DoD's $122.6M ROTHR O&M Services Contract Awarded to Raytheon Company Under Full and Open Competition

Contract Overview

Contract Amount: $122,658,656 ($122.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2016-05-01

End Date: 2021-04-30

Contract Duration: 1,825 days

Daily Burn Rate: $67.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF ROTHR OPERATION AND MAINTENANCE SERVICES

Place of Performance

Location: STERLING, LOUDOUN County, VIRGINIA, 20166

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $122.7 million to RAYTHEON COMPANY for work described as: IGF::OT::IGF ROTHR OPERATION AND MAINTENANCE SERVICES Key points: 1. Contract awarded to Raytheon Company for ROTHR Operation and Maintenance Services. 2. Significant value of $122.6 million over a 5-year period. 3. Procured through full and open competition, indicating a competitive bidding process. 4. Services fall under 'All Other Professional, Scientific, and Technical Services' NAICS code. 5. Contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully.

Value Assessment

Rating: fair

The Cost Plus Fixed Fee (CPFF) contract type carries inherent risk for cost overruns. While a fixed fee provides some predictability for the contractor's profit, the government bears the cost of all allowable expenses. Benchmarking CPFF contracts in this service category is challenging without detailed cost breakdowns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting multiple bidders participated. This method generally promotes price discovery and can lead to more competitive pricing. However, the CPFF structure may limit the direct impact of competition on the final cost.

Taxpayer Impact: Taxpayer funds are utilized for this contract. The competitive nature of the award is a positive sign for value, but the CPFF structure requires diligent oversight to ensure costs remain reasonable and justified.

Public Impact

Ensures continued operation and maintenance of the Relocatable Over-the-Horizon Radar (ROTHR) system, crucial for national defense and surveillance. Supports advanced technological capabilities within the Department of Defense. Potential for cost efficiencies through competitive bidding, though CPFF requires careful monitoring.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns.
Lack of specific performance metrics or KPIs in the provided data.
Potential for contractor to maximize costs within allowable expenses.

Positive Signals

Awarded through full and open competition.
Long-term contract (5 years) provides stability for critical services.
Raytheon Company is a well-established defense contractor.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically related to defense operations. Spending in this sector is substantial, driven by the need for specialized expertise and advanced technological support for government agencies, particularly the Department of Defense.

Small Business Impact

The provided data indicates that small business participation was not a stated factor in this contract award (ss: false, sb: false). This suggests the prime contractor, Raytheon Company, is likely a large business, and there is no explicit indication of subcontracting opportunities for small businesses within this specific award notice.

Oversight & Accountability

The Cost Plus Fixed Fee (CPFF) nature of this contract necessitates robust oversight from the Department of the Navy to scrutinize incurred costs, ensure compliance with contract terms, and prevent potential cost escalations. Regular audits and performance reviews are critical for accountability.

Related Government Programs

All Other Professional, Scientific, and Technical Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type.
Potential for cost overruns.
Lack of specific performance metrics in the award data.
No explicit mention of small business subcontracting goals.
Long duration (5 years) increases exposure to potential cost increases over time.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $122.7 million to RAYTHEON COMPANY. IGF::OT::IGF ROTHR OPERATION AND MAINTENANCE SERVICES

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 $122.7 million.

What is the period of performance?

Start: 2016-05-01. End: 2021-04-30.

What is the estimated total cost of the fixed fee component of this contract, and how does it compare to industry standards for similar services?

The provided data does not specify the fixed fee amount, only the contract award value and type (CPFF). To assess the fee's reasonableness, one would need to analyze the contractor's proposed fee structure against benchmarks for similar long-term, complex technical service contracts. Without this, it's difficult to determine if the fee represents fair value for the contractor's profit.

How effectively has the Department of the Navy managed cost growth on similar CPFF contracts to mitigate risks associated with this award?

Effective management of CPFF contracts hinges on stringent cost monitoring, regular audits, and clear communication channels. Agencies typically employ dedicated contract officers and financial analysts to scrutinize contractor expenditures, validate cost allowability, and negotiate any necessary adjustments. Past performance data and established internal controls would indicate the Navy's proficiency in mitigating these risks.

What are the key performance indicators (KPIs) for the ROTHR Operation and Maintenance Services, and how is contractor performance measured against them?

Key performance indicators for ROTHR O&M would likely include system uptime, radar availability, response times for maintenance, accuracy of operational data, and adherence to security protocols. Performance is typically measured through regular reporting, government inspections, user feedback, and potentially independent testing. The contract should clearly define these KPIs and the associated award-fee or incentive structures.

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: N0018915RZ064

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 22260 PACIFIC BLVD, DULLES, VA, 20166

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: $123,506,711

Exercised Options: $123,506,711

Current Obligation: $122,658,656

Actual Outlays: $3,688,046

Subaward Activity

Number of Subawards: 93

Total Subaward Amount: $19,688,709

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline