Raytheon Company awarded $18.6M for Ammunition Manufacturing, with limited competition

Contract Overview

Contract Amount: $18,661,244 ($18.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2010-05-20

End Date: 2012-05-31

Contract Duration: 742 days

Daily Burn Rate: $25.1K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AMMUNITION (EXCEPT SMALL ARMS) MANUFACTURING

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $18.7 million to RAYTHEON COMPANY for work described as: AMMUNITION (EXCEPT SMALL ARMS) MANUFACTURING Key points: 1. Contract awarded for ammunition manufacturing, indicating a need for specialized production capabilities. 2. The contract's fixed-price nature suggests a defined scope and potential for cost control. 3. Limited competition raises questions about price discovery and potential for higher costs. 4. The duration of the contract (742 days) suggests a medium-term supply requirement. 5. The award to Raytheon Company, a major defense contractor, aligns with industry consolidation trends. 6. The contract is categorized under 'AMMUNITION (EXCEPT SMALL ARMS) MANUFACTURING', a critical defense supply chain component.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the type and quantity of ammunition. However, the award of $18.6 million over approximately two years suggests a significant procurement. Given the limited competition, it's difficult to definitively assess if this represents optimal value for money. Further analysis would require comparing unit costs for similar ammunition types and quantities procured through more competitive means.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was not competed openly, falling under a 'NOT AVAILABLE FOR COMPETITION' category. This suggests that either only one source was capable of meeting the requirements, or there were specific circumstances (e.g., urgent need, national security) that precluded a broader competition. The lack of multiple bidders limits the government's ability to leverage market forces to achieve the best possible pricing and terms.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of robust competition, as the government did not benefit from multiple offers driving down prices.

Public Impact

The primary beneficiaries are the Department of Defense, ensuring a supply of critical ammunition. The services delivered include the manufacturing of ammunition, excluding small arms. The geographic impact is primarily within Arizona, where the contractor is located. Workforce implications include employment opportunities within Raytheon's manufacturing facilities in Arizona.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may lead to higher costs for taxpayers.
Lack of transparency in the procurement process due to non-competitive award.
Potential for contractor lock-in given the specialized nature of ammunition manufacturing.

Positive Signals

Award to a known, established defense contractor (Raytheon) suggests reliability in production.
Fixed-price contract offers some predictability in expenditure.
Contract supports a critical defense capability, ensuring national security readiness.

Sector Analysis

The ammunition manufacturing sector is a vital component of the defense industrial base. This contract falls within the broader aerospace and defense industry, which is characterized by high barriers to entry, significant R&D investment, and a concentration of large, established players like Raytheon. Spending in this sector is often driven by geopolitical factors and military readiness requirements. Comparable spending benchmarks would typically involve analyzing the total defense budget allocated to munitions procurement.

Small Business Impact

This contract does not appear to have a small business set-aside component (ss: false, sb: false). Given the specialized nature of ammunition manufacturing and the award to a large prime contractor, the direct impact on small businesses is likely minimal unless they are subcontractors. There is no explicit indication of subcontracting plans for small businesses within the provided data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and auditing functions. The Inspector General's office within the DoD would have jurisdiction to investigate any potential fraud, waste, or abuse. Transparency is limited due to the non-competitive nature of the award, making public scrutiny of the pricing and selection process more difficult.

Related Government Programs

Defense Ammunition Procurement
Ordnance Manufacturing Contracts
Department of Defense Supply Chain Management
Raytheon Company Defense Contracts

Risk Flags

Limited Competition
Lack of Detailed Scope
Potential for Cost Overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.7 million to RAYTHEON COMPANY. AMMUNITION (EXCEPT SMALL ARMS) MANUFACTURING

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 Air Force).

What is the total obligated amount?

The obligated amount is $18.7 million.

What is the period of performance?

Start: 2010-05-20. End: 2012-05-31.

What specific types and quantities of ammunition were procured under this contract?

The provided data indicates the contract is for 'AMMUNITION (EXCEPT SMALL ARMS) MANUFACTURING' (NA: 332993). However, it does not specify the exact types or quantities of ammunition. This level of detail is crucial for a comprehensive value assessment. Without this information, it's impossible to benchmark unit costs or compare the procurement to other similar acquisitions. The broad categorization suggests a range of potential ordnance, from artillery shells to mortar rounds, but precise identification is missing.

What was the justification for awarding this contract on a non-competitive basis?

The data explicitly states the contract was 'NOT AVAILABLE FOR COMPETITION' (CT: NOT AVAILABLE FOR COMPETITION). The specific justification for this determination is not provided in the data. Typically, non-competitive awards are made under circumstances such as urgent and compelling needs, sole-source capabilities of a particular contractor, or when only one responsible source exists. Understanding the precise reason is vital for assessing whether the government adequately explored competitive options and secured the best possible terms under the given constraints.

How does the pricing of this contract compare to similar ammunition procurements by the Department of Defense?

Direct price comparison is difficult without knowing the specific ammunition types and quantities. The contract value is $18.6 million over approximately 742 days (about 2 years). However, the 'NOT AVAILABLE FOR COMPETITION' status suggests that a competitive benchmark might not be directly applicable. To perform a robust comparison, one would need to identify similar contracts for the same or comparable ammunition, ideally those awarded through full and open competition, and analyze their unit prices and total values relative to the scope of work.

What is Raytheon Company's track record in fulfilling ammunition manufacturing contracts for the government?

Raytheon Company is a major defense contractor with extensive experience in various defense manufacturing sectors, including munitions. While specific details of their past performance on ammunition contracts are not in this dataset, their established presence suggests a significant capacity and history. A deeper dive into their contract history, performance ratings (e.g., CPARS), and any past issues related to quality, delivery, or cost overruns would provide a more complete picture of their reliability for this specific type of procurement.

What is the historical spending trend for 'AMMUNITION (EXCEPT SMALL ARMS) MANUFACTURING' by the Department of the Air Force?

The provided data represents a single contract award from May 20, 2010, to May 31, 2012. To understand historical spending trends, one would need to analyze aggregated spending data for this specific North American Industry Classification System (NAICS) code (332993) or similar categories over multiple fiscal years. This would involve querying federal procurement databases (like FPDS-NG or USASpending.gov) for the Department of the Air Force and potentially the broader Department of Defense to identify patterns, total outlays, and the prevalence of competitive versus non-competitive awards in this sector.

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, Federally Funded Research and Development Corp, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $18,661,244

Exercised Options: $18,661,244

Current Obligation: $18,661,244

Contract Characteristics

Cost or Pricing Data: NO

Timeline