DoD awards Raytheon $163.7M for Guidance Control Units and Air Foil Groups, a sole-source contract
Contract Overview
Contract Amount: $163,668,822 ($163.7M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2007-12-14
End Date: 2014-03-28
Contract Duration: 2,296 days
Daily Burn Rate: $71.3K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: EPII AND EPIII GUIDANCE CONTROL UNITS (GCU) AND AIR FOIL GROUPS (AFG) INCLUDING ALL NECESSARY SOFTWARE AND TOOLS TO OPERATE AND MAINTAIN THE GCU'S AND AFG'S.
Place of Performance
Location: TUCSON, PIMA County, ARIZONA, 85756
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $163.7 million to RAYTHEON COMPANY for work described as: EPII AND EPIII GUIDANCE CONTROL UNITS (GCU) AND AIR FOIL GROUPS (AFG) INCLUDING ALL NECESSARY SOFTWARE AND TOOLS TO OPERATE AND MAINTAIN THE GCU'S AND AFG'S. Key points: 1. Contract awarded to Raytheon Company for critical defense components. 2. Sole-source award raises questions about price discovery and competition. 3. Significant contract value of over $163 million. 4. Ammunition manufacturing sector, with potential implications for military readiness.
Value Assessment
Rating: questionable
The contract value is substantial at $163.7 million. Without competitive bidding, it's difficult to assess if the pricing is optimal or reflects fair market value compared to similar defense component contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This was a sole-source award, meaning Raytheon was the only vendor considered. This significantly limits price discovery and competition, potentially leading to higher costs for taxpayers.
Taxpayer Impact: The lack of competition in this sole-source award may result in taxpayers paying a premium for these essential defense components.
Public Impact
Ensures supply of critical components for defense systems. Potential for increased costs due to sole-source nature. Lack of transparency in pricing due to limited competition. Impact on military readiness and operational capabilities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- No small business participation noted
Positive Signals
- Essential defense components
- Long-term contract potentially ensures supply stability
Sector Analysis
This contract falls within the defense sector, specifically related to ammunition manufacturing. Spending benchmarks for such specialized components are often difficult to ascertain due to proprietary technology and limited market comparisons.
Small Business Impact
The data indicates that small businesses were not involved in this contract, as it was awarded directly to Raytheon Company. There is no indication of subcontracting opportunities for small businesses.
Oversight & Accountability
Oversight for this sole-source contract would typically be managed by the Defense Contract Management Agency (DCMA). Ensuring fair pricing and performance without competition requires rigorous monitoring and justification.
Related Government Programs
- Ammunition (except Small Arms) Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award limits competition.
- Potential for inflated pricing due to lack of competition.
- No small business participation.
- Supply chain risk associated with single-source provider.
- Lack of transparency in pricing justification.
Tags
ammunition-except-small-arms-manufacturi, department-of-defense, az, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $163.7 million to RAYTHEON COMPANY. EPII AND EPIII GUIDANCE CONTROL UNITS (GCU) AND AIR FOIL GROUPS (AFG) INCLUDING ALL NECESSARY SOFTWARE AND TOOLS TO OPERATE AND MAINTAIN THE GCU'S AND AFG'S.
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 $163.7 million.
What is the period of performance?
Start: 2007-12-14. End: 2014-03-28.
What is the justification for the sole-source award, and how was the price determined to be fair and reasonable?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. Price reasonableness is often determined through cost analysis, historical pricing, or comparison to similar, albeit not identical, systems. Without access to the specific justification documentation, it's challenging to definitively assess the price determination process.
What are the risks associated with relying on a single supplier for critical defense components like GCUs and AFGs?
Relying on a single supplier creates significant risks, including supply chain vulnerability to disruptions (e.g., natural disasters, geopolitical issues, or the supplier's financial instability), potential for price gouging due to lack of competition, and reduced incentive for innovation. It also limits the government's leverage in negotiations and can impact long-term strategic planning if the supplier's priorities shift.
How does this contract contribute to the overall effectiveness and readiness of the Department of Defense?
This contract ensures the provision of Guidance Control Units and Air Foil Groups, which are likely critical components for specific weapon systems or platforms. By securing these parts, the DoD maintains the operational readiness and effectiveness of the associated military assets. The long duration and substantial value suggest these are essential, ongoing requirements for defense capabilities.
Industry Classification
NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing
Product/Service Code: AMMUNITION AND EXPLOSIVES
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1151 E HERMANS RD, TUCSON, AZ, 90
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: $163,668,822
Exercised Options: $163,668,822
Current Obligation: $163,668,822
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2007-12-14
Current End Date: 2014-03-28
Potential End Date: 2014-03-28 00:00:00
Last Modified: 2014-10-27
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