Raytheon awarded $24M for 80 MRIC missiles and support equipment, a sole-source acquisition

Contract Overview

Contract Amount: $23,990,936 ($24.0M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2024-08-29

End Date: 2026-04-28

Contract Duration: 607 days

Daily Burn Rate: $39.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: THIS CONTRACT IS FOR 80 MRIC MISSILES, LOADING AND LIFTING EQUIPMENT, LEAK TESTERS, SPARES, AND LEAK TESTER TRAINING.

Plain-Language Summary

Department of Defense obligated $24.0 million to RAYTHEON COMPANY for work described as: THIS CONTRACT IS FOR 80 MRIC MISSILES, LOADING AND LIFTING EQUIPMENT, LEAK TESTERS, SPARES, AND LEAK TESTER TRAINING. Key points: 1. The contract focuses on specialized missile systems and associated equipment, indicating a need for advanced defense capabilities. 2. Sole-source procurement suggests limited market availability or unique contractor expertise for these specific missile components. 3. The acquisition includes loading/lifting equipment, spares, and training, pointing to a comprehensive support package. 4. A firm-fixed-price contract structure aims to control costs and provide predictability for the government. 5. The duration of 607 days suggests a moderate-term project for delivery and initial support. 6. The absence of small business set-asides indicates this contract is not specifically targeted for small business participation.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its specialized nature and sole-source award. Without competitive bids, it's difficult to definitively assess if the $24 million price represents optimal value for money. The inclusion of loading/lifting equipment, spares, and training alongside the missiles suggests a bundled approach, which can sometimes offer efficiencies but also warrants scrutiny to ensure each component is priced competitively. Further analysis would require comparing unit costs of similar missile systems or support packages if available in the market.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Raytheon Company, was solicited. This typically occurs when a specific product or service is available only from a single source, or in cases of urgent need where competition is not feasible. The lack of competition limits price discovery and may result in higher costs compared to a fully competed procurement. The justification for sole-source awards should be carefully reviewed to ensure it aligns with federal acquisition regulations.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive bidding. Without multiple offers, there is less pressure on the contractor to offer the lowest possible price.

Public Impact

The Department of the Navy benefits from acquiring critical missile systems and associated support infrastructure. This contract ensures the availability of 80 MRIC missiles, vital for national defense operations. The acquisition supports the readiness and operational capabilities of naval forces. The contract includes training, enhancing the proficiency of personnel operating and maintaining the equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially leading to higher costs for taxpayers.
Lack of transparency in the sole-source justification requires careful review to ensure necessity.
Dependence on a single contractor for critical missile systems could pose long-term supply chain risks.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Comprehensive package including equipment, spares, and training ensures immediate operational readiness.
Award to a known defense contractor suggests established expertise in missile systems.

Sector Analysis

The defense sector, particularly guided missile manufacturing, is characterized by high barriers to entry, significant R&D investment, and a limited number of specialized contractors. This contract falls within the 'Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing' industry code (NAICS 336415). Spending in this area is driven by national security requirements and technological advancements. Comparable spending benchmarks are difficult to establish without detailed specifications of the MRIC missile system and its components, but defense procurement often involves substantial investments in advanced weaponry.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The prime contractor, Raytheon Company, is a large aerospace and defense firm. The absence of small business participation goals means that opportunities for small businesses to engage in this specific procurement are likely limited, unless they are part of Raytheon's broader supply chain.

Oversight & Accountability

Oversight for this contract will primarily fall under the Department of the Navy's contracting and program management offices. As a definitive contract, it is subject to standard federal procurement regulations and oversight mechanisms. The firm-fixed-price nature provides some cost control, but performance monitoring will be crucial to ensure timely delivery and quality of the missiles and equipment. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Missile Systems Procurement
Defense Equipment Acquisition
Naval Aviation Support
Weapon Systems Development

Risk Flags

Sole-source award
Lack of competition
Potential for higher costs
Limited transparency in justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.0 million to RAYTHEON COMPANY. THIS CONTRACT IS FOR 80 MRIC MISSILES, LOADING AND LIFTING EQUIPMENT, LEAK TESTERS, SPARES, AND LEAK TESTER TRAINING.

