DoD's $103M ROTHR O&M contract awarded to Raytheon Technical Services Company LLC for 5 years
Contract Overview
Contract Amount: $103,210,400 ($103.2M)
Contractor: Raytheon Technical Services Company LLC
Awarding Agency: Department of Defense
Start Date: 2011-06-23
End Date: 2016-07-31
Contract Duration: 1,865 days
Daily Burn Rate: $55.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: ROTHR O&M FFP SERVICES
Place of Performance
Location: STERLING, LOUDOUN County, VIRGINIA, 20166
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $103.2 million to RAYTHEON TECHNICAL SERVICES COMPANY LLC for work described as: ROTHR O&M FFP SERVICES Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Firm Fixed Price (FFP), which shifts cost risk to the contractor. 3. The contract duration of 1865 days (over 5 years) indicates a long-term need for these services. 4. The contract was awarded to a single vendor, Raytheon Technical Services Company LLC. 5. The North American Industry Classification System (NAICS) code 541990 points to 'All Other Professional, Scientific, and Technical Services'. 6. The contract value of approximately $103.2 million over five years suggests significant operational and maintenance requirements. 7. The contract was awarded by the Department of Defense, managed by the Defense Contract Management Agency. 8. The contract was awarded as a Definitive Contract, typically used for larger, more complex requirements.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging without specific performance metrics or comparable service contracts. However, a $103 million contract over five years for O&M services suggests a substantial investment. The Firm Fixed Price (FFP) structure aims to control costs, but the actual value for money depends on the contractor's efficiency and the effectiveness of the services provided. Without detailed cost breakdowns or performance data, a definitive assessment of value is difficult.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. The presence of two bids suggests a degree of competition, though the exact number of interested parties and the rigor of the evaluation process are not detailed. A competitive process generally helps in achieving fair market prices and encourages contractors to offer their best value.
Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure services at the most advantageous price. Full and open competition increases the likelihood that the government is not overpaying for necessary services.
Public Impact
The primary beneficiaries are the Department of Defense, which receives essential operational and maintenance services for its systems. The services delivered likely ensure the continued functionality and readiness of specific defense-related infrastructure or equipment. The geographic impact is likely concentrated within the operational areas of the ROTHR system, potentially global or specific regional deployments. Workforce implications could include employment for technical personnel, engineers, and support staff employed by Raytheon Technical Services Company LLC and its subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of detailed performance metrics makes it difficult to assess the true value for money.
- The long duration of the contract could lead to vendor lock-in if not managed carefully.
- Limited information on the specific technical services provided hinders a deeper analysis of the contract's necessity and scope.
- The absence of small business subcontracting details raises questions about broader economic impact.
- The specific nature of 'ROTHR O&M' is not fully elaborated, making it hard to gauge the criticality and complexity.
Positive Signals
- Awarded through full and open competition, suggesting a fair and transparent procurement process.
- Firm Fixed Price (FFP) contract type transfers cost overrun risk to the contractor.
- The contract is managed by the Defense Contract Management Agency, indicating established oversight.
- The long-term nature of the contract suggests a stable and ongoing requirement for critical services.
- Raytheon Technical Services Company LLC is a known entity in defense contracting, implying a level of established capability.
Sector Analysis
The contract falls within the professional, scientific, and technical services sector, specifically related to defense operations and maintenance. This sector is characterized by specialized expertise and often involves long-term support for complex government systems. Spending in this area is crucial for maintaining national security infrastructure and operational readiness. Comparable spending benchmarks would typically involve other O&M contracts for large-scale defense systems, which can range from tens to hundreds of millions of dollars depending on the system's complexity and scope.
Small Business Impact
This contract does not indicate any specific small business set-aside provisions (ss: false, sb: false). Therefore, the primary contractor, Raytheon Technical Services Company LLC, is likely a large business. The implications for small businesses would depend on subcontracting opportunities offered by the prime contractor. Without explicit subcontracting plans or goals detailed in the award, it's difficult to assess the extent to which small businesses will participate in or benefit from this contract.
Oversight & Accountability
Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. As a definitive contract awarded by the Department of Defense, it would also be subject to internal DoD oversight mechanisms and potentially the Government Accountability Office (GAO) for protests or audits. Transparency is facilitated through contract databases like FPDS, but detailed operational performance data may be considered sensitive.
Related Government Programs
- Defense Operations and Maintenance
- Radar Systems Support
- Technical Services Contracts
- Department of Defense Procurement
- Long-Term Service Agreements
Risk Flags
- Potential for cost creep if contractor efficiency is low under FFP.
- Risk of technological obsolescence over the contract's 5-year duration.
- Dependency on a single contractor for critical O&M services.
- Limited transparency into specific performance metrics and value realization.
Tags
defense, department-of-defense, raytheon-technical-services-company-llc, definitive-contract, firm-fixed-price, full-and-open-competition, operations-and-maintenance, professional-scientific-and-technical-services, naics-541990, virginia, long-term-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $103.2 million to RAYTHEON TECHNICAL SERVICES COMPANY LLC. ROTHR O&M FFP SERVICES
Who is the contractor on this award?
The obligated recipient is RAYTHEON TECHNICAL SERVICES COMPANY LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $103.2 million.
What is the period of performance?
Start: 2011-06-23. End: 2016-07-31.
What is the specific nature of the ROTHR system and its operational requirements that necessitate this O&M contract?
ROTHR stands for Relocatable Over-the-Horizon Radar. These systems are designed for long-range surveillance and detection of airborne and surface targets, often used for border security, drug interdiction, and missile defense. The operational and maintenance (O&M) requirements for such sophisticated radar systems are extensive, involving regular calibration, repair of electronic components, software updates, site maintenance, power management, and ensuring overall system readiness. The 'All Other Professional, Scientific, and Technical Services' NAICS code suggests a broad range of support activities, from engineering services to field maintenance and logistical support, crucial for maintaining the system's continuous operational capability over its lifespan.
How does the Firm Fixed Price (FFP) structure impact the cost-effectiveness and risk for this contract?
The Firm Fixed Price (FFP) contract structure places the primary responsibility for cost control and risk management on the contractor, Raytheon Technical Services Company LLC. This means that the contractor is obligated to perform the specified work for the agreed-upon price, regardless of unforeseen cost increases. For the government, this offers cost certainty and protection against cost overruns. However, it also means that the contractor must accurately estimate all costs upfront. If the contractor underestimates costs or encounters significant unexpected issues, their profit margin will decrease, potentially leading to pressure to cut corners on quality or service if not adequately monitored. Conversely, if the contractor is highly efficient, they can achieve a higher profit.
What is the historical spending pattern for ROTHR O&M services, and how does this $103M contract compare?
Analyzing historical spending requires access to detailed procurement data over multiple years. Assuming this $103 million contract covers approximately five years of O&M for ROTHR, the average annual spending would be around $20.6 million. Without specific historical data for this contract or similar ROTHR O&M efforts, it's difficult to definitively state if this represents an increase, decrease, or stable spending trend. However, the significant value suggests a consistent and substantial requirement for maintaining these long-range radar systems. Future analysis could involve comparing this annual average to previous contract values for ROTHR O&M or similar radar systems to identify trends in cost and scope.
What are the potential risks associated with a long-term (1865-day) contract for O&M services?
Long-term contracts, like this 1865-day (over 5 years) agreement, carry several potential risks. One primary risk is 'vendor lock-in,' where the government becomes heavily reliant on a single provider, making it difficult and costly to switch contractors even if performance declines or better alternatives emerge. Another risk is technological obsolescence; the services or equipment supported might become outdated during the contract's term, requiring costly modifications or renegotiations. Furthermore, contractor performance can degrade over time, especially if incentives for continuous improvement are weak. Finally, long-term FFP contracts can sometimes lead to complacency if the contractor feels their position is secure, necessitating robust performance monitoring by the government.
How does the 'All Other Professional, Scientific, and Technical Services' classification impact the understanding of this contract's scope?
The NAICS code 541990, 'All Other Professional, Scientific, and Technical Services,' is a broad category used when a business activity does not fit into any other specific service category. For this contract, it implies that the services provided by Raytheon Technical Services Company LLC are diverse and encompass a range of professional, scientific, and technical support activities related to the ROTHR system. This could include engineering analysis, system integration, technical consulting, research and development support, specialized testing, and field support services. The broad classification means the specific deliverables might be varied and tailored to the evolving needs of the ROTHR system's operation and maintenance, rather than a narrowly defined set of tasks.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services
Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0018911RZ009
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Raytheon Company (UEI: 001339159)
Address: 22265 PACIFIC BLVD, STERLING, VA, 20166
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $109,398,767
Exercised Options: $103,488,057
Current Obligation: $103,210,400
Actual Outlays: $1
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2011-06-23
Current End Date: 2016-07-31
Potential End Date: 2016-07-31 00:00:00
Last Modified: 2021-07-26
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