DoD Awards Raytheon $276M for Joint Precision Approach and Landing System, Raising Oversight Concerns
Contract Overview
Contract Amount: $275,963,190 ($276.0M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2016-09-21
End Date: 2024-10-31
Contract Duration: 2,962 days
Daily Burn Rate: $93.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: JOINT PRECISION APPROACH AND LANDING SYSTEM
Place of Performance
Location: FULLERTON, ORANGE County, CALIFORNIA, 92833
Plain-Language Summary
Department of Defense obligated $276.0 million to RAYTHEON COMPANY for work described as: JOINT PRECISION APPROACH AND LANDING SYSTEM Key points: 1. Significant contract value of $276 million awarded to a single vendor. 2. Sole-source award to Raytheon Company limits competitive pricing. 3. Potential for cost overruns due to Cost Plus Incentive Fee contract type. 4. The sector is critical for military aviation safety and operational readiness.
Value Assessment
Rating: questionable
The contract's Cost Plus Incentive Fee structure, combined with a sole-source award, suggests potential for higher-than-necessary costs. Benchmarking against similar navigation systems is difficult without competitive data.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, meaning the Department of the Navy directly awarded it to Raytheon Company. This lack of competition limits price discovery and may result in less favorable terms for the government.
Taxpayer Impact: The absence of competition for a $276 million contract raises concerns about taxpayer value and the potential for inflated costs.
Public Impact
Ensures advanced landing capabilities for naval aircraft, enhancing safety and operational flexibility. Supports critical military operations by providing precise navigation in challenging environments. Investment in advanced technology for the Department of Defense.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Incentive Fee contract type
- Lack of transparency in pricing due to no competition
Positive Signals
- Critical technology for national defense
- Long-term contract duration suggests sustained need
Sector Analysis
The Department of Defense's investment in navigation systems falls within the broader aerospace and defense sector. Spending benchmarks for similar complex systems are often proprietary, but large sole-source awards warrant scrutiny.
Small Business Impact
This contract was awarded directly to Raytheon Company and does not indicate any subcontracting opportunities for small businesses. The nature of the award suggests a focus on established prime contractors.
Oversight & Accountability
The sole-source nature of this large contract necessitates robust oversight from the Department of the Navy to ensure cost control and performance. Independent cost analysis and regular performance reviews are crucial.
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 and price discovery.
- Cost Plus Incentive Fee contract type carries inherent risk of cost overruns.
- Lack of transparency in pricing due to non-competitive nature.
- Potential for reduced government leverage in contract negotiations.
Tags
search-detection-navigation-guidance-aer, department-of-defense, ca, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $276.0 million to RAYTHEON COMPANY. JOINT PRECISION APPROACH AND LANDING SYSTEM
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 $276.0 million.
What is the period of performance?
Start: 2016-09-21. End: 2024-10-31.
What is the justification for the sole-source award, and were alternative competitive strategies considered?
The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of viable alternatives. Without a competitive process, it is difficult to ascertain if other vendors could have met the requirements or offered a more cost-effective solution. Further documentation would be needed to assess the validity of the sole-source justification.
How will the Cost Plus Incentive Fee structure be managed to prevent cost overruns and ensure fair pricing?
Effective management of a Cost Plus Incentive Fee (CPIF) contract requires clear performance metrics, realistic target costs, and well-defined incentive/disincentive clauses. The government must closely monitor expenditures, track progress against milestones, and ensure that incentives align with desired outcomes without encouraging unnecessary spending.
What is the projected long-term cost-effectiveness of this system compared to potential alternatives?
Assessing long-term cost-effectiveness is challenging without competitive bids or detailed lifecycle cost analyses. The current sole-source award limits the ability to benchmark against other available technologies. A thorough review of operational data and future upgrade paths would be necessary to determine true cost-effectiveness over the system's lifespan.
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: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0001915R0114
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: Rockwell Collins Australia PTY Limited
Address: 1801 HUGHES DR, FULLERTON, CA, 92833
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: $280,264,216
Exercised Options: $275,963,190
Current Obligation: $275,963,190
Actual Outlays: $18,233,545
Subaward Activity
Number of Subawards: 34
Total Subaward Amount: $74,226,632
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2016-09-21
Current End Date: 2024-10-31
Potential End Date: 2024-10-31 00:00:00
Last Modified: 2024-08-30
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