DoD awards Raytheon $717.8M for Tomahawk Block IV missiles, raising concerns about competition and taxpayer value

Contract Overview

Contract Amount: $717,768,565 ($717.8M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2009-03-31

End Date: 2028-07-31

Contract Duration: 7,062 days

Daily Burn Rate: $101.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: TOMAHAWK BLOCK IV MISSILE PROCUREMENT FOR FY09

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $717.8 million to RAYTHEON COMPANY for work described as: TOMAHAWK BLOCK IV MISSILE PROCUREMENT FOR FY09 Key points: 1. Significant contract value for advanced missile systems. 2. Sole-source award to Raytheon Company limits competitive pricing. 3. Long contract duration (2009-2028) may impact cost-effectiveness. 4. High R&D investment in guided missile technology.

Value Assessment

Rating: questionable

The firm-fixed-price contract aims to control costs, but the lack of competition makes it difficult to benchmark against similar procurements. The total award value is substantial, and ongoing costs over the contract's long duration require careful monitoring.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Raytheon Company. This lack of competition limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive environment.

Taxpayer Impact: The absence of competition for this significant missile procurement raises concerns about whether taxpayers are receiving the best possible value for their investment.

Public Impact

Procurement of advanced weaponry impacting national defense capabilities. Potential for long-term reliance on a single supplier for critical defense assets. Significant taxpayer investment in military hardware modernization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Long contract duration
Sole-source award

Positive Signals

Firm-fixed-price contract type
Advanced missile technology

Sector Analysis

This contract falls within the Defense sector, specifically guided missile manufacturing. Spending benchmarks in this area are often high due to complex technology and R&D, but competition is crucial for cost control.

Small Business Impact

The data does not indicate any specific subcontracting goals or participation from small businesses in this contract. Further analysis would be needed to determine the extent of small business involvement.

Oversight & Accountability

The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. 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 award limits competitive pricing.
Long contract duration may lead to cost overruns.
Lack of transparency in pricing due to no competition.
Potential for vendor lock-in with critical defense technology.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $717.8 million to RAYTHEON COMPANY. TOMAHAWK BLOCK IV MISSILE PROCUREMENT FOR FY09

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 $717.8 million.

What is the period of performance?

Start: 2009-03-31. End: 2028-07-31.

What is the justification for the sole-source award, and have alternative competitive strategies been considered?

The justification for a sole-source award typically involves unique capabilities or proprietary technology. However, without a competitive process, it's difficult to ascertain if alternatives were explored or if this decision maximizes taxpayer value. Further documentation on the sole-source justification is needed.

How does the per-unit cost of the Tomahawk Block IV missile compare to previous versions or similar systems?

Benchmarking the per-unit cost is challenging without competitive data. Analysis of historical pricing for Tomahawk variants and comparisons to similar guided missile systems from other manufacturers would be necessary to assess cost-effectiveness. The firm-fixed-price nature provides some cost certainty, but the baseline price is key.

What are the performance metrics and delivery schedules, and how are they being monitored to ensure effectiveness?

The contract spans from 2009 to 2028, indicating a long-term production and delivery schedule. Robust monitoring of performance metrics, quality control, and adherence to delivery timelines by the Defense Contract Management Agency is critical to ensure the effectiveness of the procured missiles and taxpayer investment.

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: N0001909R0207

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp (UEI: 001344142)

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

Financial Breakdown

Contract Ceiling: $719,778,478

Exercised Options: $719,778,478

Current Obligation: $717,768,565

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline