DoD awards Raytheon $1.28B for Guided Missile Manufacturing, a sole-source contract spanning 5 years

Contract Overview

Contract Amount: $128,289,089 ($128.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2003-12-19

End Date: 2008-11-30

Contract Duration: 1,808 days

Daily Burn Rate: $71.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $128.3 million to RAYTHEON COMPANY for work described as: Key points: 1. Significant contract value of $1.28 billion awarded to a major defense contractor. 2. Sole-source award raises questions about competition and potential price inflation. 3. Long contract duration of 1808 days suggests a sustained need for these services. 4. The sector is critical for national defense, indicating high strategic importance.

Value Assessment

Rating: questionable

The contract value of $1.28 billion is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to market alternatives or if it reflects a fair price discovery process.

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 may lead to higher costs for taxpayers as there was no market pressure to offer the best price.

Taxpayer Impact: The lack of competition in this large sole-source contract likely results in a higher cost to taxpayers than a competitively awarded contract would.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. National security relies on the timely delivery of these critical missile systems. Potential for reduced innovation if the contractor faces no competitive pressure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
High contract value

Positive Signals

Critical defense capability
Long-term contract provides stability

Sector Analysis

This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a key component of the defense industry. Spending in this area is typically high due to national security requirements, but competitive pricing is crucial.

Small Business Impact

The data indicates this contract was awarded to Raytheon Company, a large prime contractor. There is no information provided to suggest subcontracting opportunities for small businesses on this specific award.

Oversight & Accountability

The Department of Defense awarded this contract. Oversight would typically involve contract performance monitoring, quality assurance, and financial audits to ensure compliance and value for money, especially given the sole-source nature.

Related Government Programs

Guided Missile and Space Vehicle Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Sole-source award limits price competition.
Potential for cost overruns without competitive pressure.
Long contract duration may not reflect evolving technological needs.
Lack of transparency in pricing justification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $128.3 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 $128.3 million.

What is the period of performance?

Start: 2003-12-19. End: 2008-11-30.

What was the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?

The justification for a sole-source award typically involves specific circumstances such as the existence of a unique capability, urgent need, or lack of adequate competition. Without further documentation, it's impossible to determine the precise rationale, but it's a critical factor in assessing the value and fairness of the contract.

How does the $1.28 billion contract value compare to similar missile system procurements, and what is the basis for this valuation?

Benchmarking this $1.28 billion contract against similar procurements is challenging without access to detailed cost breakdowns and market data. The valuation is likely based on historical costs, estimated production expenses, and profit margins negotiated directly with Raytheon. A lack of competition makes external validation difficult.

What mechanisms are in place to ensure the effectiveness and efficiency of missile production under this long-term, sole-source agreement?

Effectiveness and efficiency under a sole-source contract rely heavily on robust government oversight, performance metrics, and clear deliverables outlined in the contract. The Department of Defense would likely employ program managers and quality assurance specialists to monitor Raytheon's progress, adherence to specifications, and overall performance throughout the contract's duration.

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: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1151 EAST HERMANS ROAD, TUCSON, AZ, 85706

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline