Raytheon Company awarded $29.3M for JSOW NRE, a sole-source contract for aircraft parts

Contract Overview

Contract Amount: $29,351,041 ($29.4M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2022-07-01

End Date: 2025-10-06

Contract Duration: 1,193 days

Daily Burn Rate: $24.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: JSOW NRE

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $29.4 million to RAYTHEON COMPANY for work described as: JSOW NRE Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Firm Fixed Price contract type suggests cost certainty for the government. 3. Contract duration of 1193 days indicates a long-term need. 4. Performance expected in Arizona, potentially impacting local workforce. 5. No small business set-aside, raising questions about broader economic impact. 6. This contract falls under 'Other Aircraft Parts and Auxiliary Equipment Manufacturing'.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specific 'JSOW NRE' designation, which likely refers to Non-Recurring Engineering costs for a particular weapon system. Without comparable sole-source contracts for similar NRE work or detailed cost breakdowns, it's difficult to definitively assess value for money. The firm fixed price suggests cost control, but the lack of competition could lead to inflated pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Raytheon Company, was solicited. This approach bypasses the competitive bidding process, which typically drives down prices and fosters innovation. The justification for a sole-source award would need to be thoroughly reviewed to understand why full and open competition was not feasible.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as there is no competitive pressure to ensure the lowest possible price.

Public Impact

The primary beneficiary is the Department of the Navy, receiving specialized engineering services for the JSOW program. Services delivered include non-recurring engineering, crucial for the development and refinement of aircraft weapon systems. Geographic impact is concentrated in Arizona, where the contractor is located. Workforce implications may include specialized engineering roles within Raytheon's Arizona facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source award limits opportunities for other qualified businesses.
Transparency regarding the necessity of sole-source award could be improved.

Positive Signals

Firm Fixed Price contract provides cost certainty.
Long contract duration suggests a critical and ongoing need.
Award to a known defense contractor implies established capabilities.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on aircraft parts and auxiliary equipment manufacturing. The market for such specialized components is often dominated by a few large, established defense contractors due to high barriers to entry, including intellectual property, specialized manufacturing capabilities, and existing relationships with government agencies. The value of this contract, while significant, represents a small portion of the overall defense spending in this sub-sector.

Small Business Impact

The absence of a small business set-aside for this contract indicates that it was not specifically targeted to support small businesses. Given the specialized nature of non-recurring engineering for defense systems, it is common for such contracts to be awarded to large prime contractors. There is no explicit information provided regarding subcontracting plans to small businesses, which could be an area for further inquiry to ensure broader economic participation.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the Firm Fixed Price contract type, which obligates the contractor to deliver specified work within the agreed price. Transparency regarding the justification for the sole-source award and performance metrics would be key areas for assessment. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Joint Standoff Weapon (JSOW) Program
Department of Defense Research and Development Contracts
Naval Aviation Support Contracts
Aircraft Component Manufacturing

Risk Flags

Sole-source award lacks competitive pricing pressure.
Potential for cost overruns if NRE scope is underestimated by contractor.
Dependence on a single contractor for critical engineering services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.4 million to RAYTHEON COMPANY. JSOW NRE

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 $29.4 million.

What is the period of performance?

Start: 2022-07-01. End: 2025-10-06.

What is the specific nature of the 'JSOW NRE' work being contracted?

The 'JSOW NRE' likely refers to Non-Recurring Engineering costs associated with the Joint Standoff Weapon (JSOW) program. NRE typically involves the initial design, development, testing, and integration efforts required to bring a new product or system into existence, or to make significant modifications to an existing one. For the JSOW, this could encompass improvements to guidance systems, warheads, airframes, or software updates. The $29.3 million awarded covers these specialized engineering efforts, which are critical for maintaining and advancing the capabilities of this air-to-ground munition.

Why was this contract awarded on a sole-source basis instead of through full and open competition?

Sole-source awards are typically justified when only one responsible source is available or capable of meeting the government's needs. For specialized engineering work like NRE on a specific weapon system, the incumbent contractor, Raytheon Company, likely possesses unique knowledge, proprietary data, or existing infrastructure directly related to the JSOW. Competing this work could be deemed impractical or excessively costly due to the need to transfer sensitive technical data, re-qualify components, or duplicate extensive prior development efforts. A formal justification for other than full and open competition (JOFOC) would detail these reasons.

How does the Firm Fixed Price (FFP) contract type benefit the government in this context?

A Firm Fixed Price contract type is advantageous for the government as it establishes a ceiling price that the contractor must not exceed. This shifts the risk of cost overruns from the government to the contractor. For NRE work, where some development uncertainties may exist, an FFP contract provides a degree of cost certainty, allowing for more predictable budgeting. However, the contractor will factor potential risks into the initial price, which, in a sole-source scenario, might be higher than in a competitive environment.

What is the historical spending trend for JSOW NRE or similar contracts with Raytheon?

Analyzing historical spending for JSOW NRE specifically with Raytheon would require access to detailed contract databases. However, Raytheon is a major defense contractor with a long history of producing and supporting the JSOW. Past contracts for JSOW development, sustainment, or upgrades would likely show significant investment in engineering and production. Trends might indicate evolving capabilities, increased production volumes, or the incorporation of new technologies, all of which involve NRE costs. Without specific historical data, it's presumed that NRE spending fluctuates based on program milestones and modernization efforts.

What are the potential risks associated with this sole-source contract for the Department of the Navy?

The primary risk associated with this sole-source contract is the potential for paying a premium due to the lack of competition. Raytheon, as the sole provider, may have less incentive to minimize costs or maximize efficiency compared to a competitive scenario. Another risk is vendor lock-in, where the Navy becomes heavily reliant on Raytheon for future JSOW-related engineering, potentially limiting future flexibility or access to alternative solutions. Ensuring robust oversight and performance management is crucial to mitigate these risks and ensure the government receives fair value.

Are there any performance metrics or milestones associated with this $29.3M award?

While the provided data does not detail specific performance metrics or milestones, it is standard practice for contracts of this nature, especially those involving engineering work, to include such provisions. The 'JSOW NRE' designation implies a focus on achieving specific engineering development goals, such as completing design reviews, successful prototype testing, or integration with specific aircraft platforms. The contract's Firm Fixed Price nature suggests that these milestones would be tied to payment schedules, ensuring the contractor progresses towards defined deliverables within the agreed budget and timeframe.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001921R0239

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 2000 E EL SEGUNDO BLVD, EL SEGUNDO, CA, 90245

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: $29,351,041

Exercised Options: $29,351,041

Current Obligation: $29,351,041

Subaward Activity

Number of Subawards: 14

Total Subaward Amount: $1,788,298

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001920G0007

IDV Type: BOA

Timeline