Raytheon Awarded $794.6M for Guided Missile Subsystems, Sole-Source Contract Raises Oversight Concerns

Contract Overview

Contract Amount: $91,197,025 ($91.2M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2003-12-12

End Date: 2011-09-17

Contract Duration: 2,836 days

Daily Burn Rate: $32.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200403!000036!5700!GE45 !OO-ALC/PKW/WMK !FA821304C0007 !A!N! !N! ! !20031212!20051230!794598573!794598573!001339159!N!RAYTHEON COMPANY !1151 EAST HERMANS ROAD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA !ARIZONA !+000045599826!N!N!000000000000!1427!GUIDED MISSILE SUBSYSTEMS !A6 !AMMUNITION !000 !* !336414!E! !3! ! ! ! ! !99990909!B! ! !A! !D!U!J!1!001!N!1A!A!Y!F! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! !Y! ! !0001! !

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $91.2 million to RAYTHEON COMPANY for work described as: 200403!000036!5700!GE45 !OO-ALC/PKW/WMK !FA821304C0007 !A!N! !N! ! !20031212!20051230!794598573!794598573!001339159!N!RAYTHEON COMPANY !1151 EAST HERMANS ROAD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA… Key points: 1. Significant contract value for missile subsystems. 2. Sole-source award limits competition and potentially impacts price discovery. 3. Long contract duration (2003-2011) warrants review of ongoing necessity. 4. Defense sector spending on advanced weaponry is substantial.

Value Assessment

Rating: questionable

The contract value of $794.6 million over its duration is substantial. Without competitive bidding, it's difficult to benchmark against similar contracts to assess if the pricing is optimal.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source award. This limits price discovery and may lead to higher costs for taxpayers compared to a competitive environment.

Taxpayer Impact: The lack of competition in this large contract could result in taxpayers paying a premium for guided missile subsystems.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. National security implications of relying on a single source for critical missile components. Potential for reduced innovation if competition is stifled.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Long contract duration
Lack of transparency in pricing

Positive Signals

Essential defense procurement
Established contractor

Sector Analysis

This contract falls within the Defense sector, specifically for guided missile subsystems. Defense spending on advanced weaponry is a significant portion of the federal budget, with contracts often being complex and high-value.

Small Business Impact

The data does not indicate any specific provisions or participation by small businesses in this contract. Further analysis would be needed to determine small business impact.

Oversight & Accountability

The sole-source nature of this contract warrants close oversight to ensure fair pricing and prevent potential cost overruns. Accountability for the justification of the sole-source award is crucial.

Related Government Programs

Guided Missile and Space Vehicle Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Sole-source award lacks competitive pressure.
Extended contract duration may not reflect current needs or technology.
Potential for cost overruns without competitive benchmarking.
Limited transparency on pricing justification.
Reliance on a single contractor for critical defense components.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $91.2 million to RAYTHEON COMPANY. 200403!000036!5700!GE45 !OO-ALC/PKW/WMK !FA821304C0007 !A!N! !N! ! !20031212!20051230!794598573!794598573!001339159!N!RAYTHEON COMPANY !1151 EAST HERMANS ROAD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA !ARIZONA !+000045599826!N!N!000000000000!1427!GUIDED MISSILE SUBSYSTEMS !A6 !AMMUNITION !000 !* !336414!E! !3! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $91.2 million.

What is the period of performance?

Start: 2003-12-12. End: 2011-09-17.

What was the justification for awarding this contract on a sole-source basis, and was it adequately documented?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or lack of viable alternatives. Without access to the specific contract file, it's impossible to confirm the exact justification or its adequacy. However, the absence of competition inherently raises questions about whether alternatives were thoroughly explored and documented.

How does the final price compare to initial estimates or industry benchmarks, given the lack of competition?

Without competitive bids, a direct price comparison is challenging. The government relies on negotiation and cost analysis to ensure fair pricing in sole-source contracts. A thorough review of the contractor's cost proposals and independent government cost estimates would be necessary to assess value for money.

What measures are in place to ensure the ongoing effectiveness and necessity of these guided missile subsystems throughout the contract's long duration?

For long-duration sole-source contracts, ongoing oversight is critical. This includes regular performance reviews, technical assessments of the evolving threat landscape, and ensuring the technology remains relevant. Periodic re-evaluations of the need for these specific subsystems and potential for competitive re-solicitation should be considered.

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

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 1151 EAST HERMANS ROAD, TUCSON, AZ, 90

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline