DoD awards $49.9M to Raytheon for Maverick missile guidance systems, a sole-source contract

Contract Overview

Contract Amount: $49,899,639 ($49.9M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2016-09-27

End Date: 2019-05-23

Contract Duration: 968 days

Daily Burn Rate: $51.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THIS CONTRACT IS FOR THE PRODUCTION OF LASER GUIDANCE CONTROL SYSTEMS FOR THE MAVERICK AIR TO GROUND MISSILE.

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $49.9 million to RAYTHEON COMPANY for work described as: THIS CONTRACT IS FOR THE PRODUCTION OF LASER GUIDANCE CONTROL SYSTEMS FOR THE MAVERICK AIR TO GROUND MISSILE. Key points: 1. The contract is for critical laser guidance control systems for the Maverick missile. 2. Raytheon Company is the sole awardee, indicating a lack of competition. 3. The firm fixed-price contract type aims to control costs. 4. This spending falls within the Guided Missile and Space Vehicle Manufacturing sector.

Value Assessment

Rating: fair

The contract value of $49.9M for specialized missile guidance systems appears within a reasonable range for such advanced technology. However, without specific benchmarks for comparable systems or detailed cost breakdowns, a precise value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, meaning Raytheon was the only source considered. This limits price discovery and potentially leads to higher costs than if multiple vendors had bid.

Taxpayer Impact: Taxpayers may be paying a premium due to the lack of competitive bidding, as the government did not explore alternative pricing or solutions from other manufacturers.

Public Impact

Ensures continued operational capability for the Maverick missile system. Supports a key defense contractor and its manufacturing base. Funds advanced technology development and production within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price negotiation.
Lack of transparency in cost justification for sole-source procurement.
Potential for cost overruns without competitive pressure.

Positive Signals

Firm fixed-price contract helps manage cost certainty.
Supports critical defense capabilities.
Award to established manufacturer with proven technology.

Sector Analysis

This contract is within the defense sector, specifically for guided missile manufacturing. Spending in this area is driven by national security needs and technological advancements, often involving specialized, high-cost components.

Small Business Impact

This contract was awarded directly to Raytheon Company and does not indicate any subcontracting or set-asides for small businesses. The nature of this specialized defense manufacturing often involves large prime contractors.

Oversight & Accountability

The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. However, the sole-source nature raises questions about the extent of price negotiation and justification oversight.

Related Government Programs

Guided Missile and Space Vehicle 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.
Limited transparency on cost justification.
Dependence on a single supplier for critical components.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $49.9 million to RAYTHEON COMPANY. THIS CONTRACT IS FOR THE PRODUCTION OF LASER GUIDANCE CONTROL SYSTEMS FOR THE MAVERICK AIR TO GROUND MISSILE.

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 $49.9 million.

What is the period of performance?

Start: 2016-09-27. End: 2019-05-23.

What was the justification for awarding this contract on a sole-source basis, and were alternative solutions or vendors considered?

The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one vendor can meet the requirements. Without access to the specific justification documentation, it's difficult to ascertain the precise reasons. However, the government should have explored if any other qualified vendors could have met the specifications, even if it required some development or adaptation, to ensure the best value for taxpayers.

How does the per-unit cost of these laser guidance control systems compare to similar systems procured competitively or developed internally?

Benchmarking the per-unit cost is crucial for assessing value, especially in sole-source procurements. Without access to specific cost data or comparable contract information, it's impossible to provide a definitive comparison. The government should maintain internal cost models and market research to ensure that even sole-source awards are priced reasonably relative to industry standards and historical data for similar technologies.

What measures are in place to ensure the effectiveness and reliability of these guidance systems, given the critical nature of the Maverick missile?

The Department of Defense and the Defense Contract Management Agency typically implement rigorous testing, quality assurance protocols, and performance monitoring throughout the production and delivery phases. For critical systems like missile guidance, stringent acceptance criteria and post-delivery performance evaluations are standard. Ensuring the effectiveness relies on robust oversight of Raytheon's manufacturing processes and adherence to military specifications.

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

Solicitation ID: FA821316R3008

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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: $99,799,278

Exercised Options: $99,789,278

Current Obligation: $49,899,639

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline