Raytheon's AIM-9X missile contract exceeds $327 million, awarded via sole-source procurement

Contract Overview

Contract Amount: $327,687,053 ($327.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2009-06-15

End Date: 2024-03-20

Contract Duration: 5,392 days

Daily Burn Rate: $60.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AIM-9X - BLOCK I TACTICAL MISSILE

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $327.7 million to RAYTHEON COMPANY for work described as: AIM-9X - BLOCK I TACTICAL MISSILE Key points: 1. The contract value represents significant investment in tactical missile technology. 2. Sole-source award raises questions about competitive pricing and potential cost efficiencies. 3. Long contract duration (over 14 years) suggests a sustained need for this capability. 4. The firm-fixed-price structure aims to control costs, but initial pricing needs scrutiny. 5. Focus on guided missile manufacturing highlights a critical defense sector. 6. The contract's performance period extends well into the future, indicating ongoing program importance.

Value Assessment

Rating: questionable

Benchmarking the value of the AIM-9X missile is challenging without direct comparisons to similar sole-source awards. The total contract value of over $327 million over its extended period suggests a substantial investment. However, the lack of competition makes it difficult to assess if this represents optimal value for money. A detailed cost breakdown and comparison to industry benchmarks for similar missile systems would be necessary to definitively evaluate pricing and value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Raytheon Company, was considered. This approach is typically used when a unique capability is required, or when only one source can fulfill the requirement. The absence of competition limits the government's ability to leverage market forces to drive down prices and ensure the most cost-effective solution is selected.

Taxpayer Impact: The sole-source nature of this award means taxpayers may not be benefiting from the potential cost savings that could arise from a competitive bidding process. Without competing offers, there is less pressure on the contractor to offer the lowest possible price.

Public Impact

The primary beneficiaries are the U.S. Navy and potentially other branches of the military requiring advanced air-to-air missile capabilities. The contract delivers advanced tactical missiles crucial for air defense and combat operations. The geographic impact is primarily within Arizona, where Raytheon's manufacturing facilities are located. This contract supports specialized jobs in the defense manufacturing sector, particularly in guided missile production.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source awards can reduce government leverage in price negotiations.
Long-term contracts can sometimes lock in outdated technology if not managed carefully.

Positive Signals

Firm-fixed-price contract type helps to control costs and provides predictability.
The AIM-9X is a critical component of U.S. air superiority.
The extended performance period indicates a stable and ongoing need for the system.

Sector Analysis

The defense sector, specifically guided missile and space vehicle manufacturing, is characterized by high R&D costs, long product development cycles, and significant government reliance. This contract for the AIM-9X missile fits within this context, representing a substantial investment in a key defense capability. Comparable spending benchmarks would typically involve other major missile system procurements, which often run into hundreds of millions or billions of dollars over their lifecycle.

Small Business Impact

There is no indication of small business set-asides or subcontracting requirements explicitly mentioned in the provided data. As a sole-source award to a large prime contractor, the direct impact on small businesses is unclear without further information on Raytheon's subcontracting plans. However, large defense contracts often involve a supply chain that includes numerous small businesses, so there could be indirect benefits.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, which places cost risk on the contractor. Transparency is limited due to the sole-source nature, but contract awards are generally reported. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse.

Related Government Programs

Other Air-to-Air Missile Programs
Tactical Missile Procurement
Naval Aviation Systems
Defense Advanced Weapons Systems

Risk Flags

Sole-source procurement
Long contract duration
Lack of public cost comparison data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $327.7 million to RAYTHEON COMPANY. AIM-9X - BLOCK I TACTICAL MISSILE

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 $327.7 million.

What is the period of performance?

Start: 2009-06-15. End: 2024-03-20.

What is the historical spending trend for the AIM-9X missile program?

Historical spending data for the AIM-9X program, prior to this specific contract award, would reveal the cumulative investment made in this missile system over time. Analyzing past obligations and expenditures would provide context for the current contract's value and indicate whether spending has been consistent, increasing, or decreasing. Without access to historical obligation data, it's difficult to ascertain the full lifecycle cost and the program's long-term financial trajectory. However, the current contract's substantial value suggests a significant and ongoing commitment to this weapon system.

How does the per-unit cost of the AIM-9X compare to similar tactical missiles?

Determining the precise per-unit cost for the AIM-9X is challenging without detailed pricing breakdowns within the contract. However, based on the total contract value of over $327 million and assuming a significant number of units procured over its long duration, the per-unit cost is likely to be in the hundreds of thousands of dollars. Comparing this to other advanced tactical missiles, such as the AIM-120 AMRAAM or foreign equivalents, would require access to specific procurement data for those systems. Generally, advanced guided missiles are high-cost, low-volume items due to complex technology and stringent performance requirements.

What are the specific performance requirements and capabilities of the AIM-9X Block I?

The AIM-9X Block I is an infrared-guided, short-range, air-to-air missile designed for air combat. Its key capabilities include high off-boresight capability, allowing it to engage targets at extreme angles relative to the launching aircraft, and advanced countermeasures resistance. It features a high-resolution imaging infrared seeker and a thrust-vectoring control system for exceptional maneuverability. The Block I variant represented an upgrade over previous Sidewinder versions, enhancing target acquisition range, seeker performance, and kinematic capabilities, making it a formidable weapon against modern aerial threats.

What is Raytheon Company's track record with sole-source defense contracts?

Raytheon Company, now part of RTX, has a long history of securing sole-source contracts with the U.S. Department of Defense across various weapon systems. As a major defense contractor, it is often the sole or primary developer and manufacturer of specialized defense technologies. While sole-source awards can raise concerns about competition, they are often justified by the unique capabilities, proprietary technology, or established production lines that Raytheon possesses for systems like the AIM-9X. The company's extensive experience in missile development and production suggests a strong capability to deliver on such contracts, though oversight remains crucial.

What are the risks associated with a sole-source award for a critical defense asset like the AIM-9X?

The primary risk associated with a sole-source award for a critical defense asset like the AIM-9X is the potential for inflated costs due to the lack of competitive pressure. Without competing bids, the government has less leverage to negotiate the best possible price. Additionally, sole-source contracts can sometimes lead to complacency on the part of the contractor regarding innovation or efficiency improvements. There's also a risk that the government might become overly dependent on a single supplier, potentially creating supply chain vulnerabilities. Robust cost analysis and performance monitoring are essential to mitigate these risks.

How does the extended contract duration (over 14 years) impact program risk and cost?

An extended contract duration, such as the over 14 years for this AIM-9X award, can introduce several risks and cost implications. On the positive side, it can provide program stability and predictability for both the government and the contractor, potentially leading to more efficient production planning and workforce management. However, it also increases the risk of cost escalation due to inflation, potential changes in technology, or unforeseen program challenges over such a long period. Furthermore, a lengthy contract might reduce the government's flexibility to adapt to evolving threats or adopt newer technologies if they emerge during the contract's term. Careful contract management and periodic reviews are vital to mitigate these long-term risks.

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: N0001908R0053

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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

Financial Breakdown

Contract Ceiling: $327,743,289

Exercised Options: $327,721,578

Current Obligation: $327,687,053

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline