DoD Awards Raytheon $15.7M for Missile Defense Systems Amid Obsolescence Concerns

Contract Overview

Contract Amount: $15,731,310 ($15.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2022-06-30

End Date: 2026-07-31

Contract Duration: 1,492 days

Daily Burn Rate: $10.5K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IIA OBSOLESCENCE - CSIC

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $15.7 million to RAYTHEON COMPANY for work described as: IIA OBSOLESCENCE - CSIC Key points: 1. Significant contract value for critical defense systems. 2. Sole-source award to Raytheon Company raises competition questions. 3. Potential obsolescence risk highlights need for modernization. 4. Missile Defense Agency is a key player in advanced weaponry.

Value Assessment

Rating: fair

The contract type is Cost Plus Fixed Fee, which can lead to higher costs if not managed carefully. Benchmarking against similar missile system contracts is difficult without more detailed cost breakdowns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Raytheon. This limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for these critical missile defense components.

Public Impact

Ensures continued operation of vital missile defense capabilities. Addresses potential obsolescence issues in existing systems. Supports advanced technology development within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition.
Obsolescence risk requires proactive management.
Cost-plus contract type can inflate costs.

Positive Signals

Addresses critical defense need.
Supports advanced missile technology.

Sector Analysis

This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a high-value and technologically intensive area of defense spending. Benchmarks are difficult due to proprietary technology and specialized nature.

Small Business Impact

This award does not appear to involve small businesses directly, as it is a sole-source contract with a large prime contractor, Raytheon Company.

Oversight & Accountability

The Department of Defense and the Missile Defense Agency are responsible for oversight. The lack of competition warrants close monitoring of cost and performance to ensure value.

Related Government Programs

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

Risk Flags

Sole-source award
Obsolescence risk
Cost Plus Fixed Fee contract type
Lack of transparency in pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.7 million to RAYTHEON COMPANY. IIA OBSOLESCENCE - CSIC

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 $15.7 million.

What is the period of performance?

Start: 2022-06-30. End: 2026-07-31.

What specific obsolescence issues are being addressed, and what is the long-term strategy for system modernization?

The contract aims to mitigate current obsolescence by procuring necessary components and potentially updating systems. A comprehensive long-term strategy for modernization is crucial to avoid recurring obsolescence issues and ensure the effectiveness of the missile defense shield against evolving threats.

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

The justification for a sole-source award typically relates to unique capabilities or urgent needs. To ensure fair pricing, the agency should conduct thorough cost analyses, benchmark against similar sole-source procurements, and negotiate aggressively on profit margins and indirect cost rates.

How does this investment align with broader national security objectives and the evolving threat landscape?

This investment directly supports national security by maintaining and upgrading critical missile defense capabilities. It addresses the evolving threat landscape by ensuring that existing systems remain operational and effective against current and emerging ballistic missile threats, contributing to strategic deterrence.

Industry Classification

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

Product/Service Code: QUALITY CONTROL, TEST, INSPECTION › OTHER QUALITY, TEST, INSPECT SVCS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HQ027619R0001

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: $15,731,310

Exercised Options: $15,731,310

Current Obligation: $15,731,310

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