Raytheon Company awarded $253M for Counter Unmanned Aircraft System solutions, enhancing operational effectiveness

Contract Overview

Contract Amount: $253,261,774 ($253.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2023-04-13

End Date: 2026-05-31

Contract Duration: 1,144 days

Daily Burn Rate: $221.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THIS TASK IS TO ANALYZE, INTEGRATE, MODIFY, PROCURE, AND DELIVER SOLUTIONS TO IMPROVE OPERATIONAL EFFECTIVENESS, ENHANCE PERFORMANCE FOR ENHANCED COYOTE BLOCK 2 AND COYOTE BLOCK 3 COUNTER UNMANNED AIRCRAFT SYSTEM SOLUTIONS.

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75071

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $253.3 million to RAYTHEON COMPANY for work described as: THIS TASK IS TO ANALYZE, INTEGRATE, MODIFY, PROCURE, AND DELIVER SOLUTIONS TO IMPROVE OPERATIONAL EFFECTIVENESS, ENHANCE PERFORMANCE FOR ENHANCED COYOTE BLOCK 2 AND COYOTE BLOCK 3 COUNTER UNMANNED AIRCRAFT SYSTEM SOLUTIONS. Key points: 1. Contract focuses on improving Counter Unmanned Aircraft Systems (C-UAS) for enhanced operational effectiveness. 2. The award is a delivery order under a larger contract, indicating a phased approach to solutions. 3. Competition was full and open, suggesting a robust market for C-UAS technology. 4. The contract type is Cost Plus Fixed Fee, which can incentivize contractor efficiency while managing risk. 5. Performance is expected to span over three years, indicating a significant, ongoing need. 6. The primary focus is on Coyote Block 2 and Block 3 systems, highlighting specific technology advancements.

Value Assessment

Rating: good

The contract's Cost Plus Fixed Fee structure allows for flexibility in development and integration of C-UAS solutions. While specific per-unit costs are not detailed, the overall award value of $253 million for engineering services related to advanced C-UAS technology appears reasonable given the complexity and critical nature of counter-drone capabilities. Benchmarking against similar advanced defense technology procurements suggests this level of investment is in line with market expectations for cutting-edge systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors were likely invited to bid. The specific number of bidders is not provided, but the open competition suggests a healthy market for Counter Unmanned Aircraft System solutions. This approach generally leads to better price discovery and ensures the government receives competitive offers from a wide range of qualified contractors.

Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and access to the most innovative and cost-effective solutions available in the market.

Public Impact

The Department of Defense, specifically the Defense Microelectronics Activity, is the primary beneficiary, seeking to enhance its counter-unmanned aircraft capabilities. Services delivered will focus on improving operational effectiveness and performance of Coyote Block 2 and Block 3 Counter Unmanned Aircraft Systems. The geographic impact is not specified but is likely to be relevant to operational theaters where drone threats are present. Workforce implications may include specialized engineering and technical roles within Raytheon Company and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can sometimes lead to cost overruns if not managed diligently.
The specific performance metrics and deliverables are not detailed, posing a potential risk if not clearly defined.
Reliance on specific Coyote Block versions might limit future adaptability if new threats emerge rapidly.

Positive Signals

Awarded under full and open competition, suggesting a competitive environment that should drive value.
Focus on enhancing operational effectiveness for critical counter-drone systems addresses a significant modern threat.
The contract duration allows for substantial development and integration of advanced solutions.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting advanced defense technology. The market for Counter Unmanned Aircraft Systems (C-UAS) is rapidly growing due to increasing drone threats across military and civilian applications. Spending in this area is substantial, with governments worldwide investing heavily in C-UAS solutions. This contract with Raytheon Company represents a significant investment in a key component of national security infrastructure.

Small Business Impact

The provided data indicates this contract was not set aside for small businesses and Raytheon Company is a large prime contractor. There is no explicit information on subcontracting plans for small businesses. However, large defense contracts often involve a significant portion of work being subcontracted, potentially creating opportunities for small businesses in specialized areas of engineering, manufacturing, or support services related to C-UAS technology.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Defense and the Defense Microelectronics Activity. Accountability measures would be tied to the Cost Plus Fixed Fee contract terms, requiring Raytheon to justify costs and demonstrate progress towards defined performance objectives. Transparency is typically maintained through contract reporting requirements and potential reviews by oversight bodies like the Government Accountability Office (GAO) or the Inspector General, depending on the nature of any issues that may arise.

