DoD Awards Raytheon $17.6M for FMS MK698 Upgrade, Missile Defense Agency Contract Lacks Competition
Contract Overview
Contract Amount: $17,566,839 ($17.6M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2025-03-14
End Date: 2028-12-31
Contract Duration: 1,388 days
Daily Burn Rate: $12.7K/day
Competition Type: NOT COMPETED
Pricing Type: COST NO FEE
Sector: Defense
Official Description: FMS MK698 UPGRADE B&P JA-P-CVP LINE 003
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35805
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $17.6 million to RAYTHEON COMPANY for work described as: FMS MK698 UPGRADE B&P JA-P-CVP LINE 003 Key points: 1. Significant contract value for a missile defense system upgrade. 2. Sole-source award raises concerns about price discovery and potential overspending. 3. Missile defense sector is critical but often faces high R&D and production costs. 4. Lack of competition limits opportunities for small businesses in this specialized area.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee (CPFF) structure, combined with a lack of competition, makes it difficult to assess value. Without competitive bids, it's hard to benchmark pricing against similar upgrades or market rates.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded sole-source, meaning no other vendors were considered. This significantly limits price discovery and may lead to higher costs for taxpayers as there is no competitive pressure to reduce the price.
Taxpayer Impact: The sole-source nature of this award means taxpayers may not be receiving the best possible price for this critical missile defense upgrade.
Public Impact
Taxpayers may be overpaying due to the absence of competitive bidding. The upgrade is crucial for national security, impacting defense capabilities. Limited visibility into the cost breakdown for the FMS MK698 upgrade. Potential for cost overruns given the contract type and sole-source award.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost-plus contract type
- Lack of small business participation
Positive Signals
- Critical national security system
- Long-term upgrade plan (2028 completion)
Sector Analysis
This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a highly specialized and capital-intensive industry. Spending in this area is driven by national security needs and technological advancements, often involving significant R&D investments.
Small Business Impact
The contract was not awarded to a small business, and the sole-source nature of the award provides no direct opportunity for small businesses to participate in this specific contract. Subcontracting opportunities are not detailed.
Oversight & Accountability
The sole-source award warrants close oversight to ensure costs are reasonable and the scope of work aligns with the stated objectives. Transparency in reporting expenditures will be crucial for accountability.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Missile Defense Agency Programs
Risk Flags
- Lack of competition
- Cost-plus contract type
- Potential for cost overruns
- Limited small business participation
- Lack of transparency in pricing justification
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, al, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $17.6 million to RAYTHEON COMPANY. FMS MK698 UPGRADE B&P JA-P-CVP LINE 003
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 $17.6 million.
What is the period of performance?
Start: 2025-03-14. End: 2028-12-31.
What is the justification for awarding this contract sole-source, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award typically involves unique capabilities or proprietary technology. However, without detailed documentation, it's difficult to ascertain the specific reasons. Agencies should provide robust justification and conduct thorough price analyses, potentially using historical data or independent cost estimates, to ensure fair pricing even in sole-source situations.
What are the potential risks associated with a cost-plus contract for a missile defense upgrade, especially when awarded sole-source?
Cost-plus contracts can incentivize contractors to increase costs, as their profit is often a percentage of the total expenses. When awarded sole-source, the lack of competition removes a key check on these costs. This combination increases the risk of budget overruns and taxpayers paying more than necessary for the upgrade.
How will the effectiveness of the FMS MK698 upgrade be measured, and what metrics will be used to assess its impact on missile defense capabilities?
Effectiveness will likely be measured through rigorous testing and evaluation protocols defined in the contract's statement of work. Key metrics could include improved intercept rates, enhanced tracking accuracy, expanded engagement envelopes, and successful integration with existing defense systems. Performance reviews and operational deployment feedback will be crucial for assessing overall impact.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing
Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT
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: $17,566,839
Exercised Options: $17,566,839
Current Obligation: $17,566,839
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
Start Date: 2025-03-14
Current End Date: 2028-12-31
Potential End Date: 2028-12-31 00:00:00
Last Modified: 2026-01-05
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