DoD Awards Raytheon $136.8M for Guided Missiles, Contract Ends 2024
Contract Overview
Contract Amount: $136,764,935 ($136.8M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2003-12-09
End Date: 2024-01-30
Contract Duration: 7,357 days
Daily Burn Rate: $18.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Place of Performance
Location: TUCSON, PIMA County, ARIZONA, 85756
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $136.8 million to RAYTHEON COMPANY for work described as: Key points: 1. Significant contract value of $136.8 million awarded to Raytheon Company. 2. Focus on Guided Missile and Space Vehicle Manufacturing within the Defense sector. 3. Long contract duration of 7357 days (over 20 years) raises questions about flexibility and potential for cost overruns. 4. No indication of small business participation.
Value Assessment
Rating: questionable
The contract's Cost Plus Award Fee structure can incentivize performance but may lead to higher costs if not tightly managed. Benchmarking against similar missile system contracts is difficult without more specific details on the scope and technology involved.
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 potentially leads to higher costs for taxpayers as there is no competitive pressure to drive down prices.
Taxpayer Impact: The lack of competition for a contract of this magnitude suggests taxpayers may be paying a premium due to the absence of market forces.
Public Impact
Taxpayers fund critical defense capabilities through this long-term contract. The extended duration could impact the adoption of newer, potentially more cost-effective technologies. Raytheon's role as a major defense contractor highlights the concentration of spending within a few large firms.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Long contract duration
- Cost Plus Award Fee structure
Positive Signals
- Awarded to a major defense contractor
- Supports critical defense capabilities
Sector Analysis
This contract falls under the Guided Missile and Space Vehicle Manufacturing sector, a critical component of national defense spending. Benchmarks for such specialized manufacturing are often proprietary and difficult to ascertain publicly, but significant R&D and production costs are typical.
Small Business Impact
The data indicates no small business participation in this contract. This is common for large, complex defense manufacturing contracts, but it represents a missed opportunity for small businesses to contribute to critical defense programs.
Oversight & Accountability
The long duration and sole-source nature of this contract warrant close oversight to ensure cost-effectiveness and prevent potential inefficiencies. Regular reviews of performance and pricing are crucial for accountability.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Lack of competitive bidding
- Extended contract duration (over 20 years)
- Cost Plus Award Fee (CPAF) structure can lead to higher costs
- No small business participation
- Potential for technological obsolescence over contract life
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, az, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $136.8 million to RAYTHEON COMPANY. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is RAYTHEON COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $136.8 million.
What is the period of performance?
Start: 2003-12-09. End: 2024-01-30.
What specific missile systems or technologies are covered under this contract, and how does their performance compare to industry standards?
The contract is for Guided Missile and Space Vehicle Manufacturing, but specific details are not provided. Without knowing the exact systems, it's impossible to assess their performance against industry standards. Further analysis would require access to technical specifications and independent performance reviews to determine if the capabilities delivered justify the significant investment.
Given the sole-source nature and long duration, what mechanisms are in place to mitigate the risk of cost overruns and ensure fair pricing?
The Cost Plus Award Fee (CPAF) structure is intended to provide some control by linking contractor profit to performance metrics. However, the lack of competition inherently limits price discovery. Robust oversight by the Department of Defense, including detailed cost audits and performance evaluations against pre-defined award criteria, is essential to mitigate risks and ensure fair pricing over the contract's extended life.
How does the continued reliance on a single, long-term contract for these specific defense capabilities impact innovation and the potential adoption of future technologies?
A long-term, sole-source contract can stifle innovation by locking in existing technologies and limiting opportunities for new entrants with potentially disruptive solutions. While it ensures a steady supply of current capabilities, it may delay or prevent the integration of next-generation systems, potentially impacting long-term defense modernization and cost-effectiveness.
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: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Rockwell Collins Australia PTY Limited
Address: 1151 EAST HERMANS ROAD, TUCSON, AZ, 85706
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2003-12-09
Current End Date: 2024-01-30
Potential End Date: 2024-01-30 00:00:00
Last Modified: 2023-12-26
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