DoD's $2.7B AMRAAM Improvement Program: R&D Spending for Advanced Missile Systems
Contract Overview
Contract Amount: $26,959,476 ($27.0M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2022-09-15
End Date: 2026-11-30
Contract Duration: 1,537 days
Daily Burn Rate: $17.5K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: ADVANCED MEDIUM RANGE AIR TO AIR MISSILE SYSTEM- SYSTEM IMPROVEMENT PROGRAM 3 TAPE 2
Place of Performance
Location: TUCSON, PIMA County, ARIZONA, 85756
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $27.0 million to RAYTHEON COMPANY for work described as: ADVANCED MEDIUM RANGE AIR TO AIR MISSILE SYSTEM- SYSTEM IMPROVEMENT PROGRAM 3 TAPE 2 Key points: 1. Significant investment in advanced missile technology, indicating a focus on maintaining air superiority. 2. Sole-source award to Raytheon Company raises questions about competitive pricing and innovation. 3. Long-term contract duration (2026) suggests a sustained need for system upgrades. 4. High R&D spending in a critical defense sector.
Value Assessment
Rating: questionable
The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed tightly. Without competitive benchmarking, it's difficult to assess if the $2.7 billion price is reasonable for the R&D scope.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, meaning the Department of Defense did not solicit offers from multiple vendors. This limits price discovery and potentially reduces the incentive for the contractor to offer the most competitive price.
Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for the research and development of the AMRAAM system improvements.
Public Impact
Enhances U.S. Air Force's air-to-air combat capabilities. Supports technological advancement in defense systems. Potential for job creation within the defense industry. Ensures continued modernization of critical military assets.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type risk
- Long contract duration
Positive Signals
- Investment in critical defense technology
- Potential for technological superiority
Sector Analysis
This contract falls under Research and Development in Physical, Engineering, and Life Sciences. Defense R&D spending is a significant portion of the federal budget, with a focus on maintaining technological advantages.
Small Business Impact
The data does not indicate any specific provisions or set-asides for small businesses in this sole-source contract. Opportunities for small businesses may be limited unless they are subcontractors to the prime.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure cost control and adherence to the research and development objectives. The Department of Defense should ensure robust performance monitoring.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Sole-source award limits competition.
- Cost-plus contract type can lead to cost overruns.
- Long contract duration increases exposure to changing requirements.
- Lack of small business participation noted.
- R&D scope may be subject to change.
Tags
research-and-development-in-the-physical, department-of-defense, az, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $27.0 million to RAYTHEON COMPANY. ADVANCED MEDIUM RANGE AIR TO AIR MISSILE SYSTEM- SYSTEM IMPROVEMENT PROGRAM 3 TAPE 2
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 $27.0 million.
What is the period of performance?
Start: 2022-09-15. End: 2026-11-30.
What is the projected return on investment for this R&D spending in terms of enhanced combat effectiveness?
Quantifying the ROI for defense R&D is complex, involving factors like improved missile range, accuracy, and countermeasures. While direct financial returns are not applicable, the investment aims to enhance strategic deterrence and reduce risks to aircrews, providing significant, albeit non-monetary, value.
What are the specific risks associated with a sole-source, cost-plus fixed fee contract for advanced missile R&D?
The primary risks include potential cost overruns due to the cost-plus nature, where the contractor is reimbursed for allowable costs plus a fixed fee. The sole-source aspect removes competitive pressure, potentially leading to inflated prices and reduced innovation. Scope creep is also a risk if R&D objectives are not clearly defined and managed.
How does this investment align with current geopolitical threats and the Air Force's long-term modernization strategy?
This investment directly supports the Air Force's strategy to maintain air superiority against evolving threats. The AMRAAM improvement program addresses the need for advanced weapon systems capable of engaging modern adversary aircraft and missiles, ensuring the U.S. maintains a technological edge in critical theaters.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
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: RTX Corp
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: $26,959,476
Exercised Options: $26,959,476
Current Obligation: $26,959,476
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA867520D0002
IDV Type: IDC
Timeline
Start Date: 2022-09-15
Current End Date: 2026-11-30
Potential End Date: 2026-11-30 00:00:00
Last Modified: 2025-12-15
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