Raytheon E-Systems awarded $182.5M for R&D in Electronics & Communication Equipment by the Navy

Contract Overview

Contract Amount: $182,492,852 ($182.5M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 1998-11-02

End Date: 2012-09-30

Contract Duration: 5,081 days

Daily Burn Rate: $35.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 199906!1700!0538!AT721!NAVAL AIR SYSTEMS COMMAND !N0001998C0190 !A!*!* !19981102!20031102!053387429!045591104!001339159!N!04071!RAYTHEON E-SYSTEMS, INC !7700 ARLINGTON BLVD !FALLS CHURCH !VA!22042!27200!610!51!FALLS CHURCH !FALLS CHURCH (CITY) !VIRGINIA !0001!+000001000000!N!N!000000000000!AC62!RDTE/ELECTRONICS & COMMUNICATION EQ-APPLIED RESEA !C9E!ALL OTHER SUPPLIES AND EQUIPME!2000!NOT DISCERNABLE OR CLASSIFIED !8711!3!*!*!*!B!A!*!A !N!R!2!006!B!* !Z!N!Z!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: STERLING, LOUDOUN County, VIRGINIA, 20166

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $182.5 million to RAYTHEON COMPANY for work described as: 199906!1700!0538!AT721!NAVAL AIR SYSTEMS COMMAND !N0001998C0190 !A!*!* !19981102!20031102!053387429!045591104!001339159!N!04071!RAYTHEON E-SYSTEMS, INC !7700 ARLINGTON BLVD !FALLS CHURCH !VA!22042!27200!610!51!FALLS CHURCH !FALLS … Key points: 1. Contract awarded for applied research and development in electronics and communication equipment. 2. Significant funding allocated for research, indicating a focus on innovation and future capabilities. 3. Long contract duration suggests a sustained effort in a complex technological area. 4. Awarded to a major defense contractor with a substantial presence in the sector. 5. Contract type is Cost Plus Award Fee, allowing for flexibility and incentivizing performance. 6. Geographic location of contractor is Virginia, a hub for defense contracting.

Value Assessment

Rating: fair

The contract value of $182.5 million over a period of approximately 14 years (from 1998 to 2012) represents a significant investment in research and development. Benchmarking this against similar R&D contracts is challenging due to the specific nature of 'Electronics & Communication Eq-Applied Resea'. However, the per-year average of roughly $13 million for applied research in this domain appears within a reasonable range for complex defense technology development. The Cost Plus Award Fee (CPAF) structure implies that the final cost could vary based on performance, making a direct price comparison difficult without knowing the award fees achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of 6 bids suggests a competitive environment for this research and development effort. A healthy number of bidders generally leads to better price discovery and potentially more innovative solutions as contractors vie for the award.

Taxpayer Impact: Taxpayers benefit from full and open competition as it drives down costs and encourages the best possible solutions to be presented, ensuring that government funds are used efficiently.

Public Impact

The primary beneficiaries are the Department of the Navy and potentially other branches of the Department of Defense, gaining advanced electronics and communication capabilities. Services delivered include applied research and development, leading to technological advancements in communication systems. The geographic impact is primarily within the United States, with the contractor located in Virginia. Workforce implications include employment for scientists, engineers, and technicians involved in research and development activities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (1998-2012) could indicate potential for cost overruns or scope creep over an extended period.
Cost Plus Award Fee contracts can sometimes lead to higher overall costs if award fees are consistently maximized, even if performance is only moderately above baseline.
The specific nature of 'Applied Research' makes it inherently risky, with outcomes not always guaranteed.
The large dollar amount, while spread over many years, still represents a substantial commitment of taxpayer funds for R&D.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process and potential for value.
The contract is for Research, Development, Test, and Evaluation (RDT&E), indicating investment in future technological superiority.
The contractor, Raytheon E-Systems, is a well-established entity in the defense industry, suggesting technical expertise.
The contract has a defined period of performance, allowing for structured oversight and evaluation.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on electronics and communication equipment research and development. The North American Industry Classification System (NAICS) code 336411 (Aircraft Manufacturing) is listed, which might be a broader categorization, but the Product Service Code (PSC) 'AC62' (RDT&E/ELECTRONICS & COMMUNICATION EQ-APPLIED RESEA) is more precise. The defense electronics market is highly competitive and characterized by long development cycles and significant R&D investment. Spending in this area is crucial for maintaining technological advantage.

Small Business Impact

There is no explicit indication of small business set-asides for this contract. Given the nature of advanced R&D in electronics and communication equipment, it is likely that the prime contractor, Raytheon E-Systems, would handle the majority of the work. Subcontracting opportunities for small businesses may exist, but they are not detailed in the provided data. The absence of specific small business goals suggests this was not a primary focus for this particular R&D award.

