Raytheon Company awarded $31.3M for system engineering and integration services by DHS

Contract Overview

Contract Amount: $31,272,331 ($31.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Homeland Security

Start Date: 2007-04-06

End Date: 2010-01-31

Contract Duration: 1,031 days

Daily Burn Rate: $30.3K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 3

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: SYSTEM ENGINEERING & INTEGRATION SERVICES

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $31.3 million to RAYTHEON COMPANY for work described as: SYSTEM ENGINEERING & INTEGRATION SERVICES Key points: 1. Contract value of $31.3M for system engineering and integration services. 2. Services provided by Raytheon Company to the Department of Homeland Security. 3. Contract awarded by the Transportation Security Administration. 4. Duration of the contract was 1031 days. 5. Contract type was Time and Materials. 6. This was a competitive delivery order.

Value Assessment

Rating: fair

The total award of $31.3M for system engineering and integration services appears to be within a reasonable range for the scope of work, considering the duration of the contract. However, without specific benchmarks for similar system engineering and integration contracts within the Transportation Security Administration or the broader Department of Homeland Security, a precise value-for-money assessment is challenging. The Time and Materials pricing structure can sometimes lead to cost overruns if not closely monitored, which warrants a 'fair' rating.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a competitive delivery order, indicating that multiple vendors likely had the opportunity to bid. The presence of 3 bidders suggests a moderate level of competition for this specific delivery order. While competitive, the exact number of bidders is relatively low, which could slightly impact price discovery compared to a larger pool of competitors.

Taxpayer Impact: A competitive award process is generally favorable for taxpayers as it encourages multiple vendors to offer their best pricing and technical solutions, potentially leading to cost savings.

Public Impact

The Department of Homeland Security, specifically the Transportation Security Administration, benefits from enhanced system engineering and integration capabilities. These services are crucial for the development, implementation, and maintenance of complex technological systems within TSA. The geographic impact is primarily within the operational areas of the Transportation Security Administration, likely across various airports and transportation hubs. The contract supports a workforce skilled in system engineering, integration, and related technical fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials contract type can lead to cost uncertainty if not managed rigorously.
Limited number of bidders (3) may indicate potential for higher pricing than with broader competition.
Specific performance metrics and outcomes are not detailed in the provided data, making it hard to assess effectiveness.

Positive Signals

Awarded through a competitive process, suggesting a degree of market vetting.
Contract duration of over 1000 days indicates a sustained need and potential for stable service delivery.
Services provided are critical for national security and transportation safety.

Sector Analysis

System engineering and integration services are a vital component of the IT and Defense sectors, supporting the development and maintenance of complex technological infrastructures. The market for these services is substantial, driven by government agencies and large corporations requiring specialized expertise. This contract fits within the broader category of professional services, where specialized technical knowledge is paramount. Comparable spending benchmarks would typically be found within IT services or defense contracting categories, often measured by contract value and duration.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. Therefore, it is unlikely that small businesses were directly targeted for this award. Subcontracting opportunities for small businesses may exist at the discretion of the prime contractor, Raytheon Company, but are not explicitly detailed here. The impact on the small business ecosystem would depend on whether Raytheon engages small businesses as subcontractors for specialized components or services.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of Homeland Security's contracting officers and program managers. Accountability measures would be embedded in the contract's terms and conditions, including performance standards and reporting requirements. Transparency is generally facilitated through contract databases like FPDS-NG, where basic award information is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Homeland Security IT Services
Transportation Security Administration Technology Modernization
System Engineering and Integration Contracts
Federal Professional Services Contracts

Risk Flags

Potential for cost overruns due to Time and Materials pricing structure.
Moderate competition level (3 bidders) may limit price discovery.
Lack of detailed performance metrics in provided data makes effectiveness assessment difficult.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $31.3 million to RAYTHEON COMPANY. SYSTEM ENGINEERING & INTEGRATION SERVICES

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Transportation Security Administration).

What is the total obligated amount?

The obligated amount is $31.3 million.

What is the period of performance?

Start: 2007-04-06. End: 2010-01-31.

What is Raytheon Company's track record with the Department of Homeland Security for similar services?

Raytheon Company, now part of RTX, has a significant history of contracting with the Department of Homeland Security (DHS) across various agencies and service areas, including IT, cybersecurity, and systems engineering. For the Transportation Security Administration (TSA) specifically, Raytheon has been involved in providing technology solutions and support for critical infrastructure. Analyzing their past performance on similar contracts within DHS would involve reviewing contract databases for award history, value, duration, and any reported performance issues or successes. A deeper dive would look into past performance evaluations, if publicly accessible, to gauge their reliability and effectiveness in delivering complex system engineering and integration services to DHS.

How does the $31.3M award compare to other system engineering and integration contracts awarded by TSA or DHS?

The $31.3M award for system engineering and integration services over a period of approximately 3 years (1031 days) is a substantial but not exceptionally large contract within the context of major federal IT and defense spending. To benchmark this value, one would compare it against other contracts for similar services awarded by TSA and DHS. For instance, larger, multi-year system integration programs can easily reach hundreds of millions or even billions of dollars. Conversely, smaller, more focused engineering support contracts might be in the single-digit millions. This $31.3M award appears to be a mid-range contract, suggesting a significant but not enterprise-wide scope of work for system engineering and integration.

What are the primary risks associated with a Time and Materials (T&M) contract for system engineering and integration?

The primary risk associated with a Time and Materials (T&M) contract for system engineering and integration is the potential for cost escalation due to a lack of a fixed ceiling on labor hours and material costs. Unlike fixed-price contracts, T&M contracts pay the contractor for the actual time and materials expended. If project scope creeps, inefficiencies arise, or the contractor does not manage resources effectively, costs can significantly exceed initial estimates. For system engineering and integration, where requirements can evolve and technical challenges may be complex, T&M contracts require robust oversight, detailed tracking of hours and expenses, and strong program management from the government side to mitigate these risks and ensure value for money.

How effective are competitive delivery orders in ensuring fair pricing for system engineering services?

Competitive delivery orders, when executed properly, are an effective mechanism for ensuring fair pricing for system engineering services. By soliciting bids from multiple qualified vendors, the government creates a competitive environment that incentivizes contractors to offer their most competitive rates and innovative solutions. The presence of multiple bidders allows for price discovery and comparison, helping the government identify the best value. However, the effectiveness is contingent on the number of bidders, the clarity of the solicitation, and the government's ability to evaluate proposals objectively. A low number of bidders or poorly defined requirements can diminish the competitive pressure and potentially lead to less favorable pricing.

What is the typical duration for system engineering and integration contracts of this magnitude?

The typical duration for system engineering and integration contracts can vary widely depending on the complexity of the systems, the agency's modernization plans, and the contract vehicle used. For a contract valued at approximately $31.3 million, a duration of around 3 years (as seen with the 1031 days in this case) is quite common. Many large-scale system integration projects can span 5 years or more, often broken down into phases or multiple contract awards. Shorter durations, perhaps 1-2 years, might be seen for more focused support tasks or specific system upgrades. The 3-year timeframe suggests a substantial, ongoing need for engineering support rather than a short-term project.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 22265 PACIFIC BLVD, DULLES, VA, 10

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $33,229,470

Exercised Options: $33,229,470

Current Obligation: $31,272,331

Parent Contract

Parent Award PIID: GS23F0263K

IDV Type: FSS

Timeline