DoD awards Raytheon $11.5M for missile propulsion, facing no competition

Contract Overview

Contract Amount: $11,515,379 ($11.5M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2006-08-08

End Date: 2011-06-16

Contract Duration: 1,773 days

Daily Burn Rate: $6.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $11.5 million to RAYTHEON COMPANY for work described as: Key points: 1. Significant contract value of $11.5 million awarded to a single large business. 2. Lack of competition raises concerns about potential overpricing and limited innovation. 3. Contract duration of nearly 5 years suggests a long-term need for these components. 4. The sector is critical for national defense, but procurement methods warrant scrutiny.

Value Assessment

Rating: questionable

Without competitive bidding, it's difficult to assess if the $11.5 million price is optimal. Benchmarking against similar propulsion unit contracts is challenging due to the lack of disclosed comparable pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and may result in higher costs for taxpayers compared to a competitive process.

Taxpayer Impact: The absence of competition could lead to inflated prices, directly impacting taxpayer funds allocated for defense.

Public Impact

Taxpayers may be paying more than necessary due to the lack of competitive bidding. The reliance on a single supplier for critical missile components could pose a supply chain risk. Defense readiness could be indirectly affected if procurement inefficiencies lead to resource misallocation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of price competition
Long contract duration without re-evaluation

Positive Signals

Award to established defense contractor
Addresses critical defense need

Sector Analysis

This contract falls within the defense manufacturing sector, specifically for guided missile and space vehicle propulsion. Spending in this area is typically high due to national security requirements, but competitive procurement is crucial for cost efficiency.

Small Business Impact

The contract was awarded to Raytheon Company, a large business. There is no indication that small businesses were involved as subcontractors or partners in this specific award, missing an opportunity for small business participation.

Oversight & Accountability

The sole-source nature of this award warrants closer oversight to ensure fair pricing and prevent potential waste. Accountability for the procurement decision and justification for the lack of competition is essential.

Related Government Programs

Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competition may lead to inflated costs.
Potential for reduced innovation due to single-source reliance.
Supply chain vulnerability if Raytheon faces production issues.
Limited transparency in pricing due to sole-source nature.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.5 million to RAYTHEON COMPANY. See the official description on USAspending.

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 $11.5 million.

What is the period of performance?

Start: 2006-08-08. End: 2011-06-16.

What was the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?

The justification for a sole-source award typically involves factors such as unique capabilities of the contractor, urgency of the requirement, or the unavailability of other sources. Without specific documentation, it's presumed the Department of Defense determined Raytheon possessed the sole capability to meet the stringent requirements for these specific missile propulsion units within the required timeframe.

How does the $11.5 million price compare to industry benchmarks for similar propulsion units, given the lack of competition?

Directly comparing the $11.5 million price to industry benchmarks is challenging without access to competitive bid data or publicly available cost breakdowns for similar sole-source contracts. The absence of competition inherently limits the ability to validate if this price represents fair market value or if it includes a premium due to the lack of alternative suppliers.

What measures are in place to ensure the effectiveness and quality of the delivered propulsion units under this sole-source contract?

Effectiveness and quality are typically ensured through rigorous contract oversight, performance metrics, and acceptance testing protocols mandated by the Department of Defense. The Defense Contract Management Agency (DCMA) would likely be responsible for monitoring Raytheon's performance, ensuring adherence to specifications, and verifying the quality of the delivered propulsion units.

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

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1151 E HERMANS RD, TUCSON, AZ, 85706

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline