Raytheon awarded $48.2M for AMRAAM production and repair, with no competition

Contract Overview

Contract Amount: $48,192,957 ($48.2M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2025-09-12

End Date: 2029-12-11

Contract Duration: 1,551 days

Daily Burn Rate: $31.1K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ADVANCED MEDIUM-RANGE AIR-TO-AIR MISSILE (AMRAAM) PRODUCTION AND REPAIR LINES SEPARATION.

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $48.2 million to RAYTHEON COMPANY for work described as: ADVANCED MEDIUM-RANGE AIR-TO-AIR MISSILE (AMRAAM) PRODUCTION AND REPAIR LINES SEPARATION. Key points: 1. Contract awarded to Raytheon Company for advanced medium-range air-to-air missile (AMRAAM) production and repair. 2. The contract is structured as a Cost Plus Fixed Fee (CPFF) type. 3. This award represents a significant investment in critical defense missile systems. 4. The contract duration spans over 4 years, indicating a long-term need. 5. The geographic location for performance is Arizona. 6. The North American Industry Classification System (NAICS) code is 336414, pertaining to Guided Missile and Space Vehicle Manufacturing.

Value Assessment

Rating: questionable

As a sole-source award for a specialized defense item, direct value-for-money comparisons are challenging. The CPFF structure can incentivize cost overruns if not closely monitored. Benchmarking against similar sole-source missile production contracts would be necessary to assess pricing reasonableness, but such data is often proprietary or classified. Without competitive pressure, the potential for inflated costs is a concern.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Raytheon Company. The absence of competition means that pricing and terms were likely negotiated directly with the incumbent provider. This approach is typically used when only one source can fulfill the requirement, often due to proprietary technology or existing infrastructure.

Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the lack of competitive bidding. Without alternative offers, there is a risk of paying a premium for the goods and services.

Public Impact

The primary beneficiaries are the U.S. Air Force and potentially other Department of Defense branches requiring advanced air-to-air missile capabilities. The contract ensures the continued production and repair of AMRAAM missiles, vital for air superiority. Geographic impact is concentrated in Arizona, where the contractor will perform the work, potentially supporting local jobs. Workforce implications include the need for skilled labor in advanced manufacturing and missile systems maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Cost Plus Fixed Fee contract type can lead to cost overruns if not rigorously managed.
Lack of competition raises concerns about innovation and efficiency improvements.
Long contract duration without competitive milestones may reduce contractor urgency for cost savings.

Positive Signals

Ensures continued availability of a critical defense asset (AMRAAM).
Award to an established contractor with demonstrated experience in missile production.
Supports domestic manufacturing capabilities for advanced defense systems.
Provides long-term stability for production and repair lines.

Sector Analysis

The Guided Missile and Space Vehicle Manufacturing sector is a highly specialized and critical component of the defense industrial base. Companies like Raytheon are key players, often holding proprietary technologies and significant production capacity. Spending in this sector is driven by national security requirements and technological advancements in defense systems. Comparable spending benchmarks are difficult to ascertain due to the classified nature of many defense programs and the unique specifications of advanced weaponry.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there explicit information regarding subcontracting opportunities for small businesses. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless Raytheon actively engages small businesses for specific components or services not covered by the prime contract.

Oversight & Accountability

Oversight for this contract will likely fall under the Department of Defense's contracting and program management offices. Accountability measures would be tied to the Cost Plus Fixed Fee structure, requiring detailed cost reporting and performance metrics. Transparency may be limited due to the classified nature of the end-product and the sole-source award process. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse.

Related Government Programs

Advanced Medium-Range Air-to-Air Missile (AMRAAM) Program
Department of Defense Missile Procurement
Guided Missile Manufacturing Contracts
Air Force Weapon Systems Support

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $48.2 million to RAYTHEON COMPANY. ADVANCED MEDIUM-RANGE AIR-TO-AIR MISSILE (AMRAAM) PRODUCTION AND REPAIR LINES SEPARATION.

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 $48.2 million.

What is the period of performance?

Start: 2025-09-12. End: 2029-12-11.

What is Raytheon Company's track record with AMRAAM production and repair?

Raytheon Company, now RTX, has been the sole producer of the Advanced Medium-Range Air-to-Air Missile (AMRAAM) for decades. They have a long-standing history of manufacturing, delivering, and supporting these critical air-to-air weapon systems for the U.S. Air Force, Navy, and numerous international partners. Their experience encompasses multiple variants and upgrades of the AMRAAM, demonstrating a deep understanding of the missile's complex engineering, production processes, and sustainment requirements. Past performance reviews and delivery records, though often not publicly detailed for specific contracts, generally indicate a consistent ability to meet production schedules and technical specifications for this platform.

How does the Cost Plus Fixed Fee (CPFF) contract structure compare to other pricing arrangements for missile production?

The Cost Plus Fixed Fee (CPFF) structure is a common, albeit complex, pricing arrangement in defense contracting, particularly for research, development, and specialized production where costs can be uncertain. In a CPFF contract, the contractor is reimbursed for allowable costs plus a predetermined fixed fee representing profit. This differs from Firm-Fixed-Price (FFP) contracts, where the contractor agrees to a set price regardless of actual costs, offering greater cost certainty for the buyer but potentially higher risk for the contractor. Compared to Cost Plus Incentive Fee (CPIF) or Cost Plus Award Fee (CPAF) contracts, CPFF offers less flexibility for incentivizing cost savings or performance improvements, as the fee is fixed upfront. For missile production, FFP is often preferred for mature, high-volume production runs to ensure cost control, while CPFF might be used for initial production phases, complex modifications, or sustainment where cost estimation is more challenging.

What are the primary risks associated with a sole-source award for defense systems like AMRAAM?

The primary risks associated with a sole-source award for defense systems like the AMRAAM include a lack of price competition, which can lead to higher costs for the government and taxpayers. Without competing bids, there is less incentive for the sole contractor to innovate, improve efficiency, or reduce costs. There's also a risk of vendor lock-in, making it difficult and expensive to switch providers or technologies in the future. Furthermore, sole-source awards can sometimes mask inefficiencies or allow for less stringent oversight if the government lacks alternative benchmarks. Dependence on a single supplier can also create supply chain vulnerabilities, especially if that supplier faces production issues or geopolitical challenges.

What is the strategic importance of the AMRAAM missile and its continued production?

The AMRAAM is a cornerstone of air-to-air combat capability for the U.S. Air Force, Navy, and allied nations. It is a radar-guided missile designed to engage targets at medium ranges, providing fighter aircraft with a significant standoff capability. Its continued production and repair are strategically vital for maintaining air superiority in contested airspace and deterring potential adversaries. The missile's advanced capabilities, including its 'fire-and-forget' functionality and ability to counter sophisticated threats, ensure that U.S. and allied air forces remain dominant. Ensuring a robust supply chain and ongoing technological updates for the AMRAAM is crucial for national security and global power projection.

How does this contract fit into the broader context of U.S. defense spending on air-to-air missiles?

This $48.2 million contract for AMRAAM production and repair is part of a larger, multi-billion dollar annual investment by the Department of Defense in air-to-air missile systems. The AMRAAM program itself represents a significant portion of this spending, given its widespread deployment and ongoing upgrades. Defense budgets allocate substantial funds to ensure the readiness and technological superiority of air combat fleets, which includes procuring new missiles, maintaining existing inventories, and developing next-generation capabilities. This specific contract contributes to sustaining the current operational capability of U.S. and allied air forces, ensuring they have the necessary munitions to fulfill their missions. It reflects a consistent, long-term commitment to air dominance.

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

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

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: $156,736,791

Exercised Options: $156,736,791

Current Obligation: $48,192,957

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $7,178,446

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA855625DB001

IDV Type: IDC

Timeline