DoD Awards $841M for Guided Missile Subsystems to Raytheon/Lockheed Martin JV

Contract Overview

Contract Amount: $1,582,502,494 ($1.6B)

Contractor: Raytheon/Lockheed Martin Javelin JV

Awarding Agency: Department of Defense

Start Date: 2000-08-07

End Date: 2008-04-30

Contract Duration: 2,823 days

Daily Burn Rate: $560.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200012!2100!002537!AH01 !USA AVIATION AND MISSILE COMMAND!DAAH0100C0108 !A!*!* !20000807!20060306!841484082!841484082!841484082!N!0FCZ3!RAYTHEON LOCKHEED MARTIN !6925 LAKE ELLENOR DRIVE !ORLANDO !FL!32809!77000!019!04!TUCSON !PIMA !ARIZONA !0001!+000383705320!N!Y!001236098133!1427!GUIDED MISSILE SUBSYSTEMS !S1 !SERVICES !1000!NOT DISCERNABLE OR CLASSIFIED !8731!3!*!*!*!B!A!*!D !Y!J!1!001!N!1A!A!Y!F!* !* !N!C!*!A!A!A!A!A!A!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $1.58 billion to RAYTHEON/LOCKHEED MARTIN JAVELIN JV for work described as: 200012!2100!002537!AH01 !USA AVIATION AND MISSILE COMMAND!DAAH0100C0108 !A!*!* !20000807!20060306!841484082!841484082!841484082!N!0FCZ3!RAYTHEON LOCKHEED MARTIN !6925 LAKE ELLENOR DRIVE !ORLANDO !FL!32809!77000!019!04!TUCSON !PIMA !ARIZONA !0001!+000383705320!N!Y!001236098133!142… Key points: 1. Contract awarded for Guided Missile Subsystems, a critical defense component. 2. Raytheon/Lockheed Martin Javelin JV is the sole awardee, raising competition concerns. 3. Significant taxpayer investment of over $841 million over nearly 8 years. 4. The sector is Guided Missile and Space Vehicle Manufacturing, a specialized defense industry.

Value Assessment

Rating: questionable

The contract value of $841,484,082 is substantial. Without comparable contracts or detailed cost breakdowns, it's difficult to assess if this represents fair pricing. The lack of competition further complicates value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating a lack of competitive bidding. This significantly limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: The sole-source nature of this large contract raises concerns about potential overspending of taxpayer funds due to the absence of competitive pressure.

Public Impact

National security implications due to reliance on a single provider for critical missile subsystems. Potential for increased defense costs if competitive pricing mechanisms are not employed. Impact on innovation and technological advancement if alternative solutions are not explored.

Waste & Efficiency Indicators

Waste Risk Score: 56 / 10

Warning Flags

Sole-source award limits competition
Long contract duration (nearly 8 years)
High contract value

Positive Signals

Award to established defense contractors
Focus on critical defense capabilities

Sector Analysis

This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a highly specialized area of defense industrial base. Spending in this sector is often characterized by long development cycles and significant R&D investment.

Small Business Impact

The contract was awarded to a joint venture of major defense contractors, Raytheon and Lockheed Martin. There is no indication that small businesses were involved as prime contractors or significant subcontractors in this specific award.

Oversight & Accountability

The sole-source nature of this contract warrants close oversight to ensure fair pricing and performance. Accountability mechanisms should be robust given the significant taxpayer investment and lack of competition.

Related Government Programs

Guided Missile and Space Vehicle Manufacturing
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Lack of competition
Potential for cost overruns
Long-term vendor lock-in
Limited transparency in pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.58 billion to RAYTHEON/LOCKHEED MARTIN JAVELIN JV. 200012!2100!002537!AH01 !USA AVIATION AND MISSILE COMMAND!DAAH0100C0108 !A!*!* !20000807!20060306!841484082!841484082!841484082!N!0FCZ3!RAYTHEON LOCKHEED MARTIN !6925 LAKE ELLENOR DRIVE !ORLANDO !FL!32809!77000!019!04!TUCSON !PIMA !ARIZONA !0001!+000383705320!N!Y!001236098133!1427!GUIDED MISSILE SUBSYSTEMS !S1 !SERVICES !1000!NOT DISCERNABLE OR CLASSIFIED !8731!3!*!*!*!B!A!*!D !Y!J!1!001!N!1A!A!Y!F!* !* !N!C!*!A!A!A!A!A!A!* !*!N!A!C!N!*!*!*!*!*!

Who is the contractor on this award?

The obligated recipient is RAYTHEON/LOCKHEED MARTIN JAVELIN JV.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $1.58 billion.

What is the period of performance?

Start: 2000-08-07. End: 2008-04-30.

What is the justification for the sole-source award, and were any attempts made to foster competition?

The data indicates a 'NOT COMPETED' status, suggesting a sole-source justification was applied. Without further details, it's unclear if alternative sources were considered or if specific technological requirements necessitated this approach. Future solicitations should prioritize competitive strategies to ensure best value.

How does the per-unit cost of these guided missile subsystems compare to industry benchmarks or previous contracts?

The provided data does not include per-unit cost information or allow for direct comparison to benchmarks. The total contract value of $841 million over nearly eight years, awarded sole-source, makes a precise value assessment challenging without detailed cost analysis and market research.

What are the long-term strategic implications of relying on a single JV for these critical missile subsystems?

Long-term reliance on a single provider can create vulnerabilities in the supply chain and reduce negotiating leverage. It may also stifle innovation from potential competitors. The DoD should consider strategies to ensure a robust and competitive industrial base for critical defense components.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Raytheon Company (UEI: 001339159)

Address: 1151 E HERMANS RD BLDG 80, TUCSON, AZ, 85706

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline