DoD's $32.3M Missile Defense Technology Risk Reduction Contract Awarded to Raytheon Company

Contract Overview

Contract Amount: $32,283,242 ($32.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2017-04-03

End Date: 2020-11-30

Contract Duration: 1,337 days

Daily Burn Rate: $24.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 17

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: IGF::OT::IGF MULTI-OBJECT KILL VEHICLE TECHNOLOGY RISK REDUCTION

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $32.3 million to RAYTHEON COMPANY for work described as: IGF::OT::IGF MULTI-OBJECT KILL VEHICLE TECHNOLOGY RISK REDUCTION Key points: 1. Contract focused on advancing kill vehicle technology for missile defense systems. 2. Awarded through full and open competition, suggesting a competitive bidding process. 3. Performance period spanned over 1300 days, indicating a substantial development effort. 4. The contract type (Cost Plus Fixed Fee) allows for cost reimbursement plus a fixed fee. 5. Research and Development in Physical, Engineering, and Life Sciences (except Biotechnology) is the primary NAICS code. 6. Contractor, Raytheon Company, is a major defense contractor with extensive experience in aerospace and defense. 7. The contract was awarded to a single entity, Raytheon Company. 8. Geographic location of performance is Arizona.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without detailed cost breakdowns and performance metrics. The Cost Plus Fixed Fee (CPFF) contract type can sometimes lead to cost overruns if not managed tightly, but it is appropriate for R&D where costs are uncertain. Comparing the $32.3 million total award to similar missile defense technology development contracts would provide better context for value for money. The duration of the contract (over 3 years) suggests a significant scope of work.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. The presence of 17 bids suggests a healthy level of interest and competition for this research and development effort. A higher number of bidders generally leads to better price discovery and potentially more innovative solutions for the government.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers, as it likely drove down costs and encouraged multiple companies to propose their best technical approaches and pricing strategies.

Public Impact

The primary beneficiaries are the Department of Defense and the Missile Defense Agency, who will receive advancements in missile defense technology. The services delivered involve research and development to reduce risks associated with multi-object kill vehicle technology. The geographic impact is primarily in Arizona, where the contractor is located and performance likely occurred. Workforce implications include employment for scientists, engineers, and technicians involved in advanced R&D within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize contractors to incur costs without direct financial risk, potentially leading to higher overall expenditures if not closely monitored.
The complexity of R&D projects means that cost and schedule overruns are common, requiring robust oversight to ensure objectives are met.
Reliance on a single large contractor for critical defense technology development could pose long-term strategic risks if competition diminishes in future phases.

Positive Signals

Awarded through full and open competition, indicating a robust market engagement and potential for competitive pricing.
The contractor, Raytheon Company, possesses significant expertise and a strong track record in developing advanced defense systems.
The contract's focus on risk reduction for critical missile defense technology aligns with national security priorities.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on advanced physical sciences and engineering for defense applications. The Missile Defense Agency (MDA) is a key player in this niche, investing heavily in technologies to counter ballistic missile threats. The market for such specialized R&D is dominated by large defense contractors with significant technical capabilities and security clearances. Comparable spending benchmarks would involve looking at other MDA contracts for technology maturation and system development, which often run into tens or hundreds of millions of dollars.

Small Business Impact

This contract does not appear to have a specific small business set-aside component, as indicated by 'sb': false. The award was made to Raytheon Company, a large prime contractor. While prime contractors are often required to subcontract portions of their work to small businesses, the specific subcontracting plan and its impact on the small business ecosystem are not detailed in the provided data. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense and the Missile Defense Agency. Given the R&D nature and CPFF structure, rigorous oversight of costs, progress, and technical milestones is crucial. The contract's duration and complexity suggest that regular reviews and reporting mechanisms would be in place. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract.

Related Government Programs

Missile Defense Systems
Kill Vehicle Technology Development
Advanced Research and Development Contracts
Department of Defense R&D Spending
Raytheon Defense Contracts

Risk Flags

Cost Plus Fixed Fee contract type requires careful monitoring to prevent cost overruns.
Research and Development projects inherently carry technical and schedule risks.
Reliance on a single large contractor for critical technology development.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.3 million to RAYTHEON COMPANY. IGF::OT::IGF MULTI-OBJECT KILL VEHICLE TECHNOLOGY RISK REDUCTION

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 $32.3 million.

What is the period of performance?

Start: 2017-04-03. End: 2020-11-30.

What is Raytheon Company's track record with similar missile defense technology contracts?

Raytheon Company, now part of RTX, has a long and extensive history of developing and producing advanced missile defense systems and technologies for the U.S. Department of Defense and international allies. They have been a prime contractor on numerous programs, including the Patriot missile defense system, THAAD (Terminal High Altitude Area Defense) interceptors, and various components of the Ground-based Midcourse Defense (GMD) system. Their experience spans radar development, missile design, seeker technology, and integration of complex defense architectures. This specific contract for 'MULTI-OBJECT KILL VEHICLE TECHNOLOGY RISK REDUCTION' aligns directly with their core competencies and past performance in developing interceptor technologies critical for defeating advanced threats. Their established infrastructure, technical expertise, and security clearances position them as a leading candidate for such high-stakes R&D efforts.

How does the $32.3 million award compare to other R&D contracts for missile defense technology?

The $32.3 million award for this specific risk reduction effort is within the typical range for advanced technology development contracts within the missile defense sector. Major programs managed by the Missile Defense Agency (MDA) often involve multiple contract phases, with initial research, design, and risk reduction efforts frequently awarded in the tens of millions of dollars. Subsequent phases, such as prototype development, testing, and production, can escalate into hundreds of millions or even billions of dollars. For instance, contracts for developing new interceptor missiles, advanced sensors, or sophisticated command and control systems can easily exceed this amount. Therefore, $32.3 million for a focused R&D effort on kill vehicle technology appears reasonable as an initial or intermediate investment in advancing critical capabilities.

What are the primary risks associated with this type of R&D contract, and how are they mitigated?

The primary risks associated with this type of R&D contract, particularly one focused on 'MULTI-OBJECT KILL VEHICLE TECHNOLOGY RISK REDUCTION' and using a Cost Plus Fixed Fee (CPFF) structure, include technical uncertainty, cost overruns, and schedule delays. Technical risks stem from the inherent difficulty in developing novel technologies that must perform reliably under extreme conditions. Cost and schedule risks are amplified by the CPFF structure, which reimburses the contractor for allowable costs plus a fixed fee, potentially reducing the incentive for strict cost control if oversight is lax. Mitigation strategies typically involve robust government oversight of technical progress and expenditures, clearly defined milestones and deliverables, regular performance reviews, and strong program management. The 'risk reduction' aspect of the contract itself implies a focus on identifying and addressing potential technical challenges early in the development lifecycle.

What is the expected program effectiveness or outcome of this contract?

The expected outcome of this contract is the maturation of multi-object kill vehicle technology, specifically aimed at reducing the technical risks associated with its development and deployment. Kill vehicles are the component of a missile defense interceptor responsible for physically destroying an incoming ballistic missile. Multi-object kill vehicles are designed to engage multiple targets simultaneously or in rapid succession, which is crucial for countering advanced threats like hypersonic missiles or salvos of ballistic missiles. Successful completion of this contract should result in a clearer understanding of the technology's feasibility, improved design concepts, validated performance parameters, and a reduced likelihood of encountering insurmountable technical hurdles in future development or production phases. This directly contributes to enhancing the effectiveness and reliability of U.S. missile defense capabilities.

How has federal spending on missile defense R&D evolved over the past decade?

Federal spending on missile defense R&D has remained a significant and relatively consistent priority for the Department of Defense over the past decade, driven by evolving geopolitical threats and the need to counter ballistic and emerging missile technologies. While specific budget allocations fluctuate annually based on program priorities, technological advancements, and strategic assessments, the overall investment has been substantial, often in the tens of billions of dollars annually for the Missile Defense Agency (MDA) and related research efforts across services. Spending has focused on areas such as interceptor development, boost-phase and mid-course defense technologies, sensor systems, command and control architectures, and countermeasures. There has been a continuous push towards developing more agile, multi-target capable, and resilient defense systems, reflecting the increasing sophistication of potential adversaries' missile capabilities. This contract represents a small but vital component of that larger, ongoing investment.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HQ0147-15-BAA

Offers Received: 17

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: $59,608,722

Exercised Options: $59,608,722

Current Obligation: $32,283,242

Actual Outlays: $920,313

Subaward Activity

Number of Subawards: 63

Total Subaward Amount: $41,552,057

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline