Raytheon Company awarded $640.7M for nuclear command and control logistics support

Contract Overview

Contract Amount: $64,072,081 ($64.1M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2023-11-02

End Date: 2026-09-30

Contract Duration: 1,063 days

Daily Burn Rate: $60.3K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ORDER FOR THE PROCUREMENT OF INTERIM CONTRACTOR SUPPORT TO PROVIDE LOGISTICS SUPPORT FOR A NUCLEAR COMMAND, CONTROL AND COMMUNICATIONS INTEGRATION SYSTEM.

Place of Performance

Location: SEMINOLE, PINELLAS County, FLORIDA, 33777

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $64.1 million to RAYTHEON COMPANY for work described as: ORDER FOR THE PROCUREMENT OF INTERIM CONTRACTOR SUPPORT TO PROVIDE LOGISTICS SUPPORT FOR A NUCLEAR COMMAND, CONTROL AND COMMUNICATIONS INTEGRATION SYSTEM. Key points: 1. Contract focuses on critical nuclear command, control, and communications (NC3) integration. 2. Significant duration of over 3 years indicates long-term support needs. 3. Cost-plus-fixed-fee structure may incentivize cost overruns if not closely managed. 4. Sole-source award raises questions about potential lack of competitive pricing. 5. Geographic concentration in Florida for support services. 6. High dollar value suggests a substantial program with significant resource allocation.

Value Assessment

Rating: questionable

The contract's value of $640.7 million for interim contractor support is substantial. Without comparable sole-source contracts for similar NC3 logistics, a direct value-for-money assessment is difficult. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex R&D or services where costs are uncertain, carries inherent risks of cost escalation if not rigorously overseen. Benchmarking against other large-scale defense logistics contracts would be necessary to determine if the pricing is competitive, but the lack of competition makes this challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor, Raytheon Company, was solicited. This approach is typically used when only one source is capable of meeting the requirement, often due to proprietary technology, unique capabilities, or urgent needs. The lack of competition means that taxpayers did not benefit from potential price reductions that could arise from a competitive bidding process.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible price through market competition, potentially leading to higher costs for taxpayers.

Public Impact

The primary beneficiaries are the Department of the Air Force and the broader Department of Defense, ensuring the operational readiness of the nuclear command, control, and communications system. Services delivered include logistics support crucial for the integration and maintenance of a complex NC3 system. The contract has a geographic impact concentrated in Florida, where the support services will be performed. While not directly creating new jobs, the contract sustains existing roles within Raytheon Company related to defense logistics and NC3 systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential taxpayer savings.
Cost-plus-fixed-fee contract type can lead to cost overruns without stringent oversight.
Interim nature of the contract suggests potential for future, possibly larger, contract actions.
Lack of transparency in the justification for sole-source award.
Potential for vendor lock-in due to specialized nature of NC3 systems.

Positive Signals

Addresses a critical national security requirement for nuclear command and control.
Raytheon Company is a known entity with significant defense contracting experience.
Contract duration provides stability for essential logistics support.
Clear performance period (through September 2026) allows for planning.

Sector Analysis

This contract falls within the defense sector, specifically supporting communications equipment manufacturing and related logistics. The market for nuclear command, control, and communications systems is highly specialized, dominated by a few large defense contractors with the necessary security clearances and technical expertise. Spending in this niche is driven by national security priorities and the need to maintain and modernize aging infrastructure. Comparable spending would likely be within other large-scale defense system sustainment contracts.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Given the specialized nature of nuclear command, control, and communications systems, it is unlikely that small businesses would be primary awardees for the prime contract. However, Raytheon Company may engage small businesses as subcontractors for specific components or services, though this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force and the Department of Defense's contracting and program management offices. Accountability measures are typically embedded within the contract's terms and conditions, including performance metrics and reporting requirements. Transparency regarding the sole-source justification and ongoing contract performance is crucial but may be limited due to national security sensitivities. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse.

Related Government Programs

Nuclear Command, Control, and Communications (NC3) Systems
Defense Logistics Support
Communications Equipment Manufacturing
Air Force Systems Command
Department of Defense IT and Communications

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Interim contract designation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $64.1 million to RAYTHEON COMPANY. ORDER FOR THE PROCUREMENT OF INTERIM CONTRACTOR SUPPORT TO PROVIDE LOGISTICS SUPPORT FOR A NUCLEAR COMMAND, CONTROL AND COMMUNICATIONS INTEGRATION SYSTEM.

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 $64.1 million.

What is the period of performance?

Start: 2023-11-02. End: 2026-09-30.

What is the specific justification for awarding this contract on a sole-source basis to Raytheon Company?

The provided data indicates the contract was 'NOT COMPETED' and is 'sole-source'. While the specific justification is not detailed, common reasons for sole-source awards in defense contracting include unique capabilities, proprietary technology, urgent and compelling needs where only one source can reasonably fulfill the requirement, or when a previous contract was awarded competitively and the follow-on work is only feasible with the incumbent. For a critical system like nuclear command, control, and communications (NC3), it's plausible that Raytheon possesses unique expertise, intellectual property, or has developed specific integration capabilities that make them the only viable option for this interim support. A full justification would typically be documented by the agency and may be subject to public release with redactions.

How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for similar defense logistics services?

Cost-plus-fixed-fee (CPFF) contracts are often used when the scope of work is not precisely defined, or when there is significant uncertainty in the costs associated with performance, such as in research and development or complex system integration. In this case, it's used for 'interim contractor support' for a 'nuclear command, control and communications integration system'. Compared to fixed-price contracts, CPFF offers less price certainty for the government but allows the contractor to be reimbursed for allowable costs plus a negotiated fixed fee. This can be advantageous for highly technical or evolving requirements where defining a fixed price upfront would be impractical or lead to excessively high bids to cover risk. However, it places a greater burden on the government to meticulously track and audit costs to prevent overspending. Other contract types like firm-fixed-price (FFP) or cost-plus-incentive-fee (CPIF) might be considered if performance metrics were more clearly defined or if greater cost control incentives were desired.

What are the potential risks associated with the 'interim' nature of this contract?

The 'interim' designation suggests this contract is a temporary solution, possibly bridging a gap until a more permanent or competitively awarded contract is in place. Potential risks include: 1) Higher costs: Interim contracts, especially sole-source ones, may not achieve the same economies of scale or competitive pricing as a long-term, fully competed contract. 2) Lack of long-term planning: The temporary nature might discourage deep investment in process improvements or infrastructure by the contractor, potentially leading to less efficient support. 3) Uncertainty: The government faces uncertainty about future contract needs and costs beyond the interim period. 4) Potential for scope creep: The 'interim' scope could expand if the transition to a permanent solution is delayed. 5) Inefficiency: The contractor might not be incentivized to optimize processes as aggressively as they would under a long-term, performance-based contract.

What is Raytheon Company's track record with Department of Defense nuclear command and control systems?

Raytheon Company (now RTX) has a long and extensive history of supporting the Department of Defense (DoD) across a wide range of critical systems, including those related to command, control, communications, and intelligence (C3I). They are a major prime contractor for numerous advanced defense programs. Specifically concerning nuclear command, control, and communications (NC3), Raytheon has been involved in various aspects, including developing and integrating components, providing sustainment, and ensuring the security and reliability of these vital systems. Their involvement often spans decades and includes work on missile defense, radar systems, and secure communication networks, all of which are integral to the broader NC3 architecture. This deep experience positions them as a key player capable of handling complex logistics and integration support for such sensitive programs.

How does the $640.7 million contract value compare to historical spending on NC3 logistics support?

The $640.7 million figure represents a significant investment in logistics support for a specific NC3 integration system. To provide context, historical spending on NC3 logistics would need to be examined across multiple contracts and fiscal years. The NC3 enterprise is vast and involves numerous systems, programs, and sustainment efforts managed by different branches of the military (Air Force, Navy) and agencies. Annual spending on NC3 modernization and sustainment can run into billions of dollars. This specific contract, being for 'interim contractor support' and awarded sole-source, might represent a portion of the overall NC3 logistics budget. Without access to detailed historical spending data specifically for NC3 logistics contracts, and particularly for sole-source interim support orders, a precise comparison is difficult. However, given the critical nature and complexity of NC3, such a dollar amount is not unusual for major defense logistics support contracts.

What are the implications of this contract being performed in Florida?

The contract specifies 'st': 'FL' and 'sn': 'FLORIDA', indicating that the logistics support services will be performed in Florida. This has several implications: 1) Economic impact: It directs federal spending to the Florida economy, potentially supporting jobs and businesses within the state. 2) Workforce: It may leverage existing skilled labor in Florida's defense and aerospace sectors. 3) Operational proximity: Depending on the specific NC3 integration system and its operational deployment, having support located in Florida could offer logistical advantages or be dictated by the location of key personnel, facilities, or related infrastructure. 4) Contractor presence: It signifies a significant operational footprint for Raytheon Company or its subcontractors in Florida for the duration of the contract.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Other Communications Equipment Manufacturing

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - END USER

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 1001 BOSTON POST RD E, MARLBOROUGH, MA, 01752

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: $65,472,198

Exercised Options: $65,472,198

Current Obligation: $64,072,081

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $1,113,269

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA873521D0001

IDV Type: IDC

Timeline