DoD Awards Raytheon $647M for Missile Manufacturing, Full & Open Competition Used

Contract Overview

Contract Amount: $646,693,333 ($646.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2004-12-22

End Date: 2011-02-28

Contract Duration: 2,259 days

Daily Burn Rate: $286.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

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 $646.7 million to RAYTHEON COMPANY for work described as: Key points: 1. Significant contract value of $647 million awarded to Raytheon Company. 2. Competition method was 'Full and Open Competition After Exclusion of Sources', indicating a competitive process. 3. Contract duration of 2259 days suggests a long-term need for these services. 4. The sector is Defense, specifically Guided Missile and Space Vehicle Manufacturing.

Value Assessment

Rating: good

The contract value of $647 million is substantial. Without specific unit cost data or benchmarks for similar missile systems, a precise pricing assessment is difficult. However, the use of Firm Fixed Price suggests cost control was a consideration.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources'. This method implies that while competition was sought, certain sources may have been excluded, potentially impacting the breadth of price discovery.

Taxpayer Impact: The competitive nature of the award, despite source exclusion, likely aimed to secure a reasonable price for taxpayers. The large contract value means even small price variations have significant taxpayer implications.

Public Impact

National security is enhanced through the procurement of advanced missile systems. Raytheon's role as a major defense contractor impacts the aerospace and defense industry. Long-term contracts can provide stability for the contractor and ensure sustained supply for the government. The specific nature of missile manufacturing involves advanced technology and specialized expertise.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition due to source exclusion.
Long contract duration could lead to cost overruns if not managed effectively.
Dependence on a single contractor for critical defense assets.

Positive Signals

Awarded through a competitive process.
Firm Fixed Price contract type helps manage costs.
Significant investment in defense capabilities.

Sector Analysis

This contract falls within the Defense sector, specifically the manufacturing of guided missiles and space vehicles. Spending in this area is critical for national security and often involves high-value, technologically advanced procurements. Benchmarks are difficult without specific system details, but multi-million dollar contracts are common for such capabilities.

Small Business Impact

The data indicates this contract was awarded to Raytheon Company and does not specify any subcontracting to small businesses. Further analysis would be needed to determine if small business participation was a requirement or if opportunities were provided.

Oversight & Accountability

The contract was managed by the Defense Contract Management Agency, suggesting established oversight mechanisms are in place. However, the long duration and high value necessitate continuous monitoring for performance, cost, and adherence to contract terms.

Related Government Programs

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

Risk Flags

Potential for limited competition due to source exclusion.
Long contract duration increases risk of cost escalation and obsolescence.
Lack of specific system details hinders true value assessment.
No explicit mention of small business subcontracting.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $646.7 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 $646.7 million.

What is the period of performance?

Start: 2004-12-22. End: 2011-02-28.

What specific types of guided missiles and space vehicles are being manufactured under this contract, and how do their capabilities compare to current threats?

The contract details do not specify the exact missile or space vehicle types. Understanding these specifics is crucial for assessing their relevance to current and future defense threats. Without this information, it's difficult to determine the true value and effectiveness of this procurement beyond the stated dollar amount and contractor.

What were the specific reasons for excluding certain sources in this 'Full and Open Competition After Exclusion of Sources' award, and did this exclusion limit potential cost savings?

The rationale for excluding specific sources is not provided in the data. Such exclusions can sometimes be justified by unique capabilities or security requirements, but they also risk limiting competition. If fewer bidders participated due to exclusions, it may have resulted in a higher price than could have been achieved in a truly open competition.

How does the per-unit cost of these guided missiles and space vehicles compare to similar systems procured by other defense agencies or allied nations?

A direct per-unit cost comparison is not possible with the provided data. Benchmarking requires detailed specifications of the systems, their performance metrics, and the pricing structures of comparable contracts. Without this granular information, assessing the cost-effectiveness and value for money for taxpayers remains challenging.

Industry Classification

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

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1151 E HERMANS RD, TUCSON, AZ, 85706

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $255,057,704

Exercised Options: $5,057,704

Current Obligation: $646,693,333

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Timeline