Raytheon Awarded $79.5M for Guided Missiles, Facing Limited Competition

Contract Overview

Contract Amount: $58,347,389 ($58.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2005-02-10

End Date: 2012-12-31

Contract Duration: 2,881 days

Daily Burn Rate: $20.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200505!000047!5700!FA8681!AAC/YUK !FA868105C0075 !A!N! !N! ! !20050210!20080531!794598573!794598573!001339159!N!RAYTHEON COMPANY !1151 E HERMANS RD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA !ARIZONA !+000010490029!N!N!000010490029!1410!GUIDED MISSILES !A5 !WEAPONS !000 !* !336414!E! !3! ! ! ! ! !20200930!B!D! !A! !D!N!J!1!001!N!1B!Z!Y!A! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!Y! ! ! !Y! ! !0001! !

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $58.3 million to RAYTHEON COMPANY for work described as: 200505!000047!5700!FA8681!AAC/YUK !FA868105C0075 !A!N! !N! ! !20050210!20080531!794598573!794598573!001339159!N!RAYTHEON COMPANY !1151 E HERMANS RD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA… Key points: 1. Contract awarded to Raytheon Company for guided missile manufacturing. 2. Significant value of $79.5 million over a 10-year period. 3. Limited competition due to the nature of specialized defense contracts. 4. Sector is Defense, specifically guided missiles and weapons systems.

Value Assessment

Rating: fair

The contract value of $79.5 million over 10 years suggests a substantial but potentially variable annual spend. Benchmarking against similar large-scale missile system contracts is difficult without more specific technical details.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not competed, indicating a limited competition approach. This likely stems from specialized requirements or existing contractor relationships, potentially impacting price discovery and overall value for money.

Taxpayer Impact: Taxpayer funds are allocated to a sole-source or limited-source contract for critical defense equipment, with potential for higher costs due to lack of competitive bidding.

Public Impact

Ensures continued supply of guided missile technology for national defense. Supports a major defense contractor and its associated workforce. Represents a significant investment in the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of full and open competition
Long contract duration may not reflect current market prices
Potential for cost overruns in specialized defense manufacturing

Positive Signals

Addresses critical national security needs
Supports established defense industrial base

Sector Analysis

This contract falls within the Defense sector, specifically the manufacturing of guided missiles and space vehicles. Spending in this area is driven by national security requirements and technological advancements, often involving high R&D costs and specialized production.

Small Business Impact

No direct indication of small business participation is provided in the data. Large defense contracts often involve complex supply chains where subcontracting opportunities for small businesses may exist, but are not explicitly detailed here.

Oversight & Accountability

The contract is managed by the Defense Contract Management Agency (DCMA), indicating oversight. However, the limited competition aspect warrants scrutiny to ensure fair pricing and effective use of funds.

Related Government Programs

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

Risk Flags

Limited competition raises concerns about price reasonableness.
Long contract duration may not align with rapid technological advancements.
Lack of transparency on specific justification for sole-source/limited competition.
Potential for cost overruns in specialized defense manufacturing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $58.3 million to RAYTHEON COMPANY. 200505!000047!5700!FA8681!AAC/YUK !FA868105C0075 !A!N! !N! ! !20050210!20080531!794598573!794598573!001339159!N!RAYTHEON COMPANY !1151 E HERMANS RD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA !ARIZONA !+000010490029!N!N!000010490029!1410!GUIDED MISSILES !A5 !WEAPONS !000 !* !336414!E! !3! ! ! ! ! !202

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 $58.3 million.

What is the period of performance?

Start: 2005-02-10. End: 2012-12-31.

What specific factors justified the limited competition for this guided missile contract, and how were these factors assessed to ensure fair and reasonable pricing?

Justification for limited competition typically involves factors such as unique technical capabilities, proprietary technology, or urgent national security needs that only a specific contractor can meet. The contracting agency would have conducted a market research and justification process to validate these claims. Fair and reasonable pricing is usually determined through cost analysis, comparison to previous contracts, or benchmarking against similar systems, though transparency on these specific methods is often limited in public data.

How does the $79.5 million contract value, spread over approximately 10 years, compare to industry benchmarks for similar guided missile systems, considering technological advancements and inflation?

Benchmarking this contract's value is challenging without detailed specifications of the missiles and their capabilities. However, a $79.5 million total contract value over a decade suggests an average annual spend of roughly $8 million. This figure needs to be contextualized against the complexity, quantity, and technological sophistication of the missiles. Inflation and rapid technological obsolescence in defense can significantly impact the 'value' aspect over such a long period, potentially making older systems less cost-effective if not managed proactively.

What are the potential risks associated with a long-duration, limited-competition contract for advanced weaponry, particularly concerning technological relevance and cost control?

Risks include technological obsolescence, where the contracted system may become outdated before the contract ends, diminishing its effectiveness. Cost control is also a concern, as limited competition can reduce the incentive for the contractor to minimize expenses. Furthermore, the government might be locked into a specific technology or vendor, limiting flexibility and potentially paying a premium compared to a more competitive market.

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, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline