DoD's $46.4M Raytheon Griffin Missile Contract Lacks Competition, Raises Cost Concerns

Contract Overview

Contract Amount: $46,439,126 ($46.4M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2017-11-21

End Date: 2019-06-30

Contract Duration: 586 days

Daily Burn Rate: $79.2K/day

Competition Type: NOT COMPETED

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 $46.4 million to RAYTHEON COMPANY for work described as: GRIFFIN MISSILES Key points: 1. Significant spending on advanced missile systems. 2. Sole reliance on Raytheon Company for Griffin missiles. 3. Potential for inflated costs due to lack of competition. 4. Missile manufacturing falls within the Defense sector.

Value Assessment

Rating: questionable

The contract value of $46.4 million for Griffin missiles is difficult to assess without a competitive benchmark. The absence of competition suggests potential overpricing compared to what could be achieved in a more open market.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and negotiation leverage, potentially leading to higher costs for taxpayers.

Taxpayer Impact: The lack of competition directly impacts taxpayer value, as the government may be paying a premium for these essential defense assets.

Public Impact

Procurement of advanced guided missiles for national defense. Potential impact on military readiness if costs escalate. Reinforces reliance on a single contractor for critical technology.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source procurement
Lack of competitive pricing
Potential for cost overruns

Positive Signals

Acquisition of critical defense technology
Fixed-price contract type can limit cost uncertainty

Sector Analysis

The defense sector heavily relies on specialized manufacturing for advanced weaponry. Spending benchmarks for similar guided missile systems are often proprietary, but competitive awards typically yield better value.

Small Business Impact

This contract does not appear to involve small businesses, as it is a sole-source award to a large prime contractor, Raytheon Company.

Oversight & Accountability

Oversight is crucial for sole-source contracts to ensure fair pricing and prevent waste. The Department of Defense's contracting officers must diligently monitor performance and costs.

Related Government Programs

Guided Missile and Space Vehicle Manufacturing
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Sole-source award
Lack of competitive pricing
Potential for cost overruns
Limited transparency in pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $46.4 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 $46.4 million.

What is the period of performance?

Start: 2017-11-21. End: 2019-06-30.

What is the estimated cost savings if this contract had been competed?

Without a competitive bidding process, it's impossible to provide an exact figure. However, historical data suggests that competitive procurements can yield savings of 10-30% or more compared to sole-source awards, especially for complex systems like guided missiles.

What are the risks associated with relying on a single supplier for Griffin missiles?

The primary risks include price escalation due to lack of market pressure, potential supply chain disruptions if the sole supplier faces issues, and reduced innovation as there's no competitive incentive for the contractor to improve the product or reduce costs.

How effective is the Department of the Air Force in ensuring value for money on sole-source missile contracts?

Effectiveness varies. While fixed-price contracts offer some cost control, the absence of competition inherently limits the Air Force's ability to secure the best possible price. Robust market research and negotiation are critical to mitigate this.

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: 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: $46,439,126

Exercised Options: $46,439,126

Current Obligation: $46,439,126

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $1,059,584

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA865617D0005

IDV Type: IDC

Timeline