Raytheon Company awarded $148M for airborne sonar systems, a sole-source contract with a long performance period

Contract Overview

Contract Amount: $148,258,671 ($148.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2009-09-22

End Date: 2018-09-30

Contract Duration: 3,295 days

Daily Burn Rate: $45.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AN/ASQ-22 AIRBRONE 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 $148.3 million to RAYTHEON COMPANY for work described as: AN/ASQ-22 AIRBRONE LOW FREQUENCY SONAR Key points: 1. The contract's value of $148.3 million over nearly a decade suggests significant investment in advanced defense capabilities. 2. As a sole-source award, the absence of competitive bidding raises questions about potential price inflation and optimal value. 3. The long duration of the contract (over 9 years) indicates a sustained need for this specific technology, but also limits flexibility. 4. The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector classification places this within a specialized niche of defense procurement. 5. The contract's 'RI' (Rhode Island) designation points to a specific geographic concentration for performance or delivery. 6. The firm-fixed-price contract type aims to transfer some cost risk to the contractor, but the lack of competition complicates this.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and specialized equipment. Without competitive bids, it's difficult to ascertain if the $148.3 million represents a fair market price. The long performance period could indicate a stable, albeit potentially inflated, cost structure. Comparisons to similar airborne sonar systems procured competitively would be necessary for a more robust value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one responsible source can provide the required supplies or services. The lack of competition means there was no opportunity for multiple vendors to bid, potentially limiting price discovery and the government's ability to secure the best possible terms.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. The government did not benefit from the cost-saving mechanisms inherent in a competitive bidding process.

Public Impact

The primary beneficiaries are the U.S. Navy's operational forces requiring advanced airborne low-frequency sonar capabilities for maritime surveillance and anti-submarine warfare. The contract delivers specialized AN/ASQ-22 airborne sonar systems, crucial for intelligence, surveillance, and reconnaissance missions. The contract's performance is associated with Rhode Island, suggesting potential economic impact and job creation in that region. The acquisition of advanced defense technology supports the readiness and effectiveness of the U.S. military's aerial and naval assets.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
Long contract duration (over 9 years) may indicate a lack of readily available alternatives or a sustained, high-cost technology.
Lack of transparency in the justification for sole-sourcing makes it difficult to assess if alternatives were truly unavailable.
The specific nature of the equipment suggests a high barrier to entry for potential competitors.

Positive Signals

Firm-fixed-price contract type helps manage cost uncertainty for the government.
The sustained award indicates a critical and ongoing need for this specific sonar technology within the Navy.
The contractor, Raytheon Company, is a major defense supplier with established expertise in this domain.

Sector Analysis

The defense electronics sector, particularly specialized areas like airborne sonar systems, is characterized by high research and development costs, long product lifecycles, and significant government procurement. This contract falls within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' category, highlighting its niche within the broader aerospace and defense industry. Market size for such specialized systems is driven by defense budgets and evolving threat landscapes, with limited players possessing the necessary technological capabilities.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. Furthermore, the sole-source nature of the award suggests that subcontracting opportunities for small businesses may be limited to those directly integrated into Raytheon's supply chain for this specific system. The impact on the broader small business ecosystem is likely minimal unless Raytheon actively engages small businesses for specialized components or services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a sole-source award, the justification and approval process would have undergone specific scrutiny. Transparency regarding the rationale for sole-sourcing and performance metrics would be key to assessing accountability. The Inspector General for the Department of Defense may also have jurisdiction for audits and investigations related to contract execution and potential fraud, waste, or abuse.

Related Government Programs

Naval Aviation Systems
Sonar Technology Procurement
Defense Electronics Manufacturing
Airborne Surveillance Equipment
Anti-Submarine Warfare Systems

Risk Flags

Sole-source award raises concerns about price reasonableness.
Long contract duration may indicate limited market alternatives.
Lack of competition hinders price discovery and potential savings.
Specialized nature of equipment suggests high barriers to entry for competitors.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $148.3 million to RAYTHEON COMPANY. AN/ASQ-22 AIRBRONE 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 $148.3 million.

What is the period of performance?

Start: 2009-09-22. End: 2018-09-30.

What is the historical spending trend for the AN/ASQ-22 airborne sonar system?

Historical spending data for the AN/ASQ-22 airborne sonar system prior to this specific $148.3 million award is not detailed in the provided data. However, the contract's duration (2009-2018) suggests a significant, long-term investment. To understand the full historical spending, one would need to examine previous contracts for this system or its predecessors, looking at annual expenditures, modifications, and sustainment costs. Without this broader context, it's difficult to assess if the $148.3 million represents an increase, decrease, or consistent level of spending for this capability over time. Analyzing past contract awards for the AN/ASQ-22 would reveal the total lifecycle cost and investment trajectory.

How does the per-unit cost of the AN/ASQ-22 compare to similar systems?

Determining the per-unit cost for the AN/ASQ-22 is not possible with the provided data, as the total award amount ($148.3 million) does not specify the number of units procured under this contract. Furthermore, as a sole-source award for specialized defense equipment, direct comparisons to market rates or similar systems procured competitively are inherently difficult. Such comparisons would require access to detailed specifications, performance metrics, and pricing structures of alternative systems, as well as their procurement costs. The lack of competitive bidding for the AN/ASQ-22 further complicates any attempt at a meaningful per-unit cost benchmark against other available technologies.

What are the key performance indicators (KPIs) for the AN/ASQ-22 system under this contract?

The provided contract data does not explicitly list the Key Performance Indicators (KPIs) for the AN/ASQ-22 airborne sonar system. Typically, for defense systems like this, KPIs would focus on operational effectiveness, reliability, maintainability, and specific performance metrics related to sonar detection range, accuracy, and environmental adaptability. These would be detailed in the contract's Statement of Work (SOW) and technical specifications. Without access to these documents, it's impossible to detail the specific KPIs. However, given its role in anti-submarine warfare and maritime surveillance, KPIs would likely revolve around successful target detection, classification, and tracking under various operational conditions.

What is Raytheon Company's track record with sole-source defense contracts?

Raytheon Company, now part of RTX, has a long history of securing significant defense contracts, including sole-source awards, given its position as a major defense contractor. Their track record typically involves complex systems integration, advanced electronics, and platforms for various military branches. Sole-source awards for Raytheon often stem from the proprietary nature of their technology, the need for specialized expertise, or the integration requirements with existing platforms. While such awards can be efficient for acquiring unique capabilities, they also necessitate robust government oversight to ensure fair pricing and value. Raytheon's extensive experience means they are adept at navigating the sole-source procurement process, but it also places a greater onus on the government to perform thorough due diligence.

What is the justification for this contract being sole-sourced?

The provided data indicates the contract was 'NOT COMPETED,' implying a sole-source justification was made. Common justifications for sole-sourcing defense contracts include: (1) only one responsible source possesses the unique capability or technology required; (2) the requirement is a follow-on to a previously competed contract where only the original contractor can provide necessary compatibility or integration; (3) urgent and compelling circumstances prevent competition; or (4) the acquisition is for a specific research and development purpose where competition is not feasible. For the AN/ASQ-22 airborne sonar system, the justification likely relates to the specialized, proprietary nature of the technology and its integration with specific Navy aircraft platforms, making Raytheon the only viable provider.

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

Solicitation ID: N0001908R0095

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1847 W MAIN RD, PORTSMOUTH, RI, 02871

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $148,258,671

Exercised Options: $148,258,671

Current Obligation: $148,258,671

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline