DoD awards $256M for P-8A Poseidon radar kits, raising concerns over sole-source procurement

Contract Overview

Contract Amount: $255,927,894 ($255.9M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2015-06-11

End Date: 2022-12-23

Contract Duration: 2,752 days

Daily Burn Rate: $93.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MULTIYEAR CONTRACT FOR THE PROCUREMENT OF 53 P-8A POSEIDON APY-10 RADAR PRODUCTION KITS TO BE PROVIDED AS GFE FOR FY 2015 THROUGH FY 2019.

Place of Performance

Location: MCKINNEY, COLLIN County, TEXAS, 75070

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $255.9 million to RAYTHEON COMPANY for work described as: MULTIYEAR CONTRACT FOR THE PROCUREMENT OF 53 P-8A POSEIDON APY-10 RADAR PRODUCTION KITS TO BE PROVIDED AS GFE FOR FY 2015 THROUGH FY 2019. Key points: 1. Significant investment in advanced radar technology for the P-8A Poseidon aircraft. 2. Sole-source award to Raytheon Company limits competitive pricing and innovation. 3. Long contract duration (2015-2022) may not reflect current market conditions. 4. Lack of competition raises questions about value for taxpayer money.

Value Assessment

Rating: questionable

The contract value of $255.9 million for 53 radar production kits is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential market alternatives.

Cost Per Unit: $4,828,828

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Raytheon Company. This lack of competition limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: The absence of competition in this significant procurement means taxpayers may not be receiving the best possible price for these critical radar systems.

Public Impact

Enhances the surveillance and reconnaissance capabilities of the P-8A Poseidon fleet. Supports the U.S. Navy's maritime patrol and anti-submarine warfare operations. Potential for long-term reliance on a single supplier for critical components. Impacts the defense industrial base by concentrating production with one firm.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Long contract duration

Positive Signals

Procurement of critical defense technology
Supports essential military aircraft capabilities

Sector Analysis

This procurement falls within the aerospace and defense sector, specifically focusing on advanced radar systems for military aircraft. Spending benchmarks for similar complex electronic systems can vary widely, but sole-source awards often deviate from competitive norms.

Small Business Impact

The data does not indicate any specific provisions or benefits for small businesses in this sole-source contract award to Raytheon Company.

Oversight & Accountability

The sole-source nature of this contract warrants scrutiny regarding the justification for not pursuing competitive bidding. Oversight should focus on ensuring fair pricing and performance despite the lack of competition.

Related Government Programs

Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Sole-source award limits competition.
Potential for inflated pricing due to lack of competition.
Long contract duration may not reflect current market value.
Dependency on a single supplier for critical components.
Lack of transparency regarding procurement justification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $255.9 million to RAYTHEON COMPANY. MULTIYEAR CONTRACT FOR THE PROCUREMENT OF 53 P-8A POSEIDON APY-10 RADAR PRODUCTION KITS TO BE PROVIDED AS GFE FOR FY 2015 THROUGH FY 2019.

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 $255.9 million.

What is the period of performance?

Start: 2015-06-11. End: 2022-12-23.

What was the justification for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?

The justification for a sole-source award typically involves factors such as unique capabilities, proprietary technology, or urgent need where only one source can fulfill the requirement. Without further documentation, it's unclear if alternative competitive strategies were explored or deemed unfeasible. This lack of transparency hinders a full assessment of the procurement's value.

How does the per-unit cost of these radar kits compare to similar systems acquired through competitive processes, either by the DoD or allied nations?

Benchmarking the per-unit cost of $4.8 million against comparable systems is challenging without access to proprietary pricing data or a competitive baseline. Sole-source contracts often lack the downward price pressure inherent in competitive bidding, suggesting this figure may be higher than what could be achieved through open competition.

What measures are in place to ensure the long-term effectiveness and maintainability of these radar systems, given the sole-source provider?

While the contract specifies a Firm Fixed Price, ensuring long-term effectiveness and maintainability with a sole-source provider requires robust government oversight. This includes performance monitoring, clear contract terms for support, and potentially negotiating future options or technology refresh agreements to mitigate risks associated with vendor lock-in.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001914R0006

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 2501 W UNIVERSITY DR, MCKINNEY, TX, 75070

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: $260,607,098

Exercised Options: $256,683,223

Current Obligation: $255,927,894

Actual Outlays: $11,919,939

Subaward Activity

Number of Subawards: 130

Total Subaward Amount: $23,873,294

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline