DoD Awards Raytheon $82.6M for SM-3 Missile Self-Destruct Logic Replacement and Guidance Insertion
Contract Overview
Contract Amount: $8,263,297 ($8.3M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2025-07-17
End Date: 2029-07-17
Contract Duration: 1,461 days
Daily Burn Rate: $5.7K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: SM-3 IB SELF-DESTRUCT (SD) LOGIC REPLACEMENT AND INERTIAL MIDCOURSE GUIDANCE (IMG) INSERTION.
Place of Performance
Location: TUCSON, PIMA County, ARIZONA, 85756
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $8.3 million to RAYTHEON COMPANY for work described as: SM-3 IB SELF-DESTRUCT (SD) LOGIC REPLACEMENT AND INERTIAL MIDCOURSE GUIDANCE (IMG) INSERTION. Key points: 1. Contract focuses on critical missile defense system upgrades. 2. Sole-source award to Raytheon, a major defense contractor. 3. Potential for cost overruns due to Cost Plus Fixed Fee structure. 4. Long-term contract duration suggests significant program investment.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee contract type introduces risk for cost overruns. Benchmarking is difficult without specific cost breakdowns, but the total value for this specialized upgrade is substantial.
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 the government.
Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for these essential missile defense system upgrades.
Public Impact
Enhances the capabilities of the SM-3 missile, a key component of national missile defense. Ensures the continued operational effectiveness and safety of advanced missile systems. Supports the Missile Defense Agency's strategic objectives in a complex threat environment.
Waste & Efficiency Indicators
Waste Risk Score: 56 / 10
Warning Flags
- Sole-source award limits competition and price negotiation.
- Cost Plus Fixed Fee contract type can lead to cost overruns.
- Long contract duration increases exposure to potential cost increases.
Positive Signals
- Addresses critical upgrades to a vital defense system.
- Awarded to a known and experienced prime 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 upgrade contracts are difficult to ascertain due to the unique nature of missile systems.
Small Business Impact
The contract data indicates no specific set-aside for small businesses. Given the specialized nature of missile system development and the sole-source award to a large prime contractor, small business participation is likely minimal.
Oversight & Accountability
The Missile Defense Agency is responsible for overseeing this contract. The Cost Plus Fixed Fee structure necessitates robust oversight to manage costs and ensure performance standards are met.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Missile Defense Agency Programs
Risk Flags
- Sole-source award
- Cost Plus Fixed Fee contract type
- Potential for scope creep over the contract duration
- Reliance on a single contractor for critical system upgrades
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, az, delivery-order, 1m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $8.3 million to RAYTHEON COMPANY. SM-3 IB SELF-DESTRUCT (SD) LOGIC REPLACEMENT AND INERTIAL MIDCOURSE GUIDANCE (IMG) INSERTION.
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 $8.3 million.
What is the period of performance?
Start: 2025-07-17. End: 2029-07-17.
What is the specific technical justification for the sole-source award, and were alternative solutions considered?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent need where only one contractor can fulfill the requirement. The Missile Defense Agency would need to provide detailed documentation outlining the technical necessity and the process for evaluating alternatives to ensure fair value was sought despite the lack of open competition.
How will the agency mitigate cost overrun risks inherent in the Cost Plus Fixed Fee contract type for this long-duration project?
Mitigation strategies for CPFF contracts include stringent oversight, detailed cost tracking, performance incentives, and clear definition of work. The agency should implement robust Earned Value Management (EVM) systems and regular reviews to monitor expenditures against progress, ensuring Raytheon adheres to the fixed fee and manages costs effectively throughout the contract's duration.
What are the key performance indicators (KPIs) for this contract, and how will their achievement be measured to ensure effectiveness?
Key performance indicators would likely focus on the successful integration and testing of the new self-destruct logic and inertial midcourse guidance insertion. Measurement would involve rigorous testing protocols, validation against technical specifications, and demonstration of improved system reliability and safety. The agency must define clear, measurable, achievable, relevant, and time-bound (SMART) KPIs.
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
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: $8,263,297
Exercised Options: $8,263,297
Current Obligation: $8,263,297
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: 2025-07-17
Current End Date: 2029-07-17
Potential End Date: 2029-07-17 00:00:00
Last Modified: 2025-12-05
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