Related Government Programs

Counter-UAS Systems
Air Defense Systems
Unmanned Aerial Vehicle (UAV) Technology
Defense Engineering Services
Advanced Technology Development

Risk Flags

Cost Overrun Risk
Scope Creep Potential
Performance Measurement Clarity
Technological Obsolescence
Supply Chain Dependencies

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $253.3 million to RAYTHEON COMPANY. THIS TASK IS TO ANALYZE, INTEGRATE, MODIFY, PROCURE, AND DELIVER SOLUTIONS TO IMPROVE OPERATIONAL EFFECTIVENESS, ENHANCE PERFORMANCE FOR ENHANCED COYOTE BLOCK 2 AND COYOTE BLOCK 3 COUNTER UNMANNED AIRCRAFT SYSTEM SOLUTIONS.

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Microelectronics Activity).

What is the total obligated amount?

The obligated amount is $253.3 million.

What is the period of performance?

Start: 2023-04-13. End: 2026-05-31.

What is Raytheon Company's track record with Counter Unmanned Aircraft Systems?

Raytheon Company has a significant and established track record in developing and supplying advanced defense systems, including those related to counter-unmanned aircraft. They are known for their work on various missile defense systems, radar technology, and electronic warfare capabilities, all of which are relevant to C-UAS. The Coyote Block 2 and Block 3 systems themselves are part of their portfolio, indicating direct experience with the specific technologies being enhanced under this contract. Their history includes numerous large-scale defense contracts with the U.S. Department of Defense and allied nations, demonstrating a capacity to manage complex projects and deliver sophisticated technological solutions.

How does the $253 million award compare to similar C-UAS procurements?

The $253 million award for engineering services to enhance Coyote Block 2 and 3 C-UAS solutions is substantial, reflecting the complexity and critical nature of counter-drone technology. Comparing this to other C-UAS procurements, it falls within a range typical for significant system development and integration efforts. For instance, other branches of the military have awarded contracts in the hundreds of millions for integrated C-UAS platforms, including hardware, software, and training. The value is consistent with investments in advanced defense capabilities designed to counter evolving threats, suggesting it is a competitive and appropriate figure for the scope of work.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for this type of system?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for advanced C-UAS systems revolve around cost control and scope management. While the fixed fee provides the contractor with an incentive to control costs to maximize profit, the 'cost plus' element means the government ultimately reimburses allowable costs. If the project encounters unforeseen technical challenges or scope creep, costs can escalate beyond initial projections. Effective oversight is crucial to ensure that all costs are reasonable, allocable, and allowable, and that the contractor is diligently working towards the fixed fee objectives without unnecessary expenditure. There's also a risk that the contractor might prioritize cost recovery over optimal performance if not managed carefully.

How effective are Coyote Block 2 and 3 systems in current operational environments?

Coyote Block 2 and 3 systems are designed as a key component of counter-unmanned aircraft solutions, often deployed as interceptors or part of a layered defense strategy. Their effectiveness is generally considered high within their intended operational parameters, particularly against smaller, less sophisticated drones. Block 3 represents an advancement over Block 2, likely offering improved capabilities such as enhanced sensors, greater range, or more sophisticated guidance systems. Their deployment in various exercises and potentially in operational theaters suggests a proven capability, though effectiveness can vary based on the specific threat environment, integration with other C-UAS components, and operator proficiency.

What has been the historical spending trend for Counter Unmanned Aircraft Systems by the Department of Defense?

Historical spending by the Department of Defense (DoD) on Counter Unmanned Aircraft Systems (C-UAS) has shown a significant upward trend over the past decade. Initially, spending was more fragmented, focusing on individual component technologies like jammers or sensors. However, with the proliferation of drone threats, the DoD has increasingly consolidated and increased its investment in integrated C-UAS solutions. This includes funding for research and development, procurement of interceptors and detection systems, and integration efforts across different military branches. The total annual spending has grown from tens of millions to billions of dollars, reflecting the strategic importance placed on countering drone threats.

What is the significance of the Defense Microelectronics Activity awarding this contract?

The Defense Microelectronics Activity (DMEA) awarding this contract signifies a focus on the underlying technological components and integration critical for advanced defense systems like C-UAS. DMEA often plays a role in ensuring the availability and advancement of microelectronics essential for defense applications, which are fundamental to the sophisticated sensors, processors, and communication systems within C-UAS. By awarding this contract, DMEA is likely ensuring that the Coyote systems benefit from cutting-edge microelectronic solutions, potentially enhancing their performance, reliability, and resilience against electronic warfare or other countermeasures. This highlights the importance of foundational technology in the overall effectiveness of complex weapon systems.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HQ072715R0001

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 2000 E EL SEGUNDO BLVD, EL SEGUNDO, CA, 90245

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: $253,261,774

Exercised Options: $253,261,774

Current Obligation: $253,261,774

Subaward Activity

Number of Subawards: 118

Total Subaward Amount: $91,809,400

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HQ072716D0006

IDV Type: IDC

Timeline