DoD Awards Raytheon $87M for Miniature Self-Defense Missile R&D, Facing Potential Cost Overruns
Contract Overview
Contract Amount: $86,985,998 ($87.0M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2020-07-21
End Date: 2025-01-17
Contract Duration: 1,641 days
Daily Burn Rate: $53.0K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: MINIATURE SELF DEFENSE MISSILE PHASE 2
Place of Performance
Location: TUCSON, PIMA County, ARIZONA, 85756
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $87.0 million to RAYTHEON COMPANY for work described as: MINIATURE SELF DEFENSE MISSILE PHASE 2 Key points: 1. Significant R&D investment in advanced defense technology. 2. Raytheon Company, a major defense contractor, holds the award. 3. Potential for cost escalation due to Cost Plus Fixed Fee contract type. 4. Sector focus on Research and Development in Physical Sciences.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee contract type introduces risk for cost overruns, as the government bears the majority of the cost risk. Benchmarking against similar R&D contracts is difficult without more granular cost data.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the Cost Plus Fixed Fee structure may not incentivize the most aggressive price discovery.
Taxpayer Impact: Taxpayer funds are allocated for advanced defense research. The potential for cost overruns necessitates careful oversight to ensure value for money.
Public Impact
Advancement of critical defense capabilities. Potential for technological breakthroughs in missile systems. Economic impact through contract with a major aerospace firm. Job creation in R&D and manufacturing sectors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type
- Long contract duration (1641 days)
- No small business participation indicated
Positive Signals
- Awarded under full and open competition
- Focus on critical defense R&D
- Award to established prime contractor
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on physical sciences. Spending in this area is crucial for maintaining technological superiority but can be prone to cost volatility.
Small Business Impact
There is no indication of small business participation in this contract, which is a missed opportunity for fostering innovation and economic inclusion within the defense supply chain.
Oversight & Accountability
The Cost Plus Fixed Fee contract type requires robust oversight to monitor costs and ensure performance objectives are met. Regular reviews and audits will be essential.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Cost overrun potential due to CPFF contract
- Long performance period
- Lack of small business subcontracting plan
- High R&D complexity and inherent uncertainty
Tags
research-and-development-in-the-physical, department-of-defense, az, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $87.0 million to RAYTHEON COMPANY. MINIATURE SELF DEFENSE MISSILE PHASE 2
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 $87.0 million.
What is the period of performance?
Start: 2020-07-21. End: 2025-01-17.
What is the projected cost efficiency of this R&D effort compared to similar historical projects?
Benchmarking the cost efficiency of this R&D effort against historical projects is challenging without detailed breakdowns of research activities and their associated costs. The Cost Plus Fixed Fee structure inherently carries higher cost risk for the government, making direct comparisons difficult unless specific performance metrics and cost ceilings are established and met.
What are the primary technical risks associated with the miniature self-defense missile development?
Primary technical risks likely include achieving the desired miniaturization while maintaining effectiveness, ensuring reliability under various operational conditions, and integrating advanced guidance and control systems. The complexity of developing novel defense technology means unforeseen challenges in materials science, power sources, and sensor technology are probable.
How will the effectiveness of the developed missile be validated and measured?
Effectiveness will likely be validated through a series of rigorous testing phases, including component testing, subsystem integration tests, and full-system live-fire exercises. Key performance parameters such as range, accuracy, warhead effectiveness, and reliability will be measured against predefined requirements and operational scenarios.
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: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: FA865120S0008
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Rockwell Collins Australia PTY Limited
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: $86,985,998
Exercised Options: $86,985,998
Current Obligation: $86,985,998
Actual Outlays: $421,297
Subaward Activity
Number of Subawards: 4
Total Subaward Amount: $401,868
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA865120D0001
IDV Type: IDC
Timeline
Start Date: 2020-07-21
Current End Date: 2025-01-17
Potential End Date: 2025-01-17 00:00:00
Last Modified: 2025-08-07
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