DoD awards $1.33B contract for ANTPY-2 radars, with Raytheon Company as sole provider, extending through 2028

Contract Overview

Contract Amount: $1,327,248,620 ($1.3B)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2011-12-30

End Date: 2028-12-31

Contract Duration: 6,211 days

Daily Burn Rate: $213.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: UCA FOR THE PRODUCTION OF ANTPY-2 RADARS #9 AND #10

Place of Performance

Location: WOBURN, MIDDLESEX County, MASSACHUSETTS, 01801

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $1.33 billion to RAYTHEON COMPANY for work described as: UCA FOR THE PRODUCTION OF ANTPY-2 RADARS #9 AND #10 Key points: 1. Contract awarded to a single vendor suggests limited market competition, potentially impacting price negotiation. 2. The long duration of the contract (over 15 years) requires careful monitoring for cost overruns and evolving technological needs. 3. Fixed-price contract type offers cost certainty for the government, shifting performance risk to the contractor. 4. The ANTPY-2 radar system is critical for missile defense, indicating a high-stakes procurement with significant national security implications. 5. The absence of small business participation raises questions about opportunities for smaller firms in this high-value defense sector. 6. The contract's value places it among significant procurements within the defense electronics manufacturing industry.

Value Assessment

Rating: fair

The contract's total value of $1.33 billion over its extended period is substantial. Without specific benchmarks for ANTPY-2 radar production or comparable sole-source procurements, a definitive value-for-money assessment is challenging. The firm fixed-price structure provides some cost predictability, but the long duration and sole-source nature warrant scrutiny to ensure the government is not overpaying due to lack of competition. Further analysis would require comparing unit costs to similar radar systems or historical pricing for this specific system.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Raytheon Company, was considered. This approach is typically used when a unique capability is required, or when only one source can fulfill the requirement. The lack of competition means that the government did not benefit from a bidding process, which could have led to lower prices or more innovative solutions from multiple vendors. The justification for sole-source procurement would need to be thoroughly reviewed to understand why other potential sources were not engaged.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competitive pressures to secure the best possible pricing for taxpayers. This can result in higher costs compared to a competed procurement.

Public Impact

The primary beneficiaries are the Department of Defense and its Missile Defense Agency, receiving advanced radar systems crucial for national security. The contract ensures the continued production and availability of ANTPY-2 radars, vital for detecting and tracking ballistic missiles. The geographic impact is primarily national, supporting U.S. missile defense capabilities, though the systems themselves may be deployed globally. Workforce implications include sustained employment for specialized engineers, technicians, and manufacturing personnel at Raytheon and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and innovation.
Long contract duration (over 15 years) increases risk of cost escalation and technological obsolescence.
Lack of small business participation may limit broader economic impact and subcontracting opportunities.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award to an established contractor with likely expertise in radar systems.
Critical national security system ensures continued defense capabilities.

Sector Analysis

The ANTPY-2 radar system falls within the broader defense electronics and aerospace manufacturing sector. This sector is characterized by high R&D investment, long product development cycles, and significant government procurement. Companies like Raytheon are major players, often operating in specialized niches. Comparable spending benchmarks would involve looking at other large, sole-source procurements for advanced defense systems or major weapon platforms, which often run into billions of dollars.

Small Business Impact

This contract does not appear to include specific small business set-asides, nor is there an indication of mandated subcontracting goals for small businesses. As a sole-source award to a large prime contractor, the opportunities for small businesses would likely be through subcontracts awarded by Raytheon. The absence of explicit set-asides means that the direct impact on the small business ecosystem for this specific contract is likely limited, though Raytheon's overall subcontracting practices would be a factor.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices, with potential involvement from the Missile Defense Agency's oversight bodies. Inspector General investigations could be initiated if fraud, waste, or abuse is suspected. Transparency may be limited due to the sole-source nature, but contract modifications, performance reports, and payment data are typically subject to internal review and potentially public reporting through systems like FPDS.

Related Government Programs

Missile Defense Systems
Advanced Radar Technology
Department of Defense Procurement
Sole-Source Contracts
Aerospace and Defense Manufacturing

Risk Flags

Sole-source award
Long contract duration
Potential for cost overruns
Risk of technological obsolescence

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.33 billion to RAYTHEON COMPANY. UCA FOR THE PRODUCTION OF ANTPY-2 RADARS #9 AND #10

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Missile Defense Agency).

What is the total obligated amount?

The obligated amount is $1.33 billion.

What is the period of performance?

Start: 2011-12-30. End: 2028-12-31.

What is the historical spending pattern for ANTPY-2 radars, and how does this $1.33B contract compare?

The provided data indicates a single definitive contract valued at $1.33 billion for the production of ANTPY-2 radars #9 and #10, with an award date of December 30, 2011, and an estimated completion date of December 31, 2028. This suggests a long-term, high-value procurement. Without access to historical contract data specifically for earlier ANTPY-2 radars or other production runs, a direct comparison of spending patterns is difficult. However, the substantial value and extended duration of this single contract point to a significant and ongoing investment by the Department of Defense in this particular radar technology. Future analysis could involve examining prior contracts for the same system or similar radar technologies to establish a more comprehensive spending trend.

What is Raytheon Company's track record with producing ANTPY-2 radars or similar systems?

Raytheon Company is a major defense contractor with extensive experience in radar systems, including those for missile defense applications. The ANTPY-2 radar is a known component within the U.S. missile defense architecture, and Raytheon's role as the sole-source provider for this specific contract suggests they possess the necessary technical expertise, manufacturing capabilities, and potentially proprietary technology required for its production. Their broader portfolio includes a wide range of advanced sensor and defense systems, indicating a strong track record in complex defense electronics. A deeper dive into their performance on previous contracts for similar radar systems, including any past issues or successes, would provide further context on their reliability and capability for this ongoing production effort.

How does the $1.33B value compare to the market size for advanced radar systems?

The $1.33 billion awarded to Raytheon for ANTPY-2 radars represents a significant investment within the specialized market of advanced defense radar systems. While the overall market size for defense electronics is substantial, the niche for high-end missile defense radars is more concentrated. This contract value is indicative of the high cost associated with developing and producing sophisticated military technology. Comparable procurements for similar advanced radar systems or integrated defense platforms often reach similar or even higher figures. The market is typically dominated by a few large prime contractors, and sole-source awards like this, while limiting competition, reflect the specialized nature and high barriers to entry in this segment of the defense industry.

What are the primary risks associated with this sole-source, long-duration contract?

The primary risks associated with this sole-source, long-duration contract are multifaceted. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher unit costs than might be achieved in a competed environment. This lack of competition can also stifle innovation. Secondly, the extended duration (over 15 years from award to estimated completion) increases the risk of cost growth due to inflation, unforeseen technical challenges, or changes in material costs. There's also a risk of technological obsolescence; the radar technology might become outdated before the contract concludes, requiring costly upgrades or replacements. Finally, sole-source contracts can sometimes indicate a lack of available alternatives or a dependency on a single supplier, which poses a strategic risk to the government.

What is the justification for awarding this contract as sole-source?

The justification for awarding this contract as sole-source is not explicitly detailed in the provided data snippet. However, sole-source procurements are typically justified under specific circumstances outlined in federal acquisition regulations. Common reasons include: the requirement for a unique capability or specialized technology that only one source can provide; a critical need for standardization with existing systems; or a lack of adequate competition due to market limitations or proprietary technology. For a system like the ANTPY-2 radar, the justification likely centers on its specific technical requirements, integration needs within the broader missile defense system, and potentially proprietary aspects of Raytheon's design and manufacturing processes that make it difficult or impossible for other firms to replicate without significant investment and time.

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: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HQ014711R0012

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 225 PRESIDENTIAL WAY, WOBURN, MA, 01801

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: $2,461,588,999

Exercised Options: $2,459,047,978

Current Obligation: $1,327,248,620

Actual Outlays: $148,383,705

Subaward Activity

Number of Subawards: 3943

Total Subaward Amount: $1,503,800,712

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline