DoD Awards $350M to Raytheon for Missile Defense Obsolescence Mitigation

Contract Overview

Contract Amount: $350,788,430 ($350.8M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2019-03-04

End Date: 2024-07-31

Contract Duration: 1,976 days

Daily Burn Rate: $177.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: KSA FMS OBSOLESCENCE/LONG LEAD - OBSOLESCENCE MITIGATION, PROGRAM INFRASTRUCTURE, EXPORTABILITY, LONG LEAD MATERIAL, AND COUNTRY SUPPORT

Place of Performance

Location: WOBURN, MIDDLESEX County, MASSACHUSETTS, 01801

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $350.8 million to RAYTHEON COMPANY for work described as: KSA FMS OBSOLESCENCE/LONG LEAD - OBSOLESCENCE MITIGATION, PROGRAM INFRASTRUCTURE, EXPORTABILITY, LONG LEAD MATERIAL, AND COUNTRY SUPPORT Key points: 1. Significant investment in long-lead material and program infrastructure for missile defense. 2. Sole-source award to Raytheon Company highlights potential lack of competition. 3. Contract duration of 1976 days suggests a long-term, complex program. 4. Focus on obsolescence mitigation is critical for maintaining defense capabilities.

Value Assessment

Rating: fair

The contract value of $350.8M over nearly 2000 days is substantial. Without comparable contracts for similar obsolescence mitigation efforts, it's difficult to definitively assess pricing, but the long duration and sole-source nature warrant scrutiny.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Raytheon Company. This limits price discovery and may result in higher costs for taxpayers compared to a competitive process.

Taxpayer Impact: The lack of competition for this large contract raises concerns about potential overspending and the efficient use of taxpayer funds.

Public Impact

Ensures continued operational readiness of critical missile defense systems. Addresses potential supply chain vulnerabilities for aging defense equipment. Supports U.S. technological advantage in missile defense capabilities. Potential for cost overruns due to sole-source award. Impact on future defense procurement strategies if competition is consistently bypassed.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Long contract duration
Lack of competition details

Positive Signals

Addresses critical obsolescence issues
Supports national security
Focus on long-lead material

Sector Analysis

This contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector. Spending in defense systems, particularly for advanced capabilities like missile defense, is a significant portion of the DoD budget.

Small Business Impact

The data indicates this is a large prime contract awarded to Raytheon Company, a major defense contractor. There is no information provided on subcontracting opportunities for small businesses within this award.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure fair pricing and effective program execution. Transparency regarding the justification for not competing the contract is essential for accountability.

Related Government Programs

Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Department of Defense Contracting
Missile Defense Agency Programs

Risk Flags

Lack of competition may lead to higher costs.
Long contract duration increases risk of cost escalation.
Potential for vendor lock-in.
Limited transparency on justification for sole-source award.
Dependency on a single contractor for critical defense components.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $350.8 million to RAYTHEON COMPANY. KSA FMS OBSOLESCENCE/LONG LEAD - OBSOLESCENCE MITIGATION, PROGRAM INFRASTRUCTURE, EXPORTABILITY, LONG LEAD MATERIAL, AND COUNTRY SUPPORT

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 $350.8 million.

What is the period of performance?

Start: 2019-03-04. End: 2024-07-31.

What is the specific justification for the sole-source award, and were any market research efforts conducted to identify potential competitors?

The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the unavailability of alternatives. Detailed market research should be documented to confirm that no other responsible sources could satisfy the government's needs. Without this documentation, it's difficult to ascertain if the government fully explored competitive options.

How will the government ensure cost-effectiveness and prevent potential overruns given the long duration and lack of competition?

Cost-effectiveness in sole-source, long-duration contracts is typically managed through robust contract surveillance, performance metrics, and potentially incentive fee structures. Regular reviews of cost proposals, independent government cost estimates, and strict adherence to contract terms are crucial. Transparency in reporting and regular audits can also help mitigate risks.

What are the key performance indicators (KPIs) for this contract, and how will their achievement be measured to ensure program effectiveness?

Key performance indicators would likely focus on the successful mitigation of obsolescence for specified components, timely delivery of long-lead materials, and the maintenance of program infrastructure. Effectiveness would be measured by the continued operational readiness of the missile defense systems, reduced supply chain risks, and adherence to technical specifications and delivery schedules.

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: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HQ014719R0018

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

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: $350,788,430

Exercised Options: $350,788,430

Current Obligation: $350,788,430

Subaward Activity

Number of Subawards: 589

Total Subaward Amount: $404,406,206

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline