DoD Awards Raytheon $3.48M for Guided Missile Manufacturing, Lacking Competition

Contract Overview

Contract Amount: $3,476,754 ($3.5M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2025-03-01

End Date: 2026-12-31

Contract Duration: 670 days

Daily Burn Rate: $5.2K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IIA - TBE (PS)

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35805

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $3.5 million to RAYTHEON COMPANY for work described as: IIA - TBE (PS) Key points: 1. Significant contract value for specialized manufacturing. 2. Sole-source award raises concerns about price discovery. 3. Missile defense sector is critical but often faces limited competition. 4. Potential for cost overruns with Cost Plus Fixed Fee contract type.

Value Assessment

Rating: questionable

The contract value of $3.48M for guided missile manufacturing is difficult to benchmark without specific details on the scope of work. However, the Cost Plus Fixed Fee structure can lead to higher final costs compared to fixed-price contracts, especially if not tightly managed.

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 lack of competition limits the government's ability to secure the best possible price and may result in a higher cost than if multiple vendors had bid.

Taxpayer Impact: The absence of competition for this $3.48M contract means taxpayers may not be receiving the most cost-effective solution, potentially leading to inflated prices for defense systems.

Public Impact

Impacts national security through the procurement of missile defense technology. Potential for increased defense spending due to non-competitive award. Highlights reliance on specific contractors for advanced defense systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of small business participation noted

Positive Signals

Supports critical defense capabilities
Long-term contract duration

Sector Analysis

This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a critical component of national defense. Spending in this area is often characterized by high R&D costs and limited contractor pools, leading to a higher propensity for sole-source or limited competition awards.

Small Business Impact

The data indicates no specific set-aside for small businesses (sb: false). This suggests that the prime contractor, Raytheon, will likely perform the majority of the work, with limited direct opportunities for small businesses unless subcontracted.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure costs are reasonable and the scope of work is strictly adhered to. The Department of Defense should actively monitor expenditures and performance metrics throughout the contract lifecycle.

Related Government Programs

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

Risk Flags

Sole-source award limits price competition.
Cost Plus Fixed Fee contract increases risk of cost overruns.
No small business set-aside noted.
Potential for contractor lock-in due to specialized nature of work.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $3.5 million to RAYTHEON COMPANY. IIA - TBE (PS)

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 $3.5 million.

What is the period of performance?

Start: 2025-03-01. End: 2026-12-31.

What specific guided missile or space vehicle components are being manufactured under this contract, and how does the $3.48M value compare to similar procurements for comparable items?

Without detailed specifications of the guided missile or space vehicle components, a precise value comparison is challenging. However, $3.48M for manufacturing specialized defense hardware is a moderate sum. Benchmarking would require access to classified or detailed procurement data for similar systems, considering factors like complexity, quantity, and technological sophistication.

Given the sole-source nature, what mechanisms are in place to mitigate the risk of cost overruns and ensure Raytheon is delivering the best value to the government?

The Cost Plus Fixed Fee (CPFF) contract type inherently carries a risk of cost overruns. Mitigation strategies likely include stringent government oversight of Raytheon's incurred costs, detailed performance metrics, and potentially negotiation of target costs and fee adjustments. Regular audits and reviews by the Defense Contract Audit Agency (DCAA) are crucial.

How effective is the Department of Defense in fostering competition within the guided missile and space vehicle manufacturing sector to ensure optimal use of taxpayer funds?

The effectiveness varies significantly by sub-sector. While some areas may see robust competition, critical or highly specialized niches, like advanced missile defense, often have fewer qualified contractors. The DoD employs various strategies, including market research and encouraging new entrants, but the inherent complexity and high barriers to entry in this sector can limit competitive opportunities.

Industry Classification

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

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

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: $7,700,602

Exercised Options: $5,381,035

Current Obligation: $3,476,754

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $975,000

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