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $24.0 million.

What is the period of performance?

Start: 2024-08-29. End: 2026-04-28.

What is the specific type and capability of the MRIC missile system being procured?

The provided data indicates the contract is for '80 MRIC MISSILES, LOADING AND LIFTING EQUIPMENT, LEAK TESTERS, SPARES, AND LEAK TESTER TRAINING.' The acronym 'MRIC' is not universally defined in public defense literature, suggesting it may be a specific program designation or a proprietary name. Without further classification or unclassified program details, the exact capabilities, range, payload, guidance systems, and intended targets of the MRIC missile system remain unspecified in the provided data. Typically, missile systems vary widely in their intended roles, from air-to-air or air-to-ground attack to anti-ship or defensive interception. The inclusion of specialized loading and lifting equipment, leak testers, and spares suggests a focus on the physical handling, maintenance, and operational readiness of these missiles, implying they may be complex or require specific environmental controls.

What is the historical spending pattern for MRIC missiles or similar systems by the Department of the Navy?

The provided data does not contain historical spending information for MRIC missiles or directly comparable systems. This contract represents a new award of $24 million for 80 units and associated support. To assess historical spending patterns, one would need to access contract databases (like FPDS or SAM.gov) and search for previous awards to Raytheon Company or other contractors for 'MRIC missiles' or systems with similar specifications and functions. Without this historical context, it is difficult to determine if this $24 million award is an increase, decrease, or consistent with prior investments in similar capabilities. Analyzing past contract values, quantities, and competition levels for related procurements would provide crucial insights into the Navy's long-term strategy and budget allocation for such assets.

What is the justification for the sole-source award to Raytheon Company for this contract?

The data explicitly states the contract was 'NOT COMPETED' and awarded as a 'SOLE SOURCE.' Federal Acquisition Regulation (FAR) Part 6 outlines the policies and procedures for competitive contracting, including specific justifications for other than full and open competition (e.g., FAR 6.302). Common justifications for sole-source awards include unique capabilities, proprietary technology, urgent and compelling needs, or when only one responsible source can provide the supplies or services. For this specific contract, the justification would likely stem from Raytheon possessing the sole rights to manufacture the MRIC missile system, or perhaps unique expertise in its production or integration that cannot be replicated by other potential bidders within the required timeframe. A formal Justification for Other Than Full and Open Competition (JOFOC) document would typically be required and publicly available (often redacted) for such awards.

How does the unit cost of the MRIC missiles compare to other similar missile systems procured by the DoD?

The provided data states the contract is for 80 MRIC missiles and associated equipment for a total of $24,009,361.11. This yields a rough unit cost of approximately $300,117 per missile, excluding the cost of loading/lifting equipment, leak testers, spares, and training. Direct comparison to other missile systems is challenging without knowing the specific class, range, guidance, and warhead of the MRIC missile. For instance, a short-range air-to-air missile would have a vastly different unit cost than a long-range strategic missile. However, $300,000 per unit is within the range of many tactical missiles. To provide a more accurate benchmark, one would need to identify comparable systems (e.g., specific variants of Sidewinder, AMRAAM, Hellfire, or Javelin missiles) and their recent procurement costs, factoring in any differences in quantity and support packages.

What are the potential risks associated with a sole-source acquisition of critical defense equipment?

Sole-source acquisitions, while sometimes necessary, carry inherent risks. The primary risk is reduced price competition, which can lead to the government paying a premium compared to a fully competed contract. This lack of competition can also stifle innovation and efficiency, as the contractor faces less pressure to improve their product or processes. Furthermore, sole-sourcing can create vendor lock-in, making it difficult and costly to switch suppliers in the future, potentially impacting long-term sustainment and upgrade strategies. There's also a risk of complacency or reduced oversight effectiveness when dealing with a single supplier. For critical defense equipment like missiles, reliance on a single source can also pose supply chain vulnerabilities if the contractor experiences production issues, financial instability, or geopolitical disruptions.

Industry Classification

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

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: M6785424R0004

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

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: $24,244,936

Exercised Options: $23,990,936

Current Obligation: $23,990,936

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline