DoD Awards Raytheon $410M for JSOW AUR, Cables, and Spares Under Sole-Source Contract

Contract Overview

Contract Amount: $410,309,201 ($410.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2017-10-04

End Date: 2022-06-30

Contract Duration: 1,730 days

Daily Burn Rate: $237.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: JSOW AUR, CONTAINER, CABLES AND SPARES

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $410.3 million to RAYTHEON COMPANY for work described as: JSOW AUR, CONTAINER, CABLES AND SPARES Key points: 1. Significant investment in guided missile manufacturing. 2. Sole-source award to Raytheon Company raises competition concerns. 3. Contract duration of 1730 days suggests a long-term need. 4. High value contract with potential for significant taxpayer impact.

Value Assessment

Rating: questionable

The contract value of $410.3 million is substantial. Without available benchmark data or details on the specific components and services, assessing its pricing reasonableness against similar contracts is difficult. The firm-fixed-price structure aims to control costs, but the lack of competition complicates value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating a lack of competition. This method limits price discovery and may result in higher costs for the government compared to a competitive procurement. The justification for sole-source is not provided.

Taxpayer Impact: The sole-source nature of this award means taxpayers may not be receiving the best possible price due to the absence of competitive bidding.

Public Impact

Ensures continued availability of critical missile components for defense. Supports Raytheon Company's manufacturing capabilities and workforce. Potential for long-term sustainment and upgrade requirements. Impacts the readiness and operational capabilities of the Department of Defense.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price negotiation.
Lack of detailed cost breakdowns makes value assessment difficult.
Long contract duration could lead to cost overruns if not managed effectively.

Positive Signals

Firm-fixed-price contract provides cost certainty.
Ensures supply of essential defense equipment.

Sector Analysis

This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a critical component of the defense industry. Spending in this sector is often characterized by high R&D costs, specialized manufacturing, and significant government oversight due to national security implications. Benchmarks are difficult to establish due to the unique nature of such systems.

Small Business Impact

The data indicates this contract was not awarded to small businesses (sb: false). The prime contractor, Raytheon Company, is a large aerospace and defense firm. There is no information provided on subcontracting opportunities for small businesses within this award.

Oversight & Accountability

The Department of Defense, through the Defense Contract Management Agency, is responsible for overseeing this contract. However, the sole-source nature of the award necessitates robust oversight to ensure fair pricing and contract compliance, which may be challenging without competitive pressure.

Related Government Programs

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

Risk Flags

Lack of competition may lead to inflated prices.
Limited transparency on cost breakdown and justification for sole-source.
Potential for cost overruns over the contract's long duration.
Dependence on a single supplier for critical defense assets.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $410.3 million to RAYTHEON COMPANY. JSOW AUR, CONTAINER, CABLES AND SPARES

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 $410.3 million.

What is the period of performance?

Start: 2017-10-04. End: 2022-06-30.

What is the justification for awarding this contract on a sole-source basis, and what steps are being taken to ensure fair pricing?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or lack of alternative sources. Without this specific justification, it's difficult to assess. Robust oversight by the contracting agency is crucial to scrutinize costs, ensure the contractor is not exploiting the lack of competition, and verify that the price is fair and reasonable, potentially through detailed cost analysis and comparison with historical data or similar systems.

How does the $410.3 million cost compare to similar missile system procurements, and what factors contribute to this specific price point?

Direct comparison is challenging without detailed specifications of the JSOW AUR, its capabilities, and the included cables and spares. Factors influencing the price likely include advanced technology, research and development investment, manufacturing complexity, quantity ordered, and the firm-fixed-price structure. The sole-source nature means the government did not benefit from competitive bidding, potentially inflating the cost relative to what might be achieved in a competitive environment.

What is the long-term strategy for sustainment and potential upgrades of the JSOW AUR, and how will future procurements ensure better value for taxpayers?

The long-term strategy for sustainment and upgrades should ideally involve planning for future competitive procurements to drive down costs and encourage innovation. The government should explore opportunities to break down future requirements into smaller, more competitive packages or seek alternative sources for components and services. Transparency in future solicitations and clear performance metrics will be key to ensuring better value and accountability.

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 AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001917R0076

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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: $410,309,201

Exercised Options: $410,309,201

Current Obligation: $410,309,201

Subaward Activity

Number of Subawards: 216

Total Subaward Amount: $409,783,428

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline