DoD's $240.7M Griffin Missile Buy Awarded to Raytheon Company Under Firm Fixed Price Contract

Contract Overview

Contract Amount: $24,071,072 ($24.1M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2018-08-20

End Date: 2019-09-30

Contract Duration: 406 days

Daily Burn Rate: $59.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: GRIFFIN MISSILE BUY

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $24.1 million to RAYTHEON COMPANY for work described as: GRIFFIN MISSILE BUY Key points: 1. Contract awarded to a single, established defense contractor, indicating potential for limited competition. 2. The firm fixed price contract type suggests price certainty for the government, but may limit flexibility. 3. Delivery order issued under a larger contract, requiring analysis of the parent contract's terms and competition. 4. The missile manufacturing sector is highly specialized, with a few dominant players. 5. Awarded to Raytheon Company, a major defense contractor with a significant track record. 6. The contract duration of 406 days is relatively short for a major weapons system procurement.

Value Assessment

Rating: fair

Benchmarking the value of this specific delivery order is challenging without access to the parent contract's details and historical pricing for the Griffin missile. However, the firm fixed price structure provides cost certainty. Given the specialized nature of guided missile manufacturing, pricing is likely influenced by R&D costs, material expenses, and the contractor's established production capabilities. Further analysis would require comparing this unit price to similar missile systems or previous buys of the Griffin missile by the Department of Defense.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source delivery order, meaning it was not competed. This approach is often used when a specific item is required from a particular manufacturer, or when it's more efficient to use an existing contract vehicle. The lack of competition means that the government did not solicit bids from multiple suppliers, which can sometimes lead to higher prices than if a competitive process were used. The justification for a sole-source award would typically be documented by the agency.

Taxpayer Impact: Sole-source awards limit opportunities for other businesses to compete for government contracts and may result in less favorable pricing for taxpayers compared to a fully competed procurement.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Air Force, receiving advanced missile systems. The services delivered include the manufacturing and delivery of Griffin missiles, crucial for air-to-ground combat capabilities. The geographic impact is primarily within Arizona, where Raytheon Company's facility is located, potentially supporting local employment. Workforce implications include skilled manufacturing jobs in the defense sector, particularly in missile production and assembly.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition for this specific delivery order may limit price negotiation advantages for the government.
Reliance on a single contractor for this missile system could create supply chain risks if the contractor faces production issues.
The firm fixed price contract, while offering cost certainty, might not capture potential cost savings from efficiencies achieved by the contractor.
Limited transparency into the sole-source justification and pricing breakdown for this specific order.

Positive Signals

Award to a reputable contractor (Raytheon Company) with a proven track record in defense manufacturing.
Firm fixed price contract provides budget predictability for the Department of Defense.
The missile system likely addresses a critical warfighting capability for the Air Force.
Delivery order issued under an existing contract structure, potentially streamlining the procurement process.

Sector Analysis

The guided missile and space vehicle manufacturing sector is a critical component of the defense industrial base. This sector is characterized by high barriers to entry due to complex technology, significant R&D investment, and stringent regulatory requirements. Major players like Raytheon Company dominate the market, often holding long-term contracts for advanced weapon systems. Spending in this sector is driven by national security priorities and technological advancements in defense capabilities. Comparable spending benchmarks would involve analyzing other large-scale missile procurement contracts within the DoD.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor, Raytheon Company, is a large business. While there is no direct set-aside, large defense contracts often include subcontracting requirements that can flow down to small businesses. The extent to which small businesses will participate as subcontractors on this specific delivery order is not detailed here but is a common practice in the defense industry to meet small business utilization goals.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. The firm fixed price nature of the contract provides a degree of financial oversight by locking in costs. Accountability measures are inherent in the contract terms, requiring delivery of specified missiles. Transparency may be limited due to the sole-source nature of the award and the classification of defense procurement details. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Air-to-Ground Munitions Procurement
Guided Missile Systems
Department of Defense Major Weapon Systems
Raytheon Company Defense Contracts
Air Force Munitions Spending

Risk Flags

Sole-source award may limit price competition.
Contract awarded under a larger, potentially uncompeted, contract vehicle.
Limited public information on specific performance metrics for this delivery order.
Reliance on a single prime contractor for a critical defense system.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.1 million to RAYTHEON COMPANY. GRIFFIN MISSILE BUY

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 $24.1 million.