Oversight & Accountability

The contract was awarded by the Naval Air Systems Command, which implies oversight from the Department of the Navy. As a Cost Plus Award Fee contract, performance metrics and milestones would be established, subject to review and potential award fee determination. Transparency is generally maintained for R&D contracts unless specific national security classifications are involved. Inspector General jurisdiction would apply for investigations into fraud, waste, or abuse.

Related Government Programs

Naval Air Systems Command Contracts
Department of Defense Research and Development
Electronics and Communication Equipment Procurement
Applied Research Contracts
Raytheon Company Contracts

Risk Flags

Long contract duration
Cost Plus Award Fee structure
Applied Research inherent risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $182.5 million to RAYTHEON COMPANY. 199906!1700!0538!AT721!NAVAL AIR SYSTEMS COMMAND !N0001998C0190 !A!*!* !19981102!20031102!053387429!045591104!001339159!N!04071!RAYTHEON E-SYSTEMS, INC !7700 ARLINGTON BLVD !FALLS CHURCH !VA!22042!27200!610!51!FALLS CHURCH !FALLS CHURCH (CITY) !VIRGINIA !0001!+000001000000!N!N!000000000000!AC62!RDTE/ELECTRONICS & COMMUNICATION EQ-APPLIED RESEA !C9E!ALL OTHER SUPPLIES AND EQUIPME!2000!NOT DISCERNABLE OR CLASSIFIED !8711!3!*!*!*!B!A!*!A !N!R!2!0

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 $182.5 million.

What is the period of performance?

Start: 1998-11-02. End: 2012-09-30.

What was the specific technological advancement or capability sought by the Navy through this R&D contract?

The provided data indicates the contract was for 'RDTE/ELECTRONICS & COMMUNICATION EQ-APPLIED RESEA' (Research, Development, Test, and Evaluation / Electronics & Communication Equipment - Applied Research). While the exact technological goals are not detailed, this suggests the Navy was seeking to advance the state-of-the-art in electronic systems and communication technologies. This could encompass areas such as advanced radar, secure communication systems, electronic warfare capabilities, or novel sensor technologies. The applied nature of the research implies a focus on developing practical applications and prototypes rather than purely theoretical exploration. The long duration and significant funding suggest a complex, multi-faceted research program aimed at achieving a substantial leap in capability.

How did the final cost compare to the initial estimated cost, considering the Cost Plus Award Fee structure?

The provided data does not include information on the initial estimated cost or the final incurred cost, nor does it specify the amount of award fees paid. The contract value of $182,492,851.89 represents the total obligated amount or ceiling, not necessarily the final expenditure. Under a Cost Plus Award Fee (CPAF) contract, the contractor is reimbursed for allowable costs plus a fee that is composed of a base fee and an award amount, which is earned if the contractor meets or exceeds certain performance objectives. To assess the final cost relative to estimates, one would need access to contract modification history, incurred cost reports, and the specific performance criteria and award fee determinations made throughout the contract's life.

What was Raytheon E-Systems' track record with similar R&D contracts prior to or during this period?

Raytheon E-Systems (later part of Raytheon Company) has a long history of performing complex research, development, and production contracts for the Department of Defense and other government agencies. Prior to and during the period of this contract (1998-2012), Raytheon was a major defense contractor heavily involved in areas such as radar systems, electronic warfare, command and control, and communication technologies. While specific details of their performance on analogous R&D contracts are not in this dataset, their established position in the industry suggests they possessed the necessary technical expertise, infrastructure, and experience to undertake such a significant applied research effort. Government contract databases and performance reports would offer more granular insights into their specific track record.

Were there any significant performance issues or contract disputes during the life of this contract?

The provided summary data does not contain information regarding performance issues, disputes, or contract terminations. Such details are typically found in contract performance reports, litigation records, or agency-specific contract management systems. The fact that the contract ran its full course until 2012 (with modifications extending the end date from the original 2003) might suggest that performance was generally satisfactory, or that any issues were resolved without leading to major disruptions or termination. However, without access to detailed contract administration records, it is impossible to definitively state whether performance issues occurred.

How does the annual spending on this contract compare to the overall Navy R&D budget for electronics and communication equipment during that era?

The total value of this contract is approximately $182.5 million spread over roughly 14 years (from late 1998 to late 2012). This averages to about $13 million per year. Comparing this to the Navy's overall R&D budget for electronics and communication equipment during that period requires accessing historical Navy budget documents. However, it's reasonable to assume that the Navy's total R&D spending in this critical area would be in the billions of dollars annually, encompassing numerous projects across different commands and research labs. Therefore, this single contract, while substantial, likely represented a specific, focused applied research initiative rather than a dominant share of the Navy's total investment in electronics and communication R&D.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 6

Pricing Type: COST PLUS AWARD FEE (R)

Contractor Details

Address: 7700 ARLINGTON BLVD, FALLS CHURCH, VA, 22042

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline