DoD awards $133M for AIM-9X missiles to Raytheon, facing limited competition and potential cost concerns
Contract Overview
Contract Amount: $133,381,211 ($133.4M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2008-01-11
End Date: 2021-05-31
Contract Duration: 4,889 days
Daily Burn Rate: $27.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: TACTICAL MISSILE, AIM-9X (KOREA)
Place of Performance
Location: TUCSON, PIMA County, ARIZONA, 85756
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $133.4 million to RAYTHEON COMPANY for work described as: TACTICAL MISSILE, AIM-9X (KOREA) Key points: 1. Significant contract value for advanced missile systems. 2. Sole-source award raises questions about price discovery and competition. 3. Long contract duration may impact cost-effectiveness over time. 4. Focus on defense sector spending with potential for future procurements.
Value Assessment
Rating: questionable
The total award value is substantial. Without competitive bidding, it's difficult to assess if the pricing is optimal compared to potential alternatives or previous contracts for similar systems.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award. This limits price discovery and may lead to higher costs for taxpayers as there is no market pressure to reduce prices.
Taxpayer Impact: The lack of competition on this large contract likely results in a higher cost to taxpayers than if it had been competitively bid.
Public Impact
Ensures continued availability of critical defense assets for national security. Supports advanced missile technology development and production. Potential for job creation within the defense manufacturing sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Long contract duration
- Firm Fixed Price contract with potential for cost overruns if not managed tightly
Positive Signals
- Procurement of essential defense equipment
- Long-term supply chain stability for a critical weapon system
Sector Analysis
This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a key area of defense spending. Benchmarks for similar sole-source missile contracts would be needed for a more precise comparison.
Small Business Impact
The data does not indicate any specific provisions or awards made to small businesses under this contract. Further analysis would be needed to determine small business participation.
Oversight & Accountability
The Department of Defense, through the Defense Contract Management Agency, is responsible for oversight. The long duration and sole-source nature necessitate robust oversight to ensure performance and cost control.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source procurement limits competitive pricing.
- Long contract duration increases risk of cost escalation and obsolescence.
- Lack of transparency in price justification.
- Potential for contractor lock-in.
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, az, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $133.4 million to RAYTHEON COMPANY. TACTICAL MISSILE, AIM-9X (KOREA)
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 $133.4 million.
What is the period of performance?
Start: 2008-01-11. End: 2021-05-31.
What is the historical cost trend for the AIM-9X missile under previous contracts, and how does this award compare?
Historical cost data for the AIM-9X missile is crucial for evaluating the value of this $133 million award. Without access to previous contract pricing, especially if they were also sole-source, it's challenging to determine if this represents a fair price or an escalation. A comparative analysis against similar missile systems procured competitively would also provide valuable context for assessing cost-effectiveness.
What are the specific justifications for the sole-source award, and have alternative sources been thoroughly explored?
Sole-source awards typically require strong justification, such as unique technical capabilities, proprietary technology, or urgent need where only one source can fulfill the requirement. The Department of Defense must have documented these reasons. Thorough exploration of alternative sources, even if ultimately deemed unsuitable, is a key aspect of responsible procurement to ensure taxpayers receive the best value.
How will the long contract duration (4889 days) impact the technological relevance and potential obsolescence of the AIM-9X missile?
A contract duration of nearly 13.5 years presents a significant risk of technological obsolescence for a weapon system like the AIM-9X. While the contract may include provisions for upgrades, the pace of technological advancement in missile systems could outstrip the contract's ability to incorporate the latest innovations cost-effectively. This necessitates careful monitoring and potential contract modifications to ensure the missile remains relevant.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing
Product/Service Code: GUIDED MISSLES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0001907R0067
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
Financial Breakdown
Contract Ceiling: $133,384,603
Exercised Options: $133,384,603
Current Obligation: $133,381,211
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2008-01-11
Current End Date: 2021-05-31
Potential End Date: 2021-05-31 00:00:00
Last Modified: 2021-01-11
More Contracts from Raytheon Company
- Federal Contract — $5.7B (Department of Defense)
- TEN Fire Units for Qatar — $5.6B (Department of Defense)
- GPS Advanced Control Segment (OCX) Phase B Blocks 1 and 2 — $4.5B (Department of Defense)
- An/Spy-6(v) Hardware Production — $3.3B (Department of Defense)
- Predominant - Patriot UAE — $3.0B (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)