Raytheon Awarded $318M for Guided Missiles, Facing Limited Competition

Contract Overview

Contract Amount: $317,969,792 ($318.0M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2003-03-14

End Date: 2027-07-31

Contract Duration: 8,905 days

Daily Burn Rate: $35.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200307!000025!1700!AT718 !NAVAL AIR SYSTEMS COMMAND !N0001903C0001 !A!N! !N! !20030314!20050228!794598573!794598573!001339159!N!RAYTHEON COMPANY !1151 EAST HERMANS ROAD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA !ARIZONA !+000080860633!N!N!000080860633!1410!GUIDED MISSILES !A2 !MISSILE AND SPACE SYSTEMS !2CPO!AGM-154A !541330!E! !3! ! ! ! ! !99990909!B! ! !A! !D!U!J!1!001!N!1G!Z!W!F! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! !Y! ! !0001! !

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $318.0 million to RAYTHEON COMPANY for work described as: 200307!000025!1700!AT718 !NAVAL AIR SYSTEMS COMMAND !N0001903C0001 !A!N! !N! !20030314!20050228!794598573!794598573!001339159!N!RAYTHEON COMPANY !1151 EAST HERMANS ROAD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA !ARIZONA !+000080860633!N!N!000080860633!1410!GUIDED MISSILES !A2 !… Key points: 1. Significant contract value of $318 million for guided missile systems. 2. Limited competition suggests potential for higher pricing and reduced innovation. 3. High risk associated with defense procurement, requiring stringent oversight. 4. IT/Defense sector spending is substantial, with this contract falling under Engineering Services.

Value Assessment

Rating: questionable

The contract value of $317,969,791.93 is substantial. Without specific per-unit cost data or benchmarks for similar guided missile systems, it's difficult to definitively assess pricing fairness. However, limited competition often leads to less favorable pricing for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not competed, indicating a limited competition approach. This method can restrict price discovery and potentially lead to higher costs for the government compared to a full and open competition.

Taxpayer Impact: The lack of robust competition may result in taxpayers paying more than necessary for these guided missile systems.

Public Impact

Taxpayers may be overpaying due to limited competition in this defense contract. The Department of Defense is procuring critical guided missile technology. This contract supports Raytheon Company, a major defense contractor. The long duration of the contract (over 15 years) raises questions about flexibility and potential cost overruns.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition
Potential for cost overruns due to long duration
Lack of transparency in pricing due to non-competitive award

Positive Signals

Award to a known defense contractor
Contract supports critical defense capabilities

Sector Analysis

This contract falls within the Defense sector, specifically for Engineering Services related to Guided Missiles. Defense spending is a significant portion of federal expenditure, and contracts of this nature are common but require careful scrutiny.

Small Business Impact

There is no indication in the provided data that small businesses were involved in this contract, either as prime contractors or subcontractors. Further investigation would be needed to determine any small business participation.

Oversight & Accountability

The limited competition and significant value of this contract necessitate robust oversight from the Department of Defense and relevant oversight bodies to ensure cost-effectiveness and accountability.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Limited competition may lead to inflated prices.
Long contract duration increases risk of cost overruns and obsolescence.
Lack of transparency in the procurement process.
Potential for contractor lock-in.
Need for strong government oversight to ensure value for money.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $318.0 million to RAYTHEON COMPANY. 200307!000025!1700!AT718 !NAVAL AIR SYSTEMS COMMAND !N0001903C0001 !A!N! !N! !20030314!20050228!794598573!794598573!001339159!N!RAYTHEON COMPANY !1151 EAST HERMANS ROAD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA !ARIZONA !+000080860633!N!N!000080860633!1410!GUIDED MISSILES !A2 !MISSILE AND SPACE SYSTEMS !2CPO!AGM-154A !541330!E! !3! ! ! ! ! !99990909!B! ! !A! !D!U!J!1!001!N!1G!Z!W!F! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! !Y! ! !0001! !

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $318.0 million.

What is the period of performance?

Start: 2003-03-14. End: 2027-07-31.

What is the justification for awarding this contract with limited competition?

The justification for limited competition is not provided in the data. Typically, such awards are made when only one or a limited number of sources can fulfill the requirement due to unique capabilities, urgency, or specific technical needs. A thorough review of the justification is crucial to ensure it is valid and that the government did not forgo potential cost savings.

How does the per-unit cost compare to similar guided missile systems procured competitively?

Without access to specific per-unit cost data for this contract and comparative data from competitively procured, similar guided missile systems, it is impossible to make a direct comparison. The 'limited competition' designation suggests that such a comparison might reveal a price disadvantage for the government.

What mechanisms are in place to ensure the effectiveness and timely delivery of these guided missiles?

The contract is with Raytheon Company, a known defense contractor, suggesting a level of established capability. However, the long duration and significant value necessitate strong program management, performance metrics, and quality assurance processes to ensure effectiveness and timely delivery, especially given the potential risks in defense procurement.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 1151 EAST HERMANS ROAD, TUCSON, AZ, 85706

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $578,501,727

Exercised Options: $10,220,406

Current Obligation: $317,969,792

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NOT OBTAINED - WAIVED

Timeline