DoD awards Raytheon $1.01B for SM-3 Block IA recertification, impacting guided missile manufacturing
Contract Overview
Contract Amount: $1,010,959,343 ($1.0B)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2013-03-26
End Date: 2020-09-30
Contract Duration: 2,745 days
Daily Burn Rate: $368.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: SM-3 BLOCK IA RECERTIFICATION FY13
Place of Performance
Location: TUCSON, PIMA County, ARIZONA, 85756
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $1.01 billion to RAYTHEON COMPANY for work described as: SM-3 BLOCK IA RECERTIFICATION FY13 Key points: 1. Significant contract value of over $1 billion for missile defense system recertification. 2. Sole-source award to Raytheon Company, indicating limited competition. 3. Potential risk associated with a large, sole-source contract for critical defense technology. 4. Spending falls within the Defense sector, specifically missile manufacturing.
Value Assessment
Rating: questionable
The contract value of $1.01 billion is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential alternatives or previous iterations of the SM-3 system.
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 potentially leads to higher costs for the government.
Taxpayer Impact: Taxpayer funds are committed to a single provider without competitive pressure, potentially increasing the overall cost of missile defense.
Public Impact
Ensures continued operational capability of the SM-3 Block IA missile defense system. Supports advanced missile defense technology development and sustainment. Impacts national security by maintaining a critical component of the U.S. missile defense shield.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price negotiation.
- Long contract duration (2013-2020) may not reflect current market conditions.
- Cost-plus-fixed-fee contract type can incentivize cost overruns.
Positive Signals
- Ensures availability of a critical defense asset.
- Leverages Raytheon's specialized expertise in this technology.
Sector Analysis
This contract falls under the Defense sector, specifically within guided missile and space vehicle manufacturing. Spending benchmarks for such specialized defense systems are often high due to R&D and unique requirements.
Small Business Impact
The data does not indicate any subcontracting to small businesses. The primary awardee is a large defense contractor, suggesting limited direct opportunities for small businesses on this specific contract.
Oversight & Accountability
The contract was awarded by the Department of Defense's Missile Defense Agency. Oversight would focus on ensuring performance, cost control, and adherence to contract terms, especially given the sole-source nature.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Missile Defense Agency Programs
Risk Flags
- Sole-source award
- Cost-plus-fixed-fee contract type
- Long contract duration
- Lack of transparency on cost justification
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, az, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $1.01 billion to RAYTHEON COMPANY. SM-3 BLOCK IA RECERTIFICATION FY13
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 $1.01 billion.
What is the period of performance?
Start: 2013-03-26. End: 2020-09-30.
What was the justification for the sole-source award, and were alternatives considered?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent need where only one source can fulfill the requirement. For the SM-3 Block IA recertification, it's likely related to Raytheon's sole development and manufacturing expertise. A thorough review would assess if any competitive alternatives were genuinely explored or if the sole-source path was chosen for expediency.
How does the cost per unit or total cost compare to similar missile defense systems or previous contracts?
Benchmarking this $1.01 billion contract against similar missile defense systems or previous SM-3 contracts is challenging without more detailed cost breakdowns. Given it's a sole-source, cost-plus-fixed-fee award, there's a risk of inflated costs. A comparative analysis would require access to classified or proprietary cost data to determine true value for money.
What is the long-term strategy for ensuring competitive sourcing for future missile defense system upgrades and maintenance?
The long-term strategy should involve fostering competition for future iterations or alternative missile defense solutions. This could include encouraging R&D from other potential contractors, breaking down the system into components that could be sourced competitively, or setting clear timelines for transitioning sole-source contracts to competitive ones as technology matures.
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
Solicitation ID: HQ027612R0002
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: RTX Corp
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: $1,046,492,498
Exercised Options: $1,046,492,498
Current Obligation: $1,010,959,343
Actual Outlays: $537,992
Subaward Activity
Number of Subawards: 1743
Total Subaward Amount: $2,936,651,007
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2013-03-26
Current End Date: 2020-09-30
Potential End Date: 2020-09-30 00:00:00
Last Modified: 2023-06-28
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