DoD awards Raytheon $68M for AN/AQS-22 Sonar, raising concerns over sole-source procurement

Contract Overview

Contract Amount: $68,020,474 ($68.0M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2007-02-12

End Date: 2012-05-30

Contract Duration: 1,934 days

Daily Burn Rate: $35.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AN/AQS-22 AIRBORNE LOW FREQUENCY SONAR

Place of Performance

Location: PORTSMOUTH, NEWPORT County, RHODE ISLAND, 02871

State: Rhode Island Government Spending

Plain-Language Summary

Department of Defense obligated $68.0 million to RAYTHEON COMPANY for work described as: AN/AQS-22 AIRBORNE LOW FREQUENCY SONAR Key points: 1. Significant contract value of $68M for specialized sonar equipment. 2. Sole-source award to Raytheon Company limits competitive pricing. 3. Long contract duration (1934 days) may indicate potential for cost overruns. 4. Focus on 'Other Aircraft Parts' sector, with specific application in naval aviation.

Value Assessment

Rating: questionable

The contract value of $68M for the AN/AQS-22 Sonar is difficult to benchmark without comparable sole-source awards. The lack of competition inherently limits price discovery, making it challenging to assess if the price is truly fair and reasonable.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Raytheon Company, was solicited. This method bypasses competitive bidding, potentially leading to higher prices than if multiple vendors had competed.

Taxpayer Impact: Sole-source awards can result in taxpayers paying a premium for goods and services due to the absence of market competition.

Public Impact

Naval readiness may be impacted by the availability and performance of this critical sonar system. Taxpayers may be overpaying for this specialized defense equipment due to the lack of competition. The long-term sustainment and upgrade costs for this system could be substantial.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source procurement
Lack of competition
Long contract duration

Positive Signals

Critical defense capability
Established technology

Sector Analysis

This contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector, specifically for naval aviation. Spending in this niche defense manufacturing area is often characterized by high R&D costs and specialized production, with significant government oversight.

Small Business Impact

The data indicates this contract was awarded to Raytheon Company, a large defense contractor. There is no indication of small business participation in this specific sole-source award.

Oversight & Accountability

The 'AW' code suggests 'DCA' (Defense Contract Audit Agency) involvement, implying some level of audit or oversight. However, the sole-source nature raises questions about the effectiveness of competition-driven oversight in ensuring value.

Related Government Programs

Other Aircraft Parts and Auxiliary Equipment Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Sole-source award lacks competitive pricing.
Extended contract duration may lead to cost overruns.
Limited transparency in price determination.
Potential for contractor lock-in.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $68.0 million to RAYTHEON COMPANY. AN/AQS-22 AIRBORNE LOW FREQUENCY SONAR

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 Navy).

What is the total obligated amount?

The obligated amount is $68.0 million.

What is the period of performance?

Start: 2007-02-12. End: 2012-05-30.

What is the justification for the sole-source award of the AN/AQS-22 Sonar system to Raytheon Company?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or a lack of viable alternatives. Without specific documentation, it's presumed the Navy determined Raytheon possessed the sole ability to meet the requirements for the AN/AQS-22, potentially due to its specialized nature and integration with existing naval platforms.

What are the potential risks associated with the long duration and sole-source nature of this contract?

The primary risks include inflated costs due to lack of competition, potential for scope creep over the extended period, and reduced incentive for the contractor to innovate or improve efficiency. Taxpayers may bear the burden of higher prices and potentially less advanced technology compared to a competitive environment.

How does the AN/AQS-22 Sonar system contribute to naval effectiveness, and is its cost justified?

The AN/AQS-22 is a critical component for submarine detection and warfare, enhancing the Navy's anti-submarine warfare (ASW) capabilities. While essential for mission effectiveness, the justification of its cost is questionable given the sole-source procurement method, which limits transparency and competitive pressure on pricing.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1847 W MAIN RD, PORTSMOUTH, RI, 01

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $68,106,774

Exercised Options: $68,106,774

Current Obligation: $68,020,474

Contract Characteristics

Cost or Pricing Data: NO

Timeline