Raytheon Company awarded $15.6M for Stinger Universal Electronics Redesign, a sole-source contract

Contract Overview

Contract Amount: $15,632,062 ($15.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2025-09-29

End Date: 2028-02-29

Contract Duration: 883 days

Daily Burn Rate: $17.7K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: AIR-TO-AIR LAUNCHER REDESIGNED STINGER UNIVERSAL ELECTRONICS QUALIFICATION

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $15.6 million to RAYTHEON COMPANY for work described as: AIR-TO-AIR LAUNCHER REDESIGNED STINGER UNIVERSAL ELECTRONICS QUALIFICATION Key points: 1. Contract awarded on a sole-source basis, limiting competitive pricing benefits. 2. Significant investment in redesigning critical Stinger missile electronics. 3. Long contract duration of nearly 3 years suggests complex development. 4. No small business set-aside, potentially limiting broader economic participation. 5. Contract type is Cost Plus Fixed Fee, which can lead to cost overruns. 6. Awarded by the Department of the Navy, indicating defense sector focus.

Value Assessment

Rating: questionable

The contract's value of $15.6 million for redesigning electronics is difficult to benchmark without specific technical details. As a sole-source award, there's no direct comparison to competitive bids to assess value for money. The Cost Plus Fixed Fee (CPFF) structure, while allowing flexibility for complex R&D, carries inherent risks of cost escalation compared to fixed-price contracts. Further analysis would require understanding the scope of the redesign and the fixed fee percentage.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor, Raytheon Company, was solicited. This approach is typically used when a unique capability or proprietary technology is required, or in cases of urgent need where competition is not feasible. The lack of competition means there was no opportunity for price discovery through bidding, potentially leading to higher costs for the government.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive pressure to drive down prices. The government relies on negotiation and oversight to ensure a fair price in sole-source situations.

Public Impact

The primary beneficiaries are the Department of Defense and specifically the Department of the Navy, ensuring the modernization of critical missile systems. The contract delivers redesigned universal electronics for the Stinger missile, aiming to improve performance, reliability, or maintainability. Geographic impact is primarily within the defense supply chain and Raytheon's operational facilities, with potential downstream effects on military readiness. Workforce implications include specialized engineering and manufacturing roles at Raytheon, contributing to the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential cost savings for taxpayers.
Cost Plus Fixed Fee contract type introduces risk of cost overruns.
Lack of small business participation may limit broader economic impact.
Contract duration of nearly 3 years requires sustained oversight.

Positive Signals

Addresses critical modernization needs for a key defense asset (Stinger missile).
Awarded to a known defense contractor with established expertise.
Contract aims to improve the performance or reliability of essential electronics.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on missile systems and their electronic components. The market for such specialized defense electronics is often dominated by a few large, established contractors due to high barriers to entry, including R&D costs, security clearances, and specialized manufacturing capabilities. Comparable spending benchmarks would likely involve other complex electronics redesign or upgrade contracts for military platforms.

Small Business Impact

This contract does not appear to include a small business set-aside, nor is there an indication of significant subcontracting opportunities for small businesses in the provided data. The award to a large prime contractor like Raytheon suggests that the primary focus is on leveraging established capabilities. This could limit the direct economic benefits to the small business ecosystem in this specific instance.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures would be tied to the Cost Plus Fixed Fee structure, requiring detailed cost reporting and justification from the contractor. Transparency may be limited due to the sole-source nature and the sensitive defense-related aspects of the work.

Related Government Programs

Stinger Missile Production
Air Defense Systems
Defense Electronics Manufacturing
Naval Aviation Support Equipment

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.6 million to RAYTHEON COMPANY. AIR-TO-AIR LAUNCHER REDESIGNED STINGER UNIVERSAL ELECTRONICS QUALIFICATION

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 $15.6 million.

What is the period of performance?

Start: 2025-09-29. End: 2028-02-29.

What is the specific technical scope of the 'redesign' for the Stinger Universal Electronics, and what are the expected performance improvements?

The provided data does not detail the specific technical scope of the redesign. However, 'redesign' typically implies modifications to existing electronic components or systems to enhance functionality, improve reliability, reduce obsolescence, or adapt to new requirements. Expected improvements could include enhanced processing power, better signal-to-noise ratio, increased resistance to electronic warfare, or compatibility with newer missile guidance systems. Without further documentation, the precise nature and expected benefits remain unspecified, necessitating a review of the contract's SOW (Statement of Work) or technical exhibits.

What justification was provided for awarding this contract on a sole-source basis instead of through full and open competition?

Sole-source awards are typically justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required supplies or services, or when there is a compelling urgency. For a critical defense system like the Stinger missile, the justification likely centers on Raytheon's unique proprietary knowledge of the existing system's electronics, the need for specialized tooling or expertise held exclusively by Raytheon, or potentially urgent operational requirements where initiating a competitive process would cause unacceptable delays. The specific justification would be documented in the Justification and Approval (J&A) for Other Than Full and Open Competition (OTFOC).

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other contract types in terms of risk and potential cost efficiency for this type of R&D project?

The Cost Plus Fixed Fee (CPFF) contract type is often used for research and development (R&D) or complex services where the scope is not fully defined at the outset, or where innovation is a key objective. It allows the contractor to incur costs deemed reasonable and allocable, plus a predetermined fixed fee representing profit. Compared to fixed-price contracts, CPFF shifts more cost risk to the government, as the final price is not capped. However, it offers flexibility and can incentivize contractor effort when requirements are uncertain. For R&D, it can be more efficient than fixed-price if it encourages exploration and adaptation without the contractor being overly constrained by a rigid price ceiling, but it requires robust government oversight to manage costs effectively.

What is Raytheon Company's track record with Stinger missile programs and similar defense electronics contracts?

Raytheon Company (now RTX) has a long and established history as a prime contractor for the Stinger missile system, including its production and various upgrades over decades. They are a major defense contractor with extensive experience in developing, manufacturing, and sustaining complex electronic systems for military applications across various platforms. Their track record includes numerous contracts with the Department of Defense and allied nations for air defense systems and related technologies. While specific performance metrics for past Stinger contracts are not detailed here, Raytheon's position as a leading defense prime suggests a generally strong capability in this domain.

What are the potential implications of this contract's duration (883 days) on program management and budget planning?

A contract duration of 883 days (approximately 2.4 years) for an electronics redesign project indicates a substantial undertaking requiring sustained effort and resources. From a program management perspective, it necessitates long-term planning for personnel, facilities, and oversight. For budget planning, it means that the $15.6 million allocated will be expended over this extended period, requiring phased funding and potentially annual budget requests. This duration also implies that the redesign is not a minor modification but a significant engineering effort, potentially involving multiple development and testing phases. Effective management is crucial to ensure milestones are met and costs remain controlled throughout the project lifecycle.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms, Ordnance, and Ordnance Accessories Manufacturing

Product/Service Code: WEAPONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: M6785421R0005

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: $15,632,062

Exercised Options: $15,632,062

Current Obligation: $15,632,062

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $42,724

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: M6785421D0073

IDV Type: IDC

Timeline