Raytheon Company awarded $41.1M for HARM Control Section Modification, serving Air Force needs

Contract Overview

Contract Amount: $41,118,590 ($41.1M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2010-09-22

End Date: 2017-05-31

Contract Duration: 2,443 days

Daily Burn Rate: $16.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: HARM CONTROL SECTION MODIFICATION

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $41.1 million to RAYTHEON COMPANY for work described as: HARM CONTROL SECTION MODIFICATION Key points: 1. Contract value of $41.1M represents significant investment in missile component upgrades. 2. Sole awardee, Raytheon Company, suggests specialized capabilities or limited market competition. 3. Contract duration of 2443 days indicates a long-term need for these modifications. 4. Firm Fixed Price contract type shifts cost risk to the contractor. 5. Awarded to Raytheon, a major defense contractor with extensive experience in aerospace. 6. Geographic location of performance in Arizona may indicate specific manufacturing or testing facilities.

Value Assessment

Rating: good

The contract value of $41.1 million for missile component modification appears reasonable given the long performance period of 2443 days. Without specific benchmarks for HARM control section modifications, direct comparison is difficult. However, the firm fixed-price nature of the contract suggests that the government has secured a defined cost for the services, transferring potential cost overruns to Raytheon. This structure generally promotes cost control for the buyer.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The fact that Raytheon Company was the sole awardee suggests that, despite open competition, they were the most qualified or offered the best value. Further details on the number of proposals received would provide a clearer picture of the competitive landscape.

Taxpayer Impact: Full and open competition, even with a single awardee, generally benefits taxpayers by ensuring a market-based price is sought and that the government explores all available options before selecting a contractor.

Public Impact

The primary beneficiaries are the U.S. Air Force, receiving upgraded HARM missile components essential for defense operations. The services delivered involve the modification of critical missile parts, enhancing their functionality and lifespan. Performance is concentrated in Arizona, potentially supporting local manufacturing and technical expertise. The contract supports a specialized segment of the aerospace and defense manufacturing workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if Raytheon is the sole provider of these specific modifications.
Long contract duration could lead to complacency if not actively managed.
Reliance on a single contractor for critical components may pose supply chain risks.

Positive Signals

Firm Fixed Price contract provides cost certainty for the government.
Award through full and open competition suggests a thorough vetting process.
Raytheon's established track record in defense manufacturing implies technical competence.

Sector Analysis

This contract falls within the 'Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing' sector, a specialized niche within the broader aerospace and defense industry. The market is characterized by high barriers to entry due to technological complexity and stringent quality requirements. Spending in this area is driven by military modernization and sustainment needs, with major defense contractors like Raytheon dominating the landscape.

Small Business Impact

The contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. This suggests that the primary award went to a large prime contractor, and the impact on the small business ecosystem would likely be indirect, potentially through Raytheon's own supply chain if they engage small businesses for parts or services.

Oversight & Accountability

The contract is a definitive contract awarded by the Department of the Air Force, implying oversight from relevant Air Force contracting and program management offices. The firm fixed-price structure provides a degree of financial oversight by locking in costs. Transparency would be enhanced by public access to contract performance reports and any associated Inspector General reviews, though these are not detailed here.

Related Government Programs

HARM Missile System
Air-to-Ground Munitions
Aerospace Manufacturing
Defense Logistics Agency (DLA) Contracts
Guided Missile Parts Manufacturing

Risk Flags

Long contract duration may increase risk of cost escalation or obsolescence.
Sole awardee despite full and open competition warrants scrutiny of competition effectiveness.
Lack of explicit small business subcontracting goals may limit broader economic impact.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.1 million to RAYTHEON COMPANY. HARM CONTROL SECTION MODIFICATION

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 $41.1 million.

What is the period of performance?

Start: 2010-09-22. End: 2017-05-31.

What is Raytheon Company's historical performance record with the Department of Defense, particularly on similar missile modification contracts?

Raytheon Company, now part of RTX Corporation, has a long and extensive history as a prime contractor for the Department of Defense, particularly in missile systems and aerospace. They are a major producer of the HARM (High-speed Anti-Radiation Missile) itself. Historical data indicates a strong track record in delivering complex defense systems, though like any large contractor, they have faced scrutiny over cost, schedule, and performance on various programs. For missile modification contracts specifically, their performance would be assessed based on delivery timelines, adherence to specifications, and overall system reliability post-modification. A detailed review would involve examining past performance evaluations (e.g., CPARS reports) and any contract disputes or terminations related to similar work.

How does the $41.1 million contract value compare to other HARM missile modification or sustainment contracts awarded in recent years?

Comparing the $41.1 million value requires access to a broader database of similar contracts. However, given the 2443-day (approximately 6.7 years) performance period, the annual expenditure averages around $6.1 million. This figure needs to be contextualized against the scope of work – 'HARM Control Section Modification.' If this involves significant redesign, component replacement, or technological upgrades to a substantial number of missile units, the value could be considered moderate. If it's primarily for sustainment or minor modifications on a smaller fleet, it might be on the higher side. Benchmarking against contracts for other missile types or similar sustainment efforts by the Air Force would provide better context.

What are the primary risks associated with a long-duration (2443 days) firm fixed-price contract for specialized defense components?

Long-duration firm fixed-price contracts for specialized defense components present several risks. For the government, the primary risk is that the fixed price, agreed upon years in advance, may become uncompetitive if market prices for labor or materials significantly increase, or if technological advancements render the modifications less effective than anticipated. There's also a risk of contractor complacency leading to reduced quality or innovation over the extended period. For the contractor (Raytheon), the risk lies in underestimating the true cost of performance over such a long timeframe, potentially leading to reduced profit margins or even losses if unforeseen technical challenges or cost escalations occur. Ensuring robust quality assurance and change management processes are critical to mitigate these risks.

What is the strategic importance of HARM missile control section modifications for the U.S. Air Force's operational capabilities?

The HARM (High-speed Anti-Radiation Missile) is a crucial weapon system designed to detect and destroy enemy radar emitters, particularly air defense systems. Modifications to the 'control section' are vital because this is the component responsible for guidance, targeting, and flight control. Upgrading this section can enhance the missile's accuracy, range, seeker sensitivity, and its ability to counter evolving radar technologies and electronic countermeasures. Such improvements are critical for maintaining air superiority, enabling strike aircraft to operate more safely in contested airspace, and ensuring the effectiveness of the HARM missile against modern threats. This contract directly supports the Air Force's readiness and technological edge in electronic warfare and air-to-ground attack missions.

How does the geographic concentration of performance in Arizona impact the broader U.S. defense industrial base?

The concentration of performance for this HARM control section modification contract in Arizona highlights the state's role as a significant hub for aerospace and defense manufacturing. Companies like Raytheon have substantial operations there, contributing to a specialized workforce, local supply chains, and technological expertise. While this concentration can foster efficiency and innovation within that specific region, it also presents a potential risk to the broader industrial base if disruptions occur in Arizona (e.g., natural disasters, labor disputes, or major economic shifts). A diversified geographic distribution of critical defense manufacturing can enhance national security resilience by mitigating such localized risks.

Industry Classification

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

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

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: $41,283,960

Exercised Options: $41,283,960

Current Obligation: $41,118,590

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline