DoD Awards Raytheon $199M for SIP IV Hardware ECP, Ending 2027

Contract Overview

Contract Amount: $199,107,959 ($199.1M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2022-09-30

End Date: 2027-09-30

Contract Duration: 1,826 days

Daily Burn Rate: $109.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SIP IV HARDWARE ECP

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $199.1 million to RAYTHEON COMPANY for work described as: SIP IV HARDWARE ECP Key points: 1. Significant contract value of $199.1 million. 2. Sole-source award to Raytheon Company raises competition concerns. 3. Long contract duration of 5 years (1826 days) warrants close monitoring. 4. Guided Missile and Space Vehicle Manufacturing sector.

Value Assessment

Rating: questionable

The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed tightly. Benchmarking against similar contracts for guided missile systems is difficult without more specific cost breakdowns.

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.

Taxpayer Impact: The absence of competition may result in taxpayers paying a premium for the required hardware.

Public Impact

Taxpayers may be overpaying due to the sole-source nature of the award. The long-term nature of the contract requires sustained oversight to ensure value. Potential for cost overruns given the Cost Plus Fixed Fee structure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost Plus Fixed Fee contract type
Long contract duration

Positive Signals

Established contractor (Raytheon Company)
Clear end date for contract performance

Sector Analysis

This contract falls within the Guided Missile and Space Vehicle Manufacturing sector, a critical area for national defense. Spending in this sector is often characterized by high R&D costs and specialized manufacturing capabilities.

Small Business Impact

There is no indication that small businesses were involved in this sole-source award, suggesting limited opportunities for small business participation.

Oversight & Accountability

The sole-source nature of this contract necessitates robust oversight from the Department of the Navy to ensure cost control and effective performance throughout its duration.

Related Government Programs

Guided Missile and Space Vehicle Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competition
Potential for cost overruns
Long contract duration
Limited transparency on justification for sole-source award

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $199.1 million to RAYTHEON COMPANY. SIP IV HARDWARE ECP

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 $199.1 million.

What is the period of performance?

Start: 2022-09-30. End: 2027-09-30.

What specific justification was provided for the sole-source award, and were alternatives explored?

The provided data indicates the contract was 'NOT COMPETED'. A full justification for this sole-source award would typically involve detailing why only Raytheon Company could fulfill the requirement, such as unique capabilities, proprietary technology, or urgent national security needs. Without this justification, it's difficult to assess if taxpayer funds were used efficiently.

How will the Cost Plus Fixed Fee structure be managed to prevent cost overruns?

Effective management of a Cost Plus Fixed Fee contract requires stringent cost tracking, regular audits, and clear performance metrics. The Department of the Navy must implement rigorous oversight to ensure Raytheon operates within projected costs and that the fixed fee remains appropriate for the work performed. Benchmarking against similar projects could help identify potential cost anomalies.

What are the key performance indicators (KPIs) for this contract, and how will success be measured?

Key performance indicators for this contract would likely focus on the successful delivery of the SIP IV Hardware ECP, meeting technical specifications, and adhering to the schedule. Success will be measured by the contractor's ability to achieve these objectives within the agreed-upon cost and timeframe, ensuring the hardware functions as intended for its operational purpose.

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: N0001921R0047

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

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: $302,533,746

Exercised Options: $278,228,110

Current Obligation: $199,107,959

Subaward Activity

Number of Subawards: 67

Total Subaward Amount: $8,661,121

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline