DoD Awards Raytheon $28.5M for SM-3 Missile Obsolescence Mitigation

Contract Overview

Contract Amount: $28,550,159 ($28.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2021-04-07

End Date: 2026-04-30

Contract Duration: 1,849 days

Daily Burn Rate: $15.4K/day

Competition Type: NOT COMPETED

Pricing Type: COST NO FEE

Sector: Defense

Official Description: IB PRODUCT SUPPORT B&P FOR SM-3 OBSOLESCENCE MITIGATION/ENGINEERING

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $28.6 million to RAYTHEON COMPANY for work described as: IB PRODUCT SUPPORT B&P FOR SM-3 OBSOLESCENCE MITIGATION/ENGINEERING Key points: 1. Significant contract value for critical missile defense system. 2. Sole-source award to Raytheon raises competition concerns. 3. Long duration (5 years) suggests complex, ongoing needs. 4. Focus on obsolescence mitigation highlights system sustainment importance.

Value Assessment

Rating: questionable

The contract value of $28.5M over five years for product support and engineering is substantial. Without competitive benchmarks, it's difficult to assess if this pricing is optimal compared to similar sustainment contracts for advanced weapon systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating a lack of competition. This limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: The absence of competition may result in taxpayers paying a premium for these critical missile defense support services.

Public Impact

Ensures continued operational readiness of the SM-3 missile defense system. Addresses critical obsolescence issues to maintain system effectiveness. Supports advanced engineering and product support for a key national security asset.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Long contract duration

Positive Signals

Critical system support
Obsolescence mitigation
Experienced contractor

Sector Analysis

This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a specialized area of defense spending. Benchmarks for similar sole-source sustainment contracts are often difficult to obtain due to proprietary data and unique system requirements.

Small Business Impact

The contract was awarded to Raytheon Company, a large prime contractor. There is no indication of subcontracting opportunities for small businesses within the provided data.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure fair pricing and effective performance. The Missile Defense Agency should have robust internal controls to manage this contract.

Related Government Programs

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

Risk Flags

Sole-source award limits competition.
Potential for cost overruns due to lack of competitive pressure.
Long contract duration may reduce flexibility.
Reliance on a single contractor for critical system support.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.6 million to RAYTHEON COMPANY. IB PRODUCT SUPPORT B&P FOR SM-3 OBSOLESCENCE MITIGATION/ENGINEERING

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 $28.6 million.

What is the period of performance?

Start: 2021-04-07. End: 2026-04-30.

What is the justification for the sole-source award, and what steps are being taken to ensure fair and reasonable pricing?

The justification for a sole-source award typically stems from unique capabilities or proprietary technology held by a single contractor. For this contract, it's likely tied to Raytheon's specific knowledge and role in the SM-3 system's development and sustainment. To ensure fair pricing, the agency should conduct thorough cost analyses, review historical pricing, and potentially negotiate specific cost elements.

How will the long contract duration impact the government's ability to adapt to future technological advancements or alternative solutions?

A long contract duration, while providing stability for obsolescence mitigation, can limit flexibility. The government might be locked into specific solutions or technologies. To mitigate this, contract clauses allowing for review, modification, or termination for convenience, alongside active market surveillance for emerging technologies, are crucial.

What performance metrics are in place to measure the effectiveness of the obsolescence mitigation and engineering efforts?

Effective performance metrics are essential for this type of contract. They should include quantifiable measures such as the number of obsolescence issues resolved, the reduction in critical component lead times, successful integration of mitigated components, and adherence to engineering milestones. Regular technical reviews and progress reports are vital for oversight.

Industry Classification

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

Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE 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: $30,662,978

Exercised Options: $30,662,978

Current Obligation: $28,550,159

Actual Outlays: $9,391,019

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $1,605,381

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