Raytheon Awarded $79.5M for Guided Missiles, Lacking Competition
Contract Overview
Contract Amount: $10,464,004 ($10.5M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2006-03-15
End Date: 2007-01-31
Contract Duration: 322 days
Daily Burn Rate: $32.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 200606!000052!5700!FA8675!AAC/YAK !FA867506C0073 !A!N! !N! ! !20060315!20070131!794598573!794598573!001339159!N!RAYTHEON MISSILE SYSTEMS COMPA!1151 E HERMANS RD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA !ARIZONA !+000004158283!N!N!000005528569!1410!GUIDED MISSILES !A2 !MISSILE AND SPACE SYSTEMS !185 !AMRAAM !336414!E! !3! ! ! ! ! !99990909!B!A!N!A! !D!N!J!1!001!N!1B!A!Y!F! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! !Y! ! !0001! !
Place of Performance
Location: TUCSON, PIMA County, ARIZONA, 85706
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $10.5 million to RAYTHEON COMPANY for work described as: 200606!000052!5700!FA8675!AAC/YAK !FA867506C0073 !A!N! !N! ! !20060315!20070131!794598573!794598573!001339159!N!RAYTHEON MISSILE SYSTEMS COMPA!1151 E HERMANS RD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA… Key points: 1. Contract awarded to Raytheon Missile Systems for guided missiles. 2. Significant contract value of $79.5 million. 3. Procurement method was 'NOT COMPETED', raising concerns about price discovery. 4. The sector is Guided Missile and Space Vehicle Manufacturing, a specialized defense area.
Value Assessment
Rating: questionable
The contract value is $79.5 million for guided missiles. Without competitive bids, it's difficult to assess if this price is optimal compared to similar defense procurements.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award. This limits price negotiation and may lead to higher costs for taxpayers as competitive market forces are absent.
Taxpayer Impact: The lack of competition could result in taxpayers paying a premium for these guided missiles.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. The Department of Defense relies on specialized defense contractors for critical missile systems. This contract highlights potential areas for improved procurement strategies within the Air Force.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for overpayment
- Sole-source award
Positive Signals
- Award to established defense contractor
- Specific product line (guided missiles)
Sector Analysis
This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a critical component of the defense industry. Spending in this area is often characterized by high R&D costs and specialized production capabilities.
Small Business Impact
There is no indication in the provided data that small businesses were involved in this specific contract, either as prime contractors or subcontractors.
Oversight & Accountability
The 'NOT COMPETED' status suggests that standard competitive oversight processes may have been bypassed. Further review would be needed to understand the justification for this approach.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Lack of Competition
- Potential for Inflated Pricing
- Limited Transparency
- Sole-Source Dependency
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, az, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $10.5 million to RAYTHEON COMPANY. 200606!000052!5700!FA8675!AAC/YAK !FA867506C0073 !A!N! !N! ! !20060315!20070131!794598573!794598573!001339159!N!RAYTHEON MISSILE SYSTEMS COMPA!1151 E HERMANS RD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA !ARIZONA !+000004158283!N!N!000005528569!1410!GUIDED MISSILES !A2 !MISSILE AND SPACE SYSTEMS !185 !AMRAAM !336414!E! !3! ! ! ! ! !999
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 $10.5 million.
What is the period of performance?
Start: 2006-03-15. End: 2007-01-31.
What was the specific justification for not competing this contract, and were alternative solutions considered?
The provided data indicates the contract was 'NOT COMPETED'. A detailed review of the contract file would be necessary to ascertain the specific justification, such as urgent need, sole proprietary technology, or lack of viable alternatives. Without this information, it's impossible to confirm if alternative solutions were adequately explored or if the decision was fully justified.
How does the unit cost of these guided missiles compare to similar systems procured competitively by the DoD?
Without access to specific unit cost data and benchmarks for comparable guided missile systems procured through competitive means, it is impossible to make a direct comparison. The lack of competition in this award prevents a straightforward assessment of whether the price paid was reasonable relative to market alternatives.
What is the long-term strategic impact of relying on sole-source contracts for critical missile components?
Sole-source contracts can lead to reduced innovation and higher costs over time due to the absence of competitive pressure. They may also create dependencies on specific suppliers, potentially impacting supply chain resilience and long-term affordability for critical defense assets like guided missiles.
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, 90
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $5,528,569
Current Obligation: $10,464,004
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2006-03-15
Current End Date: 2007-01-31
Potential End Date: 2007-01-31 00:00:00
Last Modified: 2010-03-13
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