Raytheon Company awarded $147.5M for ROTHR Operations Maintenance Services by the Department of the Navy

Contract Overview

Contract Amount: $147,541,311 ($147.5M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2021-05-01

End Date: 2026-04-30

Contract Duration: 1,825 days

Daily Burn Rate: $80.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: ROTHR OPERATIONS MAINTENANCE SERVICES

Place of Performance

Location: CHESAPEAKE, CHESAPEAKE CITY County, VIRGINIA, 23322

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $147.5 million to RAYTHEON COMPANY for work described as: ROTHR OPERATIONS MAINTENANCE SERVICES Key points: 1. Contract value of $147.5M over five years suggests significant investment in maintaining critical radar systems. 2. The contract was awarded under full and open competition, indicating a potentially competitive bidding process. 3. The use of a Cost Plus Award Fee (CPAF) contract type allows for performance-based incentives. 4. The duration of 1825 days (5 years) points to a long-term need for these specialized services. 5. The primary contractor, Raytheon Company, is a major defense contractor with extensive experience in similar services. 6. The contract falls under 'All Other Professional, Scientific, and Technical Services,' a broad category.

Value Assessment

Rating: good

The contract value of $147.5 million over five years for ROTHR Operations Maintenance Services appears reasonable given the specialized nature of maintaining complex radar systems for the Department of Defense. Benchmarking against similar long-term, high-value defense maintenance contracts suggests this level of investment is within expected parameters. The Cost Plus Award Fee (CPAF) structure allows for potential cost savings if performance targets are met, which is a positive indicator for value for money. However, without specific performance metrics and award fee payouts, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple qualified vendors had the opportunity to bid. The fact that it was competed openly is a positive sign for price discovery and potentially achieving a competitive price. The number of bidders is not specified, but the open competition framework generally leads to a more robust market response compared to sole-source or limited solicitations. This approach aims to ensure the government receives the best value by leveraging the widest possible pool of capable contractors.

Taxpayer Impact: Taxpayers benefit from full and open competition as it typically drives down costs through market forces. This process increases the likelihood of securing services at a fair and reasonable price, maximizing the return on public funds invested in national defense infrastructure.

Public Impact

The primary beneficiaries are the Department of the Navy and the broader Department of Defense, ensuring the continued operational readiness of the Relocatable Over-the-Horizon Radar (ROTHR) system. The services delivered include essential operations and maintenance, crucial for the functionality and longevity of advanced radar technology. The geographic impact is likely concentrated around ROTHR system locations, which are strategically important for surveillance and early warning. Workforce implications include the employment of skilled technicians, engineers, and support staff required for the operation and upkeep of sophisticated electronic systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The CPAF contract type, while incentivizing, can lead to higher base costs compared to fixed-price contracts if not managed carefully.
The broad 'All Other Professional, Scientific, and Technical Services' category makes it difficult to pinpoint specific cost drivers without further detail.
Long-term contracts can sometimes reduce flexibility to adapt to rapidly changing technological requirements or market conditions.

Positive Signals

Awarded under full and open competition, indicating a competitive process that should yield fair pricing.
The CPAF structure includes award fees tied to performance, encouraging high-quality service delivery.
The contractor, Raytheon Company, possesses significant experience in defense systems maintenance, suggesting a high likelihood of successful execution.
The five-year duration provides stability for both the government and the contractor, ensuring consistent service delivery.

Sector Analysis

The defense sector, particularly within the intelligence, surveillance, and reconnaissance (ISR) domain, relies heavily on advanced radar technologies like ROTHR. The market for operations and maintenance services for such specialized systems is typically dominated by large, established defense contractors. Spending in this area is driven by national security requirements and the need to maintain a technological edge. Comparable spending benchmarks would involve other long-term service contracts for complex electronic warfare or radar systems, often running into tens or hundreds of millions of dollars over their lifecycle.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor, Raytheon Company, is a large defense corporation. While large prime contractors are often required to subcontract portions of their work to small businesses, the specific subcontracting plan for this contract is not detailed here. The absence of a set-aside suggests that the primary focus was on securing the most capable provider through open competition, rather than specifically targeting small business participation at the prime contract level.

Oversight & Accountability

Oversight for this contract is likely managed by the Department of the Navy's contracting and program management offices. The Cost Plus Award Fee (CPAF) structure inherently involves performance monitoring to determine award fee payouts, providing a degree of oversight. Transparency is facilitated by the contract's public award data. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse, as is standard for all federal contracts. Specific performance metrics and reporting requirements within the contract would further define the accountability measures.

Related Government Programs

Defense Radar Systems Maintenance
Intelligence, Surveillance, and Reconnaissance (ISR) Services
Department of Defense Operations and Maintenance Contracts
Raytheon Company Defense Contracts
Naval Electronic Systems Support

Risk Flags

Contract type complexity (CPAF)
Broad service category (NAICS 541990)
Lack of specific performance metric details

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $147.5 million to RAYTHEON COMPANY. ROTHR OPERATIONS 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 $147.5 million.

What is the period of performance?

Start: 2021-05-01. End: 2026-04-30.

What is the historical spending pattern for ROTHR operations and maintenance services?

Historical spending data for ROTHR operations and maintenance services prior to this $147.5 million award is not explicitly provided in the given data. However, the five-year duration and substantial value of this contract suggest a consistent and significant requirement for these services over time. Typically, such critical systems require ongoing investment for maintenance, upgrades, and operational support. To understand historical patterns, one would need to examine previous contracts awarded for ROTHR maintenance, potentially looking at contract vehicles, durations, and values awarded to Raytheon or other contractors over the system's lifecycle. This would reveal trends in annual spending and identify any significant shifts in investment.

How does the Cost Plus Award Fee (CPAF) structure typically impact contractor performance and cost control for services like ROTHR maintenance?

The Cost Plus Award Fee (CPAF) contract structure is designed to incentivize contractor performance by allowing the contractor to recover all allowable costs plus a base fee, with an additional award fee determined by the government based on performance against defined criteria. For ROTHR maintenance, this means Raytheon is motivated to not only perform the required tasks but to exceed expectations in areas like system uptime, response times, and efficiency to earn higher award fees. This can lead to better service quality and reliability. However, CPAF contracts can also be more complex to administer and may result in higher overall costs compared to fixed-price contracts if the award fee criteria are not tightly managed or if costs escalate unexpectedly. Effective government oversight is crucial to ensure that award fees are justified by exceptional performance and that costs remain reasonable.

What are the specific performance metrics used to determine the award fee for Raytheon under this ROTHR contract?

The specific performance metrics used to determine the award fee for Raytheon under this ROTHR Operations Maintenance Services contract are not detailed in the provided summary data. Typically, for a CPAF contract of this nature, performance metrics would be outlined in the contract's Performance Work Statement (PWS) or a separate Performance Requirements Summary (PRS). These metrics often include factors such as system availability and reliability (e.g., percentage of uptime), response times to maintenance requests or system failures, quality of maintenance performed (e.g., adherence to technical orders), successful completion of scheduled maintenance, and potentially cost-saving initiatives proposed by the contractor. The government's Contracting Officer's Representative (COR) would be responsible for monitoring these metrics and recommending the award fee amount.

What is Raytheon Company's track record with similar large-scale defense maintenance and operations contracts?

Raytheon Company, now part of RTX, has an extensive and well-established track record in providing large-scale defense maintenance and operations services, particularly in areas involving complex electronic systems, radar, and command and control. They are a major prime contractor for the U.S. Department of Defense and other government agencies, managing numerous contracts that involve sustainment, logistics, technical support, and system integration. Their experience spans decades and includes work on various radar platforms, missile defense systems, and communication networks. This extensive background suggests a high level of capability and familiarity with the requirements, challenges, and oversight associated with contracts like the ROTHR Operations Maintenance Services award, positioning them as a reliable choice for such critical functions.

How does the 'All Other Professional, Scientific, and Technical Services' (NAICS 541990) classification impact the understanding of this contract's scope and value?

The classification under NAICS code 541990, 'All Other Professional, Scientific, and Technical Services,' indicates that this contract encompasses a broad range of services that do not fit into more specific categories. For ROTHR Operations Maintenance Services, this likely includes a mix of engineering support, technical consulting, system diagnostics, specialized repair, logistical support, and potentially research and development related to maintaining and improving the radar system's functionality. While this broad classification allows for flexibility in service delivery, it can also make it challenging to benchmark costs precisely against more narrowly defined service contracts. The $147.5 million value over five years, when viewed within this broad category, suggests a significant and complex undertaking requiring diverse expertise.

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: N0018920RZ017

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

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: $152,133,542

Exercised Options: $152,133,542

Current Obligation: $147,541,311

Subaward Activity

Number of Subawards: 43

Total Subaward Amount: $12,740,732

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline