Raytheon Company awarded $51.8M for AIM-9X Sidewinder support in Air Force's ABMS C-CM program

Contract Overview

Contract Amount: $51,805,284 ($51.8M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2020-03-09

End Date: 2026-06-30

Contract Duration: 2,304 days

Daily Burn Rate: $22.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: AIM-9X SIDEWINDER SUPPORT IN ADVANCED BATTLE MANAGEMENT SYSTEM (ABMS) COUNTER CRUISE MISSILE (C-CM) EXPERIMENTATION PROG

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $51.8 million to RAYTHEON COMPANY for work described as: AIM-9X SIDEWINDER SUPPORT IN ADVANCED BATTLE MANAGEMENT SYSTEM (ABMS) COUNTER CRUISE MISSILE (C-CM) EXPERIMENTATION PROG Key points: 1. Contract focuses on advanced research and development for missile defense capabilities. 2. Sole-source award raises questions about potential price efficiencies and market alternatives. 3. Long contract duration (2304 days) suggests a sustained need for specialized support. 4. The contract is part of a broader Air Force initiative for battle management systems. 5. Research and Development in Physical, Engineering, and Life Sciences is a key sector for innovation. 6. The contract's value is significant within the context of specialized defense R&D.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source R&D contract is challenging without comparable data. The Cost Plus Fixed Fee (CPFF) structure allows for cost reimbursement plus a fixed fee, which can lead to cost overruns if not managed tightly. The contract's total obligation is $51.8 million over its duration, with a base value of $22.5 million. Further analysis of the fixed fee percentage and actual costs incurred will be necessary to fully assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Raytheon Company, was solicited. This approach is typically used when a unique capability or proprietary technology is required, or in cases of urgent need. The lack of competition means that taxpayers do not benefit from the price discovery mechanisms inherent in a competitive bidding process, potentially leading to higher costs.

Taxpayer Impact: The absence of competition for this sole-source award means taxpayers may not be receiving the most cost-effective solution available in the market.

Public Impact

The primary beneficiaries are the U.S. Air Force and its advanced battle management capabilities. Services delivered include research, development, and support related to the AIM-9X Sidewinder missile system within the ABMS Counter Cruise Missile program. The geographic impact is primarily within Arizona, where the contractor is located, and potentially at various Air Force testing and operational sites. Workforce implications include specialized engineering, research, and technical roles within Raytheon Company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
CPFF contract type can incentivize cost increases if not rigorously overseen.
Long contract duration may not reflect evolving technological needs or market shifts.
Lack of transparency in fixed fee calculation could obscure true profit margins.

Positive Signals

Supports critical defense research and development for national security.
Leverages established expertise of a major defense contractor (Raytheon).
Addresses a specific, potentially unique, technological requirement for missile defense.

Sector Analysis

This contract falls within the Defense Research and Development sector, specifically focusing on advanced missile systems and battle management. The market for such specialized defense technologies is dominated by a few large prime contractors. Spending in this area is driven by evolving threats and the need for technological superiority. Comparable spending benchmarks would typically involve other sole-source R&D contracts for advanced weapon systems within the Department of Defense.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there explicit information regarding subcontracting plans 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 specialized support not covered by the primary contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures would be tied to the performance metrics outlined in the Cost Plus Fixed Fee agreement. Transparency may be limited due to the sole-source nature and the classified or sensitive aspects of defense R&D. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Advanced Battle Management System (ABMS)
AIM-9X Sidewinder Missile Program
Counter Cruise Missile Defense Initiatives
Department of Defense Research and Development Programs

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $51.8 million to RAYTHEON COMPANY. AIM-9X SIDEWINDER SUPPORT IN ADVANCED BATTLE MANAGEMENT SYSTEM (ABMS) COUNTER CRUISE MISSILE (C-CM) EXPERIMENTATION PROG

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 $51.8 million.

What is the period of performance?

Start: 2020-03-09. End: 2026-06-30.

What is the specific technical capability being developed or supported under this contract?

This contract supports the AIM-9X SIDEWINDER SUPPORT IN ADVANCED BATTLE MANAGEMENT SYSTEM (ABMS) COUNTER CRUISE MISSILE (C-CM) EXPERIMENTATION PROGRAM. The AIM-9X Sidewinder is an air-to-air missile, and its integration or support within the ABMS C-CM experimentation program suggests research into how this missile, or its associated technologies, can contribute to countering cruise missile threats. This could involve aspects like sensor integration, targeting algorithms, or operational concepts for missile defense using existing or modified missile systems within a broader battle management framework.

How does the Cost Plus Fixed Fee (CPFF) contract structure impact cost control and contractor incentive?

The Cost Plus Fixed Fee (CPFF) structure reimburses the contractor (Raytheon Company) for all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fixed fee provides a ceiling on profit, the incentive for the contractor is to complete the work efficiently to maximize the return on their fixed fee investment. However, if cost controls are weak or the scope is not well-defined, this structure can incentivize cost overruns, as the government bears the risk of increased costs. Robust oversight and clear performance metrics are crucial for effective cost control under a CPFF arrangement.

What are the risks associated with a sole-source award for advanced R&D in defense?

Sole-source awards, while sometimes necessary for unique capabilities, carry inherent risks. The primary risk is the lack of price competition, which can lead to higher costs for the government compared to a competitively bid contract. There's also a risk of reduced innovation or efficiency, as the contractor faces less pressure to optimize performance or explore cost-saving alternatives. Furthermore, it can limit opportunities for other capable companies to participate and develop relevant technologies, potentially concentrating critical capabilities within a single entity.

What is the significance of the 'Counter Cruise Missile (C-CM)' aspect of this program?

The Counter Cruise Missile (C-CM) aspect signifies a critical focus area for modern defense strategies. Cruise missiles pose a significant threat due to their low-altitude flight, speed, and potential for carrying various payloads. Developing effective C-CM capabilities is essential for protecting military assets and civilian populations. This contract's contribution to that effort, by experimenting with systems like the AIM-9X within the ABMS framework, indicates the Air Force's commitment to enhancing its layered defense against these persistent threats.

How does this contract fit into the broader Advanced Battle Management System (ABMS) initiative?

The Advanced Battle Management System (ABMS) is the Air Force's foundational digital infrastructure designed to connect sensors, platforms, and weapons across all domains (air, land, sea, space, cyber). This contract, focusing on C-CM experimentation involving the AIM-9X, represents a specific application or node within the larger ABMS architecture. It aims to leverage and integrate existing or modified capabilities to address a particular threat (cruise missiles) within the context of a more connected and data-driven battlespace envisioned by ABMS.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

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: $51,805,284

Exercised Options: $51,805,284

Current Obligation: $51,805,284

Actual Outlays: $1,771,130

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $303,661

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline