DoD Awards Raytheon $91.4M for Sustaining Engineering of Missile Defense Systems

Contract Overview

Contract Amount: $91,390,053 ($91.4M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2021-04-01

End Date: 2026-09-30

Contract Duration: 2,008 days

Daily Burn Rate: $45.5K/day

Competition Type: NOT COMPETED

Pricing Type: COST NO FEE

Sector: Defense

Official Description: IIA - SUSTAINING ENGINEERING B&P FOR BUILD 8/9/EADL

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $91.4 million to RAYTHEON COMPANY for work described as: IIA - SUSTAINING ENGINEERING B&P FOR BUILD 8/9/EADL Key points: 1. Significant contract value for long-term engineering support. 2. Sole-source award raises questions about competition and price discovery. 3. Potential for cost overruns given the contract type and duration. 4. Focus on critical missile defense technology.

Value Assessment

Rating: questionable

The contract type is Cost No Fee, which offers limited incentive for cost control. The duration is long (5 years), increasing the risk of cost escalation. Benchmarking is difficult without comparable sole-source contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

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

Taxpayer Impact: The lack of competition for a large contract like this means taxpayers may not be receiving the best possible price for these essential engineering services.

Public Impact

Ensures continued operational readiness of critical missile defense infrastructure. Supports advanced technological development in a sensitive national security sector. Potential for taxpayer funds to be used inefficiently due to sole-source award.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus contract type
Long contract duration
Lack of small business participation

Positive Signals

Supports critical national security mission
Long-term sustainment of vital systems

Sector Analysis

This contract falls within the Defense sector, specifically supporting missile defense systems. Spending in this area is typically high due to the complex and critical nature of the technology, but competitive bidding is crucial for cost efficiency.

Small Business Impact

The data indicates no small business participation in this contract. Given the large value and specialized nature of the work, opportunities for small businesses may be limited, or they were not actively sought.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure the contractor is performing efficiently and that costs are reasonable. The Department of Defense should have robust internal controls in place.

Related Government Programs

Guided Missile and Space Vehicle Manufacturing
Department of Defense Contracting
Missile Defense Agency Programs

Risk Flags

Sole-source award limits competition and price discovery.
Cost No Fee contract type shifts cost risk to the government.
Long contract duration increases potential for cost escalation.
No reported small business participation.
Potential for vendor lock-in and reduced future competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $91.4 million to RAYTHEON COMPANY. IIA - SUSTAINING ENGINEERING B&P FOR BUILD 8/9/EADL

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 $91.4 million.

What is the period of performance?

Start: 2021-04-01. End: 2026-09-30.

What is the justification for the sole-source award, and were alternative competitive strategies considered?

The justification for a sole-source award typically involves unique capabilities or urgent needs that cannot be met by multiple sources. Without further details, it's difficult to assess if alternative competitive strategies were thoroughly explored. A competitive process, even if more complex, could potentially yield better pricing and innovation for the government.

How will the government ensure cost control and value for money with a Cost No Fee contract over five years?

With a Cost No Fee contract, the government bears the risk of cost overruns. Ensuring value requires rigorous monitoring of contractor performance, detailed cost tracking, and potentially establishing performance metrics or milestones that, if not met, could trigger reviews or penalties, although the 'No Fee' aspect limits direct financial penalties.

What are the long-term implications for missile defense capabilities if this sole-source provider faces challenges?

A sole-source award creates a dependency on a single provider. If Raytheon Company faces significant operational, financial, or technical challenges, it could directly impact the sustainment and readiness of critical missile defense systems. This highlights the inherent risk in sole-source arrangements and the importance of contingency planning.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HQ027619R0001

Pricing Type: COST NO FEE (S)

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: $101,788,288

Exercised Options: $101,788,288

Current Obligation: $91,390,053

Actual Outlays: $41,614,449

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $76,925

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: HQ085121D0001

IDV Type: IDC

Timeline