Raytheon awarded $23.1M for Paveway munitions, with no competition and a firm fixed price contract

Contract Overview

Contract Amount: $23,132,503 ($23.1M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2020-03-03

End Date: 2025-03-31

Contract Duration: 1,854 days

Daily Burn Rate: $12.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: NON INVENTORY WEAPONS TOTAL PACKAGE APPROACH PAVEWAY FAMILY OF WEAPONS IDIQ: 2020 GBU-58 PROCUREMENT

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $23.1 million to RAYTHEON COMPANY for work described as: NON INVENTORY WEAPONS TOTAL PACKAGE APPROACH PAVEWAY FAMILY OF WEAPONS IDIQ: 2020 GBU-58 PROCUREMENT Key points: 1. Contract awarded to a single, established defense contractor, raising questions about competitive pricing. 2. The contract is for a specific weapons system, indicating a focused procurement rather than broad category spending. 3. A firm fixed price contract suggests cost certainty for the government, but may limit potential savings from competition. 4. The duration of the contract (over 5 years) implies a long-term need for these munitions. 5. Awarded as a delivery order under an existing IDIQ, suggesting a streamlined process for a known requirement. 6. The absence of small business set-aside indicates this procurement was not specifically targeted to boost small business participation.

Value Assessment

Rating: fair

The contract value of $23.1 million for Paveway munitions appears to be a standard procurement for this type of defense equipment. Without specific details on the quantity of munitions or the exact configuration, a direct value-for-money assessment is challenging. However, given the sole-source nature and firm fixed price, the government has locked in a price but may have foregone potential savings that could have resulted from a competitive bidding process. Benchmarking against similar sole-source procurements of Paveway systems would be necessary for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'NON INVENTORY WEAPONS TOTAL PACKAGE APPROACH PAVEWAY FAMILY OF WEAPONS IDIQ' and was not competed. The data indicates it was not available for competition, suggesting a sole-source justification was likely applied, possibly due to the unique nature of the weapon system or a prior sole-source award for the IDIQ itself. The lack of competition means there were no other bidders to compare against, limiting price discovery and potentially leading to higher costs than if multiple vendors had vied for the contract.

Taxpayer Impact: The absence of competition means taxpayers did not benefit from potential cost reductions that could arise from a competitive bidding environment. The government paid the price set by the sole provider without the leverage of alternative offers.

Public Impact

The primary beneficiaries are the U.S. Air Force, receiving essential munitions for operational readiness. The services delivered include the procurement of GBU-58 Paveway munitions, critical for air-to-ground strike capabilities. The geographic impact is primarily within the United States, with potential deployment to operational theaters globally. Workforce implications are likely within Raytheon's manufacturing facilities, supporting production jobs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher unit costs for taxpayers.
Firm fixed price contract limits potential for cost savings if contractor's actual costs are lower than anticipated.
Long contract duration (over 5 years) could lock the government into a specific technology or vendor, potentially missing out on newer, more cost-effective alternatives.

Positive Signals

Firm fixed price contract provides cost certainty for the government.
Awarded under an existing IDIQ, suggesting a streamlined procurement process for a known requirement.
Procurement of essential munitions ensures military readiness and operational capability.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on the manufacturing of guided munitions. The market for precision-guided munitions is dominated by a few large defense contractors. Raytheon Company is a major player in this space, producing a range of air-to-ground weapons. Comparable spending benchmarks would involve analyzing other procurements of similar Paveway variants or other guided bomb units by the Department of Defense.

Small Business Impact

This contract does not appear to include a small business set-aside, as indicated by 'sb': false. Therefore, there are no direct subcontracting implications specifically mandated for small businesses through this award. The prime contractor, Raytheon, may still engage small businesses in its supply chain, but it is not a requirement of this specific contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. As a Department of Defense contract, it is also subject to oversight by the Department of Defense Inspector General. Transparency is facilitated through contract databases like FPDS, though detailed justifications for sole-source awards are not always publicly accessible. Accountability measures are inherent in the firm fixed price structure and delivery schedules.

Related Government Programs

Paveway II/III Guided Bomb Units
Air-to-Ground Munitions Procurement
Department of Defense IDIQ Contracts
Raytheon Company Defense Contracts

Risk Flags

Sole-source award
Lack of competition
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.1 million to RAYTHEON COMPANY. NON INVENTORY WEAPONS TOTAL PACKAGE APPROACH PAVEWAY FAMILY OF WEAPONS IDIQ: 2020 GBU-58 PROCUREMENT

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 $23.1 million.

What is the period of performance?

Start: 2020-03-03. End: 2025-03-31.

What is the specific quantity and unit cost of the GBU-58 munitions being procured under this contract?

The provided data does not specify the exact quantity of GBU-58 munitions or the precise unit cost. The total award amount is $23,132,503. The contract type is Firm Fixed Price (FFP), which means the price is set and not subject to adjustment based on the contractor's actual costs. To determine the unit cost, one would need to divide the total award by the number of units procured. Without the quantity, a precise unit cost cannot be calculated from the given information. This lack of detail is common in aggregated contract award data but hinders granular cost analysis.

What is the justification for awarding this contract on a sole-source basis?

The data indicates the contract was 'NOT AVAILABLE FOR COMPETITION,' strongly suggesting a sole-source award. While the specific justification is not detailed, common reasons for sole-source procurements of weapon systems include unique capabilities, proprietary technology, urgent need where only one source can meet the requirement, or if the procurement is a follow-on to a previous sole-source award where the original justification still applies. For the Paveway family of weapons, it's possible that Raytheon holds specific patents or manufacturing expertise that makes them the only viable source, or that the IDIQ contract under which this delivery order was issued was itself awarded sole-source.

How does the $23.1 million contract value compare to historical spending on Paveway munitions?

Comparing this $23.1 million award to historical spending requires access to historical contract data for Paveway munitions. The Paveway family of weapons has been in production and use for many years, with numerous contracts awarded by the DoD. A comprehensive analysis would involve aggregating all prior awards for similar Paveway variants (like the GBU-58) to establish a baseline. This single award represents a portion of the total lifecycle spending. Without a broader dataset, it's difficult to definitively state if this specific award is high, low, or average relative to past procurements. However, the duration of the contract (ending March 2025) suggests it covers a significant period of supply.

What are the performance risks associated with this contract for the Department of Defense?

Performance risks for the Department of Defense (DoD) in this contract are relatively moderate, given the nature of the product and the contractor. The primary risk is ensuring timely delivery of munitions that meet all specified performance requirements. Since Raytheon is an established defense contractor with extensive experience producing the Paveway family, the risk of technical failure or manufacturing defects is likely low. However, potential risks could include supply chain disruptions affecting production timelines, unforeseen cost increases if the firm fixed price was based on optimistic assumptions, or geopolitical events impacting delivery schedules or operational needs. The long contract duration also introduces a risk of obsolescence if newer technologies emerge rapidly.

What is Raytheon's track record with the Paveway family of weapons?

Raytheon Company has a long and established track record as the primary manufacturer and supplier of the Paveway family of precision-guided munitions. They have consistently produced and delivered these weapons systems to the U.S. military and allied nations for decades. Their experience encompasses various Paveway variants, including laser-guided bombs like the GBU-58. Raytheon's history with this product line is characterized by continuous upgrades and adaptations to meet evolving battlefield requirements. Their extensive experience suggests a high level of technical expertise and production capability, making them a reliable, albeit sole, source for these munitions.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

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: $23,132,503

Exercised Options: $23,132,503

Current Obligation: $23,132,503

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA868118D0001

IDV Type: IDC

Timeline