DoD Awards Raytheon $49.6M for Enhanced Coyote Interceptors, Boosting Missile Defense Capabilities

Contract Overview

Contract Amount: $49,565,594 ($49.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2021-05-04

End Date: 2023-03-31

Contract Duration: 696 days

Daily Burn Rate: $71.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THE PURPOSE OF THIS TASK IS TO PRODUCE, PROCURE, AND MODIFY THE ENHANCED COYOTE BLOCK 2 AND BLOCK 3 INTERCEPTORS.

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $49.6 million to RAYTHEON COMPANY for work described as: THE PURPOSE OF THIS TASK IS TO PRODUCE, PROCURE, AND MODIFY THE ENHANCED COYOTE BLOCK 2 AND BLOCK 3 INTERCEPTORS. Key points: 1. Significant investment in advanced missile defense technology. 2. Raytheon Company is a major defense contractor, indicating established capabilities. 3. Potential risks include cost overruns and performance issues in complex defense systems. 4. Spending falls within the Defense sector, specifically missile systems.

Value Assessment

Rating: good

The award of $49.6 million for delivery orders under a larger contract suggests a competitive pricing environment. Benchmarking against similar missile interceptor contracts would provide further insight into value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically drives competitive pricing and ensures the government receives the best value. The specific pricing discovery mechanisms within this competitive process are not detailed.

Taxpayer Impact: Taxpayer funds are being allocated to enhance national defense capabilities, specifically missile interceptors, contributing to security but requiring careful oversight of expenditures.

Public Impact

Enhances national security through advanced missile defense technology. Supports the development and production of critical defense hardware. Potential for job creation within the defense industry and related supply chains.

Waste & Efficiency Indicators

Waste Risk Score: 71 / 10

Warning Flags

Cost Plus Fixed Fee contract type can incentivize contractor to increase costs.
Long contract duration (696 days) increases risk of scope creep and cost escalation.
Small business participation is not indicated.

Positive Signals

Awarded under full and open competition.
Enhances critical defense capabilities.
Raytheon is an experienced defense contractor.

Sector Analysis

This contract falls within the Engineering Services sector, specifically related to defense microelectronics and missile systems. Spending benchmarks for similar advanced weapon system development and procurement would be relevant for comparison.

Small Business Impact

The data indicates that small business participation was not a factor in this specific award. Future contracts of this nature should explore opportunities for small business involvement to foster innovation and economic growth.

Oversight & Accountability

The Department of Defense and the Defense Microelectronics Activity are responsible for oversight. The use of delivery orders under a larger contract necessitates diligent monitoring of performance, cost, and schedule to ensure accountability.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Microelectronics Activity Programs

Risk Flags

Cost Plus Fixed Fee contract type.
Long contract duration.
Lack of specified small business participation.
Potential for performance issues in advanced technology development.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $49.6 million to RAYTHEON COMPANY. THE PURPOSE OF THIS TASK IS TO PRODUCE, PROCURE, AND MODIFY THE ENHANCED COYOTE BLOCK 2 AND BLOCK 3 INTERCEPTORS.

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Microelectronics Activity).

What is the total obligated amount?

The obligated amount is $49.6 million.

What is the period of performance?

Start: 2021-05-04. End: 2023-03-31.

What is the projected cost per interceptor unit, and how does it compare to industry benchmarks for similar systems?

The provided data does not specify the number of interceptors procured, making a per-unit cost calculation impossible. To assess value, a detailed breakdown of the total contract value against the quantity and specifications of the Enhanced Coyote Block 2 and Block 3 interceptors is needed. This would allow for comparison with publicly available cost data for comparable missile systems.

What are the key performance metrics for the Enhanced Coyote interceptors, and what are the potential risks if these metrics are not met?

Key performance metrics typically include range, accuracy, warhead effectiveness, and reliability under various environmental conditions. Risks of not meeting these metrics could range from mission failure and loss of assets to increased costs for redesign or replacement. A thorough review of the contract's technical requirements and testing protocols is essential to understand these risks.

How does the Cost Plus Fixed Fee (CPFF) contract structure impact the government's ability to control costs for this complex defense procurement?

The CPFF structure means the government pays the contractor's allowable costs plus a fixed fee. While it allows for flexibility in complex projects where costs are uncertain, it can incentivize cost overruns as the contractor's profit is fixed. Robust government oversight and negotiation are crucial to manage costs effectively under this type of contract.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HQ072715R0001

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp

Address: 2000 E EL SEGUNDO BLVD, EL SEGUNDO, CA, 90245

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: $49,565,594

Exercised Options: $49,565,594

Current Obligation: $49,565,594

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $62,017

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HQ072716D0006

IDV Type: IDC

Timeline