What is the period of performance?

Start: 2018-08-20. End: 2019-09-30.

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

Raytheon Company, now part of RTX, has an extensive and long-standing track record with the Department of Defense, particularly in missile systems. They are a primary developer and manufacturer of numerous advanced air-to-air, air-to-ground, and naval missiles. Their portfolio includes well-known systems like the Patriot missile defense system, Tomahawk cruise missile, and various guided bomb units. The Griffin missile itself is a product of their development, designed as a lightweight, precision-guided munition. The company consistently receives large contract awards from the DoD, reflecting its significant role in equipping U.S. military forces and allied nations. Their history includes both sole-source and competitively awarded contracts, and they are a major defense industrial base supplier.

How does the $240.7 million value of this delivery order compare to overall DoD spending on guided missiles?

The $240.7 million value of this specific delivery order for Griffin missiles represents a portion of the Department of Defense's broader spending on guided missile systems. The DoD's annual budget for procurement of aircraft, missiles, weapons, and vehicles typically runs into the tens of billions of dollars. For instance, in recent fiscal years, missile procurement alone has accounted for several billion dollars. Therefore, while $240.7 million is a substantial sum for a single contract award, it is a relatively modest component within the vast landscape of DoD's overall investment in advanced missile technology and procurement across all branches of service. This specific buy likely addresses a particular operational need or replenishment requirement for the Air Force.

What are the primary risks associated with a sole-source award for critical defense equipment like the Griffin missile?

The primary risks associated with a sole-source award for critical defense equipment like the Griffin missile include potential for higher costs due to the absence of competitive bidding, reduced incentive for the contractor to innovate or improve efficiency if they are the only option, and potential supply chain vulnerabilities if the sole-source provider experiences production issues or financial instability. Furthermore, it limits the government's ability to explore alternative technologies or suppliers that might offer better performance or value. Sole-source awards also raise concerns about transparency and fairness in the procurement process, potentially leading to perceptions of favoritism or missed opportunities for other capable manufacturers.

What is the typical performance context for the Griffin missile, and how does this contract support it?

The Griffin missile is a lightweight, precision-guided munition designed for close air support and intelligence, surveillance, and reconnaissance (ISR) missions. It can be launched from various platforms, including helicopters, drones, and fixed-wing aircraft, offering versatility to ground forces and aircrews. The typical performance context involves engaging targets such as enemy combatants, vehicles, and hardened structures with high accuracy, minimizing collateral damage. This contract, awarding $240.7 million for the missile buy, directly supports the Air Force's operational readiness by ensuring a supply of these critical munitions. It enables the force to maintain its capability to conduct effective air-to-ground strikes and provide close air support to ground troops in various operational environments.

How has historical spending on the Griffin missile system by the DoD evolved prior to this award?

Historical spending on the Griffin missile system by the DoD prior to this $240.7 million award would likely show a pattern of phased procurements, reflecting its integration into various Air Force and potentially other service platforms. Initial development and testing phases would have been followed by production contracts, often awarded to Raytheon Company. Spending would fluctuate based on operational tempo, strategic needs, and budget allocations. The Griffin's relatively lower cost and versatility compared to larger missiles have likely made it a recurring procurement item for specific mission sets. Analyzing past contract awards for the Griffin would reveal trends in quantity, unit price, and the specific Air Force units or programs receiving the munitions, indicating its sustained importance.

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

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: $24,071,072

Exercised Options: $24,071,072

Current Obligation: $24,071,072

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $1,557,904

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA865617D0005

IDV Type: IDC

Timeline