DoD's $196M PNVC Integrator Contract Awarded to Raytheon Company

Contract Overview

Contract Amount: $196,412,360 ($196.4M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2019-11-15

End Date: 2026-08-31

Contract Duration: 2,481 days

Daily Burn Rate: $79.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: PRESIDENTIAL AND NATIONAL VOICE CONFERENCING (PNVC) INTEGRATOR

Place of Performance

Location: SEMINOLE, PINELLAS County, FLORIDA, 33777

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $196.4 million to RAYTHEON COMPANY for work described as: PRESIDENTIAL AND NATIONAL VOICE CONFERENCING (PNVC) INTEGRATOR Key points: 1. Significant contract value of $196.4M for voice conferencing. 2. Awarded to Raytheon Company, a major defense contractor. 3. Contract duration is over 6 years, ending in August 2026. 4. No small business participation indicated. 5. Sector is IT/Communications, with a focus on broadcasting equipment.

Value Assessment

Rating: fair

The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. The fixed fee component provides some cost control, but the overall value is substantial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive process.

Taxpayer Impact: The lack of competition for a nearly $200M contract raises concerns about potential overspending and suboptimal value for taxpayer funds.

Public Impact

Taxpayers may be paying a premium due to the sole-source nature of the award. The long duration of the contract limits opportunities for future cost savings through re-competition. Lack of small business involvement means potential missed opportunities for innovation and economic inclusion.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost Plus Fixed Fee contract type
No small business participation

Positive Signals

Award to established contractor
Long-term solution for critical communication needs

Sector Analysis

The IT and Communications sector, particularly for defense applications, often involves complex systems and specialized equipment. Spending benchmarks for similar integrated voice conferencing systems can vary widely based on scope and technology.

Small Business Impact

The contract explicitly states no small business participation (sb: false). This suggests that the prime contractor, Raytheon, is handling the entire scope of work, potentially missing out on specialized capabilities or cost efficiencies that small businesses could offer.

Oversight & Accountability

The sole-source nature of this large contract warrants close oversight to ensure cost controls are effective and the government is receiving fair value. Regular performance reviews and audits are crucial.

Related Government Programs

Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Sole-source award limits competition and potentially increases cost.
Cost Plus Fixed Fee contract type carries inherent risk of cost overruns.
No small business participation noted.
Long contract duration (over 6 years) may reduce flexibility and future cost-saving opportunities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $196.4 million to RAYTHEON COMPANY. PRESIDENTIAL AND NATIONAL VOICE CONFERENCING (PNVC) INTEGRATOR

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 Air Force).

What is the total obligated amount?

The obligated amount is $196.4 million.

What is the period of performance?

Start: 2019-11-15. End: 2026-08-31.

What justification was provided for the sole-source award, and how does it align with federal procurement regulations for non-competitive contracts?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source awards require a compelling reason, such as unique capabilities, urgent need, or lack of market availability. Federal regulations (like FAR Part 6) outline strict criteria for non-competitive contracting, and the agency must demonstrate that competition is not feasible or not in the government's best interest.

How does the Cost Plus Fixed Fee structure impact the government's ability to control costs over the contract's multi-year duration?

The Cost Plus Fixed Fee (CPFF) structure aims to control costs by adding a fixed fee to the allowable costs. While the fee is fixed, the allowable costs can still fluctuate. Effective oversight is critical to ensure only necessary and reasonable costs are incurred. The government must diligently monitor expenditures and performance to prevent cost overruns and ensure the fixed fee remains appropriate for the work performed.

What are the potential risks associated with awarding a nearly $200 million contract without competition to a single large prime contractor?

The primary risk is the potential for inflated costs due to the absence of competitive pressure, leading to reduced value for taxpayer money. Other risks include vendor lock-in, reduced innovation if the prime doesn't actively seek external solutions, and a lack of flexibility if requirements change significantly. Furthermore, the absence of small business participation limits the potential for diverse solutions and economic benefits.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 7887 BRYAN DAIRY RD, LARGO, FL, 33777

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: $199,395,462

Exercised Options: $198,861,474

Current Obligation: $196,412,360

Actual Outlays: $3,836,377

Subaward Activity

Number of Subawards: 43

Total Subaward Amount: $15,747,469

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline