DoD awards Raytheon $50.9M for AMRAAM System Improvement, a sole-source effort

Contract Overview

Contract Amount: $50,928,877 ($50.9M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2019-05-25

End Date: 2022-01-31

Contract Duration: 982 days

Daily Burn Rate: $51.9K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ADVANCED MEDIUM RANGE AIR TO AIR MISSILE- SYSTEM IMPROVEMENT RISK REDUCTION EFFORT

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $50.9 million to RAYTHEON COMPANY for work described as: ADVANCED MEDIUM RANGE AIR TO AIR MISSILE- SYSTEM IMPROVEMENT RISK REDUCTION EFFORT Key points: 1. The contract focuses on risk reduction for the Advanced Medium Range Air to Air Missile (AMRAAM) system. 2. Raytheon Company is the sole awardee, indicating a lack of competition. 3. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns. 4. This spending falls within the Guided Missile and Space Vehicle Manufacturing sector.

Value Assessment

Rating: questionable

The Cost Plus Fixed Fee contract type offers less price certainty than fixed-price contracts. Without competitive bidding, it's difficult to benchmark pricing effectively against similar efforts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, meaning Raytheon was the only source considered. This limits price discovery and potentially increases costs for the government.

Taxpayer Impact: The lack of competition and cost-plus contract type raise concerns about taxpayer value for money.

Public Impact

Enhances the capabilities of a critical air-to-air missile system. Supports the U.S. Air Force's strategic defense capabilities. Potential for increased costs due to sole-source and CPFF contract structure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Limited transparency on pricing benchmarks

Positive Signals

Addresses critical system improvement
Supports Air Force readiness

Sector Analysis

This contract is within the Guided Missile and Space Vehicle Manufacturing sector, which is a specialized area of defense manufacturing. Spending benchmarks are difficult to establish without competitive data.

Small Business Impact

The data indicates no specific set-aside for small businesses, and the prime contractor is Raytheon Company, a large business. There is no information on subcontracting to small businesses.

Oversight & Accountability

As a sole-source award with a cost-plus contract, this effort warrants close oversight to ensure costs are reasonable and the scope is managed effectively.

Related Government Programs

Guided Missile and Space Vehicle Manufacturing
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Lack of competition
Cost-plus contract type may lead to higher costs
Potential for cost overruns
Limited transparency on pricing justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $50.9 million to RAYTHEON COMPANY. ADVANCED MEDIUM RANGE AIR TO AIR MISSILE- SYSTEM IMPROVEMENT RISK REDUCTION EFFORT

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 $50.9 million.

What is the period of performance?

Start: 2019-05-25. End: 2022-01-31.

What specific risks does this improvement effort aim to mitigate for the AMRAAM system, and how will success be measured?

The contract aims to reduce risks associated with the AMRAAM system's technological advancements and operational integration. Success will likely be measured through defined milestones, performance metrics, and successful testing phases outlined in the contract's statement of work. Specific details on the risks and metrics are typically found in the detailed contract documentation.

Given the sole-source nature, what mechanisms are in place to ensure Raytheon's costs are fair and reasonable?

The Department of Defense likely employs various mechanisms to ensure cost reasonableness for sole-source, cost-plus contracts. These can include detailed cost proposal analysis, forward pricing rate agreements, audits by the Defense Contract Audit Agency (DCAA), and negotiation of profit/fee based on complexity and risk. However, the inherent lack of competition limits the government's leverage.

How does this investment align with current and future Air Force air combat requirements and modernization priorities?

This investment in the AMRAAM system improvement is likely aligned with the Air Force's need to maintain a technological edge in air-to-air combat. Enhancing the missile's capabilities ensures its effectiveness against evolving threats and maintains its relevance in future combat scenarios, supporting broader modernization efforts for air superiority.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

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: $50,928,877

Exercised Options: $50,928,877

Current Obligation: $50,928,877

Actual Outlays: $10,096,189

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA867515D0135

IDV Type: IDC

Timeline