DoD Awards Raytheon $546.6M for AIM-9X Lot 11 Production, Extending Contract to 2024
Contract Overview
Contract Amount: $546,576,838 ($546.6M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2011-09-29
End Date: 2024-03-20
Contract Duration: 4,556 days
Daily Burn Rate: $120.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: AIM-9X LOT 11 PRODUCTION
Place of Performance
Location: TUCSON, PIMA County, ARIZONA, 85756
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $546.6 million to RAYTHEON COMPANY for work described as: AIM-9X LOT 11 PRODUCTION Key points: 1. Significant contract value of $546.6M awarded to Raytheon Company. 2. Sole-source award raises questions about competition and potential price inflation. 3. Long contract duration (over 12 years) may indicate evolving requirements or limited alternatives. 4. Focus on guided missile manufacturing places this within the defense sector.
Value Assessment
Rating: questionable
The contract's large value and long duration, coupled with a sole-source award, suggest potential for overpricing. Benchmarking against similar missile production contracts would be necessary for a definitive assessment.
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 may lead to higher costs for taxpayers.
Taxpayer Impact: The absence of competition in this large contract likely results in higher costs for taxpayers compared to a competitively awarded contract.
Public Impact
Taxpayers are funding the production of advanced missile systems for the U.S. Navy. The long-term nature of the contract suggests ongoing reliance on this specific weapon system. Potential for cost overruns due to the sole-source nature of the award impacts defense budgets.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Long contract duration
- Lack of transparency in pricing
Positive Signals
- Essential defense capability
- Established contractor with proven technology
Sector Analysis
This contract falls within the defense sector, specifically the manufacturing of guided missiles. Spending in this area is critical for national security but requires careful oversight to ensure cost-effectiveness.
Small Business Impact
There is no indication of small business participation in this contract award. Further analysis would be needed to determine if subcontracting opportunities were explored or offered.
Oversight & Accountability
The sole-source nature of this contract warrants close oversight to ensure fair pricing and prevent potential waste. Regular reviews of performance and cost justification are crucial.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition.
- Long contract duration may obscure cost efficiencies.
- Lack of transparency on pricing justification.
- Potential for cost creep over the contract's life.
- No clear indication of small business involvement.
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 $546.6 million to RAYTHEON COMPANY. AIM-9X LOT 11 PRODUCTION
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 $546.6 million.
What is the period of performance?
Start: 2011-09-29. End: 2024-03-20.
What is the justification for the sole-source award, and has an alternatives analysis been conducted?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or a lack of viable alternatives. An alternatives analysis is crucial to demonstrate that no other sources could meet the requirement. Without this information, it's difficult to assess if the government truly exhausted all competitive options or if market research was insufficient.
How does the per-unit cost of the AIM-9X compare to similar missile systems or previous lots?
Benchmarking the per-unit cost against similar missile systems or previous production lots is essential for evaluating value. A significant increase in cost over time or compared to alternatives could indicate inefficiencies or a lack of competitive pressure. Without access to detailed cost data and comparative analyses, it's challenging to determine if this contract represents a fair price.
What are the long-term sustainment and upgrade costs associated with the AIM-9X program?
While this contract covers production, the total lifecycle cost of the AIM-9X program includes sustainment and potential future upgrades. Understanding these long-term costs is vital for accurate budgeting and assessing the overall value proposition. A sole-source production contract may set a precedent for future sole-source sustainment, potentially increasing long-term expenses.
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: N0001911R0001
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, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $549,161,322
Exercised Options: $546,760,179
Current Obligation: $546,576,838
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2011-09-29
Current End Date: 2024-03-20
Potential End Date: 2024-03-20 00:00:00
Last Modified: 2023-03-16
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