DoD Awards Raytheon $670.5M for NGJ-MB LRIP III, a Sole-Source Acquisition
Contract Overview
Contract Amount: $670,500,824 ($670.5M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2023-04-01
End Date: 2026-11-29
Contract Duration: 1,338 days
Daily Burn Rate: $501.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: NGJ-MB LRIP III
Place of Performance
Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245
Plain-Language Summary
Department of Defense obligated $670.5 million to RAYTHEON COMPANY for work described as: NGJ-MB LRIP III Key points: 1. Significant investment in advanced naval defense technology. 2. Sole-source award to Raytheon raises questions about competition and potential cost efficiencies. 3. Long-term contract duration (1338 days) suggests a complex, multi-year development and production cycle. 4. Focus on Search, Detection, Navigation systems highlights critical military capabilities.
Value Assessment
Rating: questionable
The contract value of $670.5M for LRIP III is substantial. Without competitive bids, it's difficult to assess if this price represents fair value compared to potential market alternatives or previous contract phases.
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 limits price discovery and may result in higher costs than a competitive process would yield.
Taxpayer Impact: Taxpayer funds are being allocated without the benefit of competitive bidding, potentially leading to a less optimal use of resources.
Public Impact
Enhances naval warfare capabilities with advanced electronic warfare systems. Supports national security objectives by maintaining technological superiority. Potential for job creation within the defense manufacturing sector. Long-term commitment to a single provider could impact future innovation if alternatives are not explored.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Sole-source award
- High contract value
- Long contract duration
Positive Signals
- Critical defense capability development
- Award to established prime contractor
Sector Analysis
The defense sector, particularly in advanced electronic warfare systems like the Next Generation Jammer (NGJ), sees significant government investment. Benchmarks for similar sole-source, fixed-price incentive contracts are often high due to specialized R&D and production requirements.
Small Business Impact
The contract is awarded to Raytheon Company, a large prime contractor. There is no explicit information provided regarding subcontracting opportunities for small businesses within this specific award, which is common for major defense procurements.
Oversight & Accountability
The Department of the Navy is the contracting agency. Oversight will focus on contract performance, adherence to specifications, and cost control, especially given the sole-source nature and fixed-price incentive structure.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competitive bidding may lead to inflated costs.
- Sole-source nature limits opportunities for innovation from other vendors.
- Long contract duration increases exposure to cost overruns and schedule delays.
- Reliance on a single contractor could create supply chain risks.
- Potential for 'vendor lock-in' impacting future system upgrades or replacements.
Tags
search-detection-navigation-guidance-aer, department-of-defense, ca, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $670.5 million to RAYTHEON COMPANY. NGJ-MB LRIP III
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 $670.5 million.
What is the period of performance?
Start: 2023-04-01. End: 2026-11-29.
What is the justification for the sole-source award, and were alternative solutions considered?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. The Department of the Navy would need to provide documentation detailing the specific reasons and evidence that alternatives were thoroughly evaluated and found unsuitable before proceeding with a non-competitive award.
How does the unit cost compare to previous Low Rate Initial Production (LRIP) phases or similar systems?
Comparing the unit cost requires access to historical pricing data for NGJ-MB LRIP I and II, as well as benchmarks for comparable advanced electronic warfare systems. Without this data, assessing cost efficiency is challenging. The fixed-price incentive (FPI) structure suggests targets and ceilings, but the final negotiated price is key.
What are the key performance metrics and incentives tied to this contract to ensure effectiveness?
The contract type is Fixed Price Incentive (FPI), which includes target costs, target profits, price ceilings, and share ratios. Effectiveness is likely measured against technical performance specifications for the NGJ-MB system, such as jamming effectiveness, range, and reliability. Incentives would be tied to meeting or exceeding these performance targets within cost and schedule constraints.
Industry Classification
NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Product/Service Code: COMM/DETECT/COHERENT RADIATION
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0001922R0002
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Parent Company: RTX Corp
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: $671,586,004
Exercised Options: $671,586,004
Current Obligation: $670,500,824
Subaward Activity
Number of Subawards: 193
Total Subaward Amount: $270,689,689
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2023-04-01
Current End Date: 2026-11-29
Potential End Date: 2026-11-29 00:00:00
Last Modified: 2026-01-13
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