DoD awards Raytheon $134.7M for AN/TPY-2 radar development, impacting missile defense capabilities
Contract Overview
Contract Amount: $134,737,795 ($134.7M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2019-10-30
End Date: 2026-05-31
Contract Duration: 2,405 days
Daily Burn Rate: $56.0K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Official Description: US AN/TPY-2 DEVELOPMENT FY20 REQUIREMENTS
Place of Performance
Location: WOBURN, MIDDLESEX County, MASSACHUSETTS, 01801
Plain-Language Summary
Department of Defense obligated $134.7 million to RAYTHEON COMPANY for work described as: US AN/TPY-2 DEVELOPMENT FY20 REQUIREMENTS Key points: 1. Significant investment in advanced missile defense technology. 2. Sole-source award to Raytheon, a key defense contractor. 3. Potential for cost overruns due to Cost Plus Award Fee contract type. 4. Impacts the Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing sector.
Value Assessment
Rating: fair
The Cost Plus Award Fee (CPAF) contract type allows for potential cost growth beyond initial estimates, making direct pricing comparisons difficult without detailed performance metrics. The award fee structure incentivizes performance but can lead to higher overall costs compared to fixed-price contracts.
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 limits price discovery and competition, potentially leading to higher costs for the government.
Taxpayer Impact: Taxpayer funds are directed to a single contractor without competitive bidding, which may result in a less favorable price than if multiple vendors had competed.
Public Impact
Enhances national missile defense capabilities. Supports advanced radar technology development. Contributes to the defense industrial base. Ensures continued operational readiness of critical defense systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition.
- CPAF contract type carries cost overrun risk.
- Long contract duration (2405 days) increases exposure to market changes.
Positive Signals
- Critical technology for national security.
- Award to established prime contractor.
- Potential for performance incentives.
Sector Analysis
This contract falls within the defense sector, specifically focusing on advanced radar systems crucial for missile defense. Spending benchmarks in this niche area are often characterized by high R&D costs and long development cycles, with limited competition due to specialized requirements.
Small Business Impact
The contract is awarded to Raytheon Company, a large prime contractor. There is no indication of subcontracting opportunities for small businesses in the provided data, suggesting limited direct impact on the small business sector for this specific award.
Oversight & Accountability
The Department of Defense, through the Missile Defense Agency, is responsible for oversight. The CPAF structure includes award fees tied to performance, implying some level of performance monitoring, but the sole-source nature warrants close scrutiny of cost and schedule adherence.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Missile Defense Agency Programs
Risk Flags
- Sole-source award.
- Cost Plus Award Fee contract type.
- Lack of detailed performance metrics in public data.
- Long contract duration.
- Potential for scope creep.
Tags
search-detection-navigation-guidance-aer, department-of-defense, ma, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $134.7 million to RAYTHEON COMPANY. US AN/TPY-2 DEVELOPMENT FY20 REQUIREMENTS
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 $134.7 million.
What is the period of performance?
Start: 2019-10-30. End: 2026-05-31.
What is the projected cost efficiency of this sole-source CPAF contract compared to potential competitive alternatives for similar radar development?
Without competitive bidding, it's challenging to definitively assess cost efficiency. CPAF contracts can incentivize performance but may inflate costs compared to fixed-price contracts. A thorough review of Raytheon's cost proposals and historical performance on similar programs would be needed to estimate potential savings from competition.
What are the specific performance metrics and award fee criteria that will be used to manage cost and ensure effective development of the AN/TPY-2 radar system?
The specific performance metrics and award fee criteria are not detailed in the provided data. Effective oversight would require the Missile Defense Agency to establish clear, measurable objectives related to technical performance, schedule adherence, and cost control, with transparent mechanisms for calculating award fees.
How does the development of the AN/TPY-2 radar system align with broader U.S. missile defense strategy and what is the long-term value proposition?
The AN/TPY-2 radar is a critical component of multiple U.S. missile defense systems, providing essential early warning and tracking capabilities. Its continued development ensures the U.S. maintains a technological edge in countering evolving threats, offering significant long-term value for national security by enhancing threat detection and response.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: HQ014717R0012
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: RTX Corp
Address: 225 PRESIDENTIAL WAY, WOBURN, MA, 01801
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: $144,683,715
Exercised Options: $137,549,544
Current Obligation: $134,737,795
Actual Outlays: $29,189,504
Subaward Activity
Number of Subawards: 4
Total Subaward Amount: $258,026
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HQ014718D0002
IDV Type: IDC
Timeline
Start Date: 2019-10-30
Current End Date: 2026-05-31
Potential End Date: 2026-05-31 00:00:00
Last Modified: 2025-11-24
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