Raytheon Company awarded $25M for Griffin missiles, a sole-source procurement by the Air Force

Contract Overview

Contract Amount: $24,993,572 ($25.0M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2016-12-02

End Date: 2018-04-30

Contract Duration: 514 days

Daily Burn Rate: $48.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: GRIFFIN MISSILES

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $25.0 million to RAYTHEON COMPANY for work described as: GRIFFIN MISSILES Key points: 1. Contract awarded at a firm fixed price, indicating clear cost expectations. 2. Sole-source award suggests limited market competition for this specific requirement. 3. Contract duration of 514 days provides a defined period for delivery. 4. Procurement falls under 'Other Guided Missile and Space Vehicle Parts' manufacturing. 5. Awarded to a single, established defense contractor, Raytheon Company. 6. Geographic location of contractor is Arizona.

Value Assessment

Rating: fair

The contract value of $24.99 million for Griffin missiles is difficult to benchmark without more specific details on the quantity and configuration of missiles procured. As a sole-source award, direct price comparisons to similar competitive contracts are not readily available. The firm fixed-price structure provides cost certainty for the government, but the absence of competition may have limited opportunities for price negotiation and achieving the best possible value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Raytheon Company, was solicited. This approach is typically used when a unique product or service is required, or when there is insufficient time to conduct a competitive procurement. The lack of competition means that the government did not benefit from the price discovery mechanisms inherent in a multi-bidder scenario.

Taxpayer Impact: Taxpayers may have paid a higher price than if the contract had been competed. The absence of competitive pressure limits the government's ability to negotiate the lowest possible cost for these critical missile systems.

Public Impact

The primary beneficiaries are the U.S. Air Force, receiving advanced missile systems. The contract delivers Griffin missiles, a key component for air-to-ground and anti-armor operations. The geographic impact is primarily within Arizona, where Raytheon Company is located. The contract supports jobs within Raytheon Company's manufacturing facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing opportunities.
Lack of transparency in the justification for sole-source procurement.
Potential for cost overruns if not closely monitored due to lack of competition.

Positive Signals

Firm fixed-price contract provides cost certainty.
Award to a known, established defense contractor with a track record.
Procurement of a critical defense asset (Griffin missiles).

Sector Analysis

This contract falls within the defense sector, specifically the manufacturing of guided missiles and related equipment. The defense industry is characterized by high R&D costs, long product development cycles, and significant government procurement. Spending in this sub-sector is driven by national security requirements and technological advancements. Comparable spending benchmarks would involve other missile system procurements, which can vary widely based on system complexity and quantity.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless Raytheon Company voluntarily engages small businesses in its supply chain for this specific contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management systems. Accountability measures are inherent in the firm fixed-price structure, which obligates the contractor to deliver within the agreed price. Transparency is limited due to the sole-source nature of the award; however, contract awards are generally reported in federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Air-to-Ground Munitions
Missile Systems Procurement
Defense Manufacturing Contracts
Raytheon Company Contracts

Risk Flags

Sole-source award may limit price competition.
Lack of detailed quantity and unit cost information hinders value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.0 million to RAYTHEON COMPANY. GRIFFIN MISSILES

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 $25.0 million.

What is the period of performance?

Start: 2016-12-02. End: 2018-04-30.

What is the specific quantity and configuration of Griffin missiles being procured under this contract?

The provided data does not specify the exact quantity or detailed configuration of the Griffin missiles. The contract value is $24,993,572, and the contract type is 'DEFINITIVE CONTRACT' with a duration of 514 days. Without knowing the unit cost or specific model variants, it is challenging to assess the value for money or compare it to other procurements. Further details would be needed from the contracting agency to ascertain the precise number and types of missiles included in this award.

What was the justification for awarding this contract on a sole-source basis?

The data indicates the contract was 'NOT COMPETED,' which typically implies a sole-source award. Common justifications for sole-source procurements include the unavailability of other sources, urgent and compelling needs, or specific capabilities possessed by only one contractor. For missile systems like the Griffin, it's possible that Raytheon Company holds unique intellectual property, manufacturing capabilities, or that the system is highly specialized and integrated with existing Air Force platforms, making a competitive procurement impractical or excessively time-consuming. A formal Justification for Other Than Full and Open Competition (JOFOC) would typically be required and publicly available for such awards.

How does the unit cost of these Griffin missiles compare to historical or market rates?

The provided data does not include the unit cost, only the total contract value. To determine a unit cost, the quantity of missiles would need to be known. Without this information, a direct comparison to historical or market rates is impossible. Furthermore, as this was a sole-source award, a direct comparison to competitively bid prices for similar systems would be difficult. Benchmarking would require access to detailed cost breakdowns or data from other, potentially competitive, procurements of Griffin missiles or comparable systems.

What is Raytheon Company's track record with the Department of Defense for similar missile systems?

Raytheon Company (now RTX) is a major defense contractor with a long history of producing various missile systems for the U.S. military, including the Griffin missile family. They have consistently been awarded large contracts for air-to-air, air-to-ground, and surface-to-air missiles. Their track record generally includes successful development and production, though like any large contractor, they have faced scrutiny over costs and performance on specific programs. This specific contract represents one of many awards for missile systems to Raytheon by the Department of Defense.

What are the performance risks associated with this specific contract for Griffin missiles?

Performance risks for this contract are primarily related to the sole-source nature of the award and the inherent complexities of missile manufacturing. Without competitive pressure, there's a potential risk that cost efficiencies might not be fully realized. Technical performance risks include ensuring the missiles meet stringent military specifications, reliability in various operational environments, and timely integration with Air Force platforms. Programmatic risks could involve potential delays in production or delivery, although the firm fixed-price contract structure aims to mitigate cost overruns. The government's program management and quality assurance efforts are critical to mitigating these risks.

How does this contract fit into the broader context of Air Force missile procurement strategies?

This contract for Griffin missiles likely fits into the Air Force's strategy for providing precision-guided munitions capable of engaging a range of targets, particularly light armored vehicles and personnel. The Griffin is known for its versatility and relatively lower cost compared to some larger munitions. Sole-source awards for specific missile variants or upgrades are not uncommon, especially when maintaining commonality with existing systems or when a particular contractor dominates a niche market. This procurement supports the Air Force's need for adaptable and effective close air support and interdiction capabilities.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

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, 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: $24,993,572

Exercised Options: $24,993,572

Current Obligation: $24,993,572

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline