DoD awards Raytheon $27.6M for Joint Standoff Weapon (JSOW-ER) flight tests, raising concerns over sole-source procurement

Contract Overview

Contract Amount: $27,647,846 ($27.6M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2017-05-25

End Date: 2022-05-29

Contract Duration: 1,830 days

Daily Burn Rate: $15.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: FLIGHT TEST DEMONSTRATION OF JOINT STANDOFF WEAPON AGM-154C-1 EXTENDED RANGE (JSOW-ER). IGF::OT::IGF

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $27.6 million to RAYTHEON COMPANY for work described as: FLIGHT TEST DEMONSTRATION OF JOINT STANDOFF WEAPON AGM-154C-1 EXTENDED RANGE (JSOW-ER). IGF::OT::IGF Key points: 1. The contract focuses on advanced missile technology, a critical area for defense capabilities. 2. Raytheon, a major defense contractor, holds a significant position in this specialized market. 3. Sole-source procurement for advanced weapons systems presents potential risks of inflated costs and limited innovation. 4. Spending in the guided missile manufacturing sector is substantial, requiring careful oversight.

Value Assessment

Rating: questionable

The contract's cost-plus-fixed-fee structure for a demonstration phase can lead to cost overruns. Benchmarking against similar advanced missile development contracts is difficult due to the specialized nature of JSOW-ER.

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 potentially leads to higher costs for taxpayers as competition is absent.

Taxpayer Impact: The lack of competition in awarding this contract may result in taxpayers paying a premium for the development and testing of the JSOW-ER missile.

Public Impact

Taxpayers fund advanced defense technology development, impacting national security capabilities. The procurement process for specialized defense systems influences the overall defense budget allocation. Lack of competition can lead to reduced innovation and higher prices for critical military assets.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost-plus-fixed-fee contract type
Lack of competition

Positive Signals

Development of advanced weapon systems
Potential enhancement of defense capabilities

Sector Analysis

This contract falls within the Defense sector, specifically guided missile manufacturing. Spending in this area is driven by national security needs and technological advancements, often involving high R&D costs and specialized production.

Small Business Impact

There is no indication of small business involvement in this specific contract award. The prime contractor, Raytheon, is a large aerospace and defense company.

Oversight & Accountability

The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. However, the sole-source nature raises questions about the effectiveness of oversight in ensuring fair pricing.

Related Government Programs

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

Risk Flags

Sole-source procurement limits competition.
Cost-plus-fixed-fee contract type can lead to cost overruns.
Lack of transparency in pricing due to no competition.
Potential for reduced innovation without competitive pressure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.6 million to RAYTHEON COMPANY. FLIGHT TEST DEMONSTRATION OF JOINT STANDOFF WEAPON AGM-154C-1 EXTENDED RANGE (JSOW-ER). IGF::OT::IGF

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 $27.6 million.

What is the period of performance?

Start: 2017-05-25. End: 2022-05-29.

What is the projected total cost for the full development and deployment of the JSOW-ER, and how does it compare to similar programs?

The current award is for $27.6 million for flight testing. The total program cost for full development and deployment is not specified in this data. A comprehensive comparison to similar programs is challenging without full program details, but the sole-source nature suggests potential for higher costs than a competitively bid program.

What are the specific risks associated with a sole-source award for advanced missile technology like the JSOW-ER?

Sole-source awards for advanced technology like the JSOW-ER carry risks of inflated pricing due to the absence of competitive pressure. There's also a risk of reduced innovation as the contractor may face less incentive to optimize costs or explore alternative solutions. Furthermore, it can limit the government's ability to leverage a broader range of technological expertise.

How effective is the cost-plus-fixed-fee contract structure in ensuring value for money during the demonstration phase of a weapon system?

The cost-plus-fixed-fee structure aims to incentivize the contractor by providing a fixed fee on top of allowable costs. However, for demonstration phases, it can be less effective in ensuring value for money if cost controls are weak, as the government bears the risk of cost overruns. Clear performance metrics and robust oversight are crucial to mitigate this risk.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001917R0009

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

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: $29,051,571

Exercised Options: $28,592,860

Current Obligation: $27,647,846

Subaward Activity

Number of Subawards: 89

Total Subaward Amount: $22,942,663

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline