIRGINIA, 20166
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $65.9 million to RAYTHEON TECHNICAL SERVICES COMPANY LLC for work described as: COBRA DANE TECHNICAL SERVICES Key points: 1. Contract value appears reasonable given the duration and specialized nature of engineering services. 2. Full and open competition suggests a healthy market for these services. 3. Potential risks include contractor performance and adherence to cost controls. 4. This contract supports critical defense infrastructure, aligning with national security objectives. 5. The engineering services sector is highly competitive, with established players like Raytheon. 6. Contract type (Cost No Fee) implies significant government oversight on costs.
Value Assessment
Rating: good
The contract value of approximately $66 million over 1735 days (roughly 4.75 years) averages to about $13.9 million annually. This figure seems within a reasonable range for complex technical services supporting a significant defense system like COBRA DANE. Benchmarking against similar large-scale engineering support contracts for specialized defense systems would provide a more precise value assessment, but initial indications suggest fair pricing for the scope of work.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The presence of two bids suggests a competitive environment, though the exact number of interested parties is not detailed. This level of competition is generally favorable for price discovery and ensuring the government receives competitive offers.
Taxpayer Impact: Full and open competition typically leads to better pricing for taxpayers by fostering a competitive bidding process.
Public Impact
The primary beneficiaries are the Department of Defense, ensuring the operational readiness of critical radar systems. Services delivered include essential technical support, maintenance, and sustainment for the COBRA DANE radar. Geographic impact is likely concentrated around the operational sites of the COBRA DANE system. Workforce implications include employment for highly skilled engineers and technical specialists.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns given the Cost No Fee contract type, requiring diligent oversight.
- Dependence on a single contractor for critical technical services could pose a risk if performance falters.
- Ensuring continued technological relevance and upgrades for the COBRA DANE system throughout the contract period.
Positive Signals
- Awarded through full and open competition, suggesting a robust market and competitive pricing.
- Contractor (Raytheon) is a well-established defense contractor with significant experience.
- Contract duration provides stability for essential technical support services.
Sector Analysis
The engineering services sector is a vital component of the defense industrial base, providing specialized expertise for complex weapon systems. This contract falls within the broader category of defense engineering and technical services, a market characterized by high barriers to entry due to specialized knowledge and security requirements. Spending in this area is substantial, driven by the need to maintain and upgrade sophisticated military assets.
Small Business Impact
The contract was not set aside for small businesses, and there is no explicit indication of subcontracting requirements for small businesses in the provided data. This suggests that the primary award went to a large prime contractor, and the direct impact on the small business ecosystem may be limited unless Raytheon actively engages small businesses for subcontracting opportunities.
Oversight & Accountability
The Cost No Fee (CNF) contract type necessitates rigorous oversight from the Department of Defense to monitor contractor performance, costs, and adherence to contract terms. Accountability measures would involve regular performance reviews, audits, and potentially milestone-based payments if applicable. Transparency is generally maintained through contract award databases and reporting requirements, though specific operational details may be sensitive.
Related Government Programs
- Ballistic Missile Defense Systems
- Radar Systems Support
- Aerospace Engineering Services
- Defense Intelligence Support
- North American Aerospace Defense Command (NORAD) Support
Risk Flags
- Cost Control Risk (CNF Contract Type)
- Contractor Performance Dependency
- Technological Obsolescence
- Limited Competition (2 Bidders)
Tags
defense, engineering-services, raytheon-technical-services-company-llc, department-of-defense, cost-no-fee, definitive-contract, full-and-open-competition, virginia, large-contract, radar-systems, technical-support
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $65.9 million to RAYTHEON TECHNICAL SERVICES COMPANY LLC. COBRA DANE TECHNICAL SERVICES
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 $65.9 million.
What is the period of performance?
Start: 2011-04-01. End: 2015-12-31.
What is the historical spending trend for COBRA DANE technical services?
Historical spending data for COBRA DANE technical services prior to this contract award would provide valuable context. Analyzing previous contract values, durations, and contractor performance can reveal trends in cost escalation, service scope changes, and the stability of support requirements. Without specific historical data, it's difficult to definitively assess if the $66 million over approximately 4.75 years represents an increase, decrease, or consistent level of investment in maintaining this critical radar system. Understanding past spending patterns is crucial for forecasting future needs and budgeting effectively.
How does Raytheon Technical Services Company LLC's performance on similar contracts compare?
Raytheon Technical Services Company LLC (RTSC) is a major defense contractor with a broad portfolio. Assessing RTSC's performance on comparable large-scale engineering and technical support contracts, particularly those involving complex radar systems or defense infrastructure, is essential. Key performance indicators to examine would include on-time delivery, adherence to budget (especially for cost-reimbursable contracts), quality of service, and any past performance issues or commendations. A strong track record on similar, complex programs would increase confidence in their ability to successfully execute the COBRA DANE contract.
What are the primary risks associated with the Cost No Fee (CNF) contract type for this service?
The Cost No Fee (CNF) contract type, while offering flexibility, carries specific risks. For the government, the primary risk is that the contractor may not be adequately incentivized to control costs, as their profit is fixed regardless of the actual costs incurred. This can lead to potential cost overruns if not managed diligently. For the contractor, the risk lies in underestimating the costs required to perform the work, potentially leading to reduced profit margins or even losses if actual expenses exceed projections. Effective oversight, clear performance metrics, and robust cost tracking are critical to mitigate these risks.
What is the strategic importance of the COBRA DANE system and its technical support?
The COBRA DANE system is a large, phased-array radar operated by the U.S. Space Force, primarily used for tracking objects in Earth orbit, including space debris and satellites. Its technical support is strategically vital for maintaining U.S. space situational awareness (SSA), which is critical for national security, missile warning, and space control. Ensuring the continuous operation and reliability of COBRA DANE through expert technical services directly supports these overarching defense and intelligence missions, safeguarding U.S. assets and providing crucial data for decision-making.
How does the competition level (2 bidders) impact price discovery and value for money?
Having two bidders in a full and open competition suggests a degree of market competition, but it is less robust than if there were numerous bidders. With only two offers, the government has less leverage to drive down prices compared to a scenario with, for example, five or more competing proposals. While two bidders are better than one, it raises questions about whether the full potential for price discovery was realized. The government must carefully evaluate the proposals to ensure the selected price represents good value for money, potentially through detailed cost analysis and negotiation, rather than relying solely on the competitive pressure from just two firms.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: FA702210R0025
Offers Received: 2
Pricing Type: COST NO FEE (S)
Evaluated Preference: NONE
Contractor Details
Parent Company: Raytheon Company (UEI: 001339159)
Address: 22265 PACIFIC BLVD, STERLING, VA, 20166
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: $71,199,667
Exercised Options: $71,199,667
Current Obligation: $65,945,890
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2011-04-01
Current End Date: 2015-12-31
Potential End Date: 2015-12-31 00:00:00
Last Modified: 2016-10-27
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