DoD Awards Raytheon $48.4M for Land-Based Phalanx Weapon System Services
Contract Overview
Contract Amount: $48,416,734 ($48.4M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2023-12-22
End Date: 2025-07-31
Contract Duration: 587 days
Daily Burn Rate: $82.5K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: FUNCTIONAL SERVICES FOR LAND-BASED PHALANX WEAPON SYSTEM (LPWS).
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35898
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $48.4 million to RAYTHEON COMPANY for work described as: FUNCTIONAL SERVICES FOR LAND-BASED PHALANX WEAPON SYSTEM (LPWS). Key points: 1. Significant contract for critical defense system maintenance. 2. Sole-source award to Raytheon raises competition concerns. 3. Potential for cost overruns with Cost Plus Fixed Fee contract type. 4. Long-term support contract impacting defense sector spending.
Value Assessment
Rating: fair
The contract value of $48.4M for engineering services is substantial. Without comparable contracts or detailed cost breakdowns, assessing its pricing against similar services is difficult. The Cost Plus Fixed Fee structure warrants close monitoring for efficiency.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Raytheon. This lack of competition limits price discovery and may result in higher costs for the government compared to a competitive bidding process.
Taxpayer Impact: The sole-source nature of this award means taxpayers may not be receiving the best possible price for these essential engineering services.
Public Impact
Ensures continued operational readiness of the Land-Based Phalanx Weapon System. Supports advanced defense technology and national security. Potential impact on future defense procurement strategies due to sole-source award.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- Cost Plus Fixed Fee contract type can incentivize higher costs.
- Long contract duration (587 days) increases exposure to price changes.
Positive Signals
- Essential services for a critical weapon system.
- Awarded to a known incumbent provider with expertise.
Sector Analysis
This contract falls within the Engineering Services sector, specifically supporting defense systems. Spending benchmarks for similar specialized weapon system support can vary widely, but large sole-source contracts often warrant scrutiny.
Small Business Impact
The data indicates this contract was not awarded to small businesses, as the prime contractor is Raytheon Company. There is no information provided on subcontracting opportunities for small businesses.
Oversight & Accountability
The Department of the Army is the awarding agency. Oversight will be crucial to ensure cost control and performance under the Cost Plus Fixed Fee contract, especially given the sole-source nature of the award.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Lack of competition
- Potential for cost overruns
- Long contract duration
Tags
engineering-services, department-of-defense, al, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $48.4 million to RAYTHEON COMPANY. FUNCTIONAL SERVICES FOR LAND-BASED PHALANX WEAPON SYSTEM (LPWS).
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 Army).
What is the total obligated amount?
The obligated amount is $48.4 million.
What is the period of performance?
Start: 2023-12-22. End: 2025-07-31.
What is the justification for the sole-source award, and what steps are being taken to ensure fair pricing?
The justification for a sole-source award typically involves unique capabilities or proprietary technology held by the incumbent. To ensure fair pricing, the government should conduct thorough cost analyses, benchmark against historical data, and negotiate aggressively. Regular performance reviews and audits are also essential to monitor expenditures and prevent cost overruns under the Cost Plus Fixed Fee structure.
What are the potential risks associated with a Cost Plus Fixed Fee contract for this type of service?
Cost Plus Fixed Fee (CPFF) contracts carry risks for the government, primarily the potential for cost overruns. While the fixed fee provides some incentive for the contractor to control costs, the government bears the risk of increased direct costs. This structure can lead to less cost-consciousness compared to fixed-price contracts, potentially resulting in higher overall spending if not managed diligently through robust oversight and auditing.
How does this sole-source award impact the long-term competitive landscape for Land-Based Phalanx Weapon System support?
A sole-source award can stifle competition by reinforcing the incumbent's market position and potentially creating barriers to entry for other firms. Over time, this can lead to reduced innovation and higher prices. The Department of Defense should consider strategies to foster competition for future support contracts, perhaps through modularization of services or by actively seeking out and qualifying alternative providers.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Rockwell Collins Australia PTY Limited
Address: 1151 E HERMANS RD, TUCSON, AZ, 85756
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: $48,416,734
Exercised Options: $48,416,734
Current Obligation: $48,416,734
Subaward Activity
Number of Subawards: 3
Total Subaward Amount: $1,098,070
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W31P4Q19D0015
IDV Type: IDC
Timeline
Start Date: 2023-12-22
Current End Date: 2025-07-31
Potential End Date: 2025-07-31 12:07:00
Last Modified: 2025-05-28
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