Raytheon Company awarded $54.5M for HALO SUPPORT - PHASE 1 ammunition manufacturing by the Department of the Navy

Contract Overview

Contract Amount: $54,523,276 ($54.5M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2023-03-27

End Date: 2024-12-31

Contract Duration: 645 days

Daily Burn Rate: $84.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: HALO SUPPORT - PHASE 1

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $54.5 million to RAYTHEON COMPANY for work described as: HALO SUPPORT - PHASE 1 Key points: 1. Contract value represents a significant investment in specialized ammunition manufacturing. 2. Full and open competition suggests a potentially competitive bidding process. 3. Fixed-price contract type shifts cost risk to the contractor. 4. Delivery order structure indicates a phased approach to fulfilling requirements. 5. The contract duration of 645 days allows for a structured production timeline. 6. Geographic location in Arizona may indicate specific manufacturing capabilities or facilities.

Value Assessment

Rating: good

The contract value of $54.5 million for ammunition manufacturing appears reasonable given the scope of Phase 1 of the HALO SUPPORT program. Without specific details on the type and quantity of ammunition, a direct comparison to similar contracts is challenging. However, the firm fixed-price nature of the award suggests that the contractor, Raytheon Company, has assumed the cost risk, which can be a positive indicator of value if the project is executed efficiently. Benchmarking against industry standards for similar defense manufacturing contracts would provide further insight into the pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 4 bidders suggests a healthy level of competition for this requirement. This competitive environment is generally favorable for price discovery and can lead to more cost-effective outcomes for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: A competitive bidding process for ammunition manufacturing helps ensure that taxpayer dollars are used efficiently by driving down prices and encouraging innovation among defense contractors.

Public Impact

The Department of the Navy benefits from the acquisition of critical ammunition supplies. This contract supports the manufacturing of specialized ammunition, enhancing military readiness. The contract's performance is expected to occur in Arizona, potentially impacting the local workforce and economy. Raytheon Company, as the contractor, will be responsible for delivering the specified ammunition.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if production challenges arise, despite fixed-price terms.
Dependence on a single contractor for a critical defense supply chain component.
Geographic concentration of manufacturing in Arizona could pose logistical risks.

Positive Signals

Full and open competition suggests a robust selection process.
Firm fixed-price contract aligns contractor incentives with cost control.
Delivery order structure allows for phased execution and potential adjustments.
Award to a major defense contractor like Raytheon implies established manufacturing capabilities.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on ammunition production. The defense industry is characterized by high technological requirements, stringent quality control, and significant government oversight. The market for ammunition is substantial, driven by military readiness needs and geopolitical factors. Raytheon Company is a major player in this sector, with extensive experience in producing a wide range of defense systems and munitions. This contract represents a portion of the broader federal spending on defense procurement.

Small Business Impact

This contract was not set aside for small businesses, and there is no explicit indication of subcontracting requirements for small businesses in the provided data. The award to a large prime contractor like Raytheon Company suggests that the primary manufacturing will likely occur within their own facilities or through their established supply chains, which may or may not involve significant small business participation. Further analysis of subcontracting plans would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

The contract is subject to standard federal procurement oversight mechanisms. As a firm fixed-price contract awarded under full and open competition, oversight will likely focus on schedule adherence, quality assurance, and delivery performance. The Department of the Navy's contracting officers and potentially the Defense Contract Management Agency (DCMA) would be responsible for monitoring performance. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Ammunition Procurement
Naval Ammunition Production Programs
Defense Manufacturing Contracts
HALO SUPPORT Program

Risk Flags

Potential for supply chain disruption due to geographic concentration.
Risk of evolving military requirements impacting product relevance over contract duration.
Cost overruns borne by contractor under fixed-price terms could lead to performance issues if financial strain occurs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $54.5 million to RAYTHEON COMPANY. HALO SUPPORT - PHASE 1

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 $54.5 million.

What is the period of performance?

Start: 2023-03-27. End: 2024-12-31.

What is the specific type and quantity of ammunition being procured under HALO SUPPORT - PHASE 1?

The provided data does not specify the exact type or quantity of ammunition being procured under the HALO SUPPORT - PHASE 1 contract. The North American Industry Classification System (NAICS) code 332993, 'Ammunition (except Small Arms) Manufacturing,' indicates a broad category. Understanding the specific munition is crucial for assessing its strategic importance, cost drivers, and potential risks associated with its production. Without this detail, it is difficult to benchmark the value or compare it to similar, more specific contracts.

How does the $54.5 million contract value compare to historical spending on similar ammunition programs by the Department of the Navy?

Comparing the $54.5 million contract value for HALO SUPPORT - PHASE 1 to historical spending requires access to detailed historical procurement data for similar ammunition types and programs. The Department of the Navy procures a wide array of munitions, and costs can vary significantly based on technological complexity, quantity, and production scale. While Raytheon is a known supplier, this specific contract's value needs to be contextualized against past awards for comparable items to determine if it represents a favorable price point or a potential outlier. Further analysis would involve identifying specific munition categories and their historical contract values.

What are the key performance indicators (KPIs) and quality assurance measures for this ammunition manufacturing contract?

The provided data does not detail the specific Key Performance Indicators (KPIs) or quality assurance measures for the HALO SUPPORT - PHASE 1 contract. However, for ammunition manufacturing, critical KPIs typically include on-time delivery, defect rates, adherence to stringent military specifications (e.g., MIL-STD), and production yield. Quality assurance would involve rigorous testing, inspection protocols at various manufacturing stages, and material traceability. The firm fixed-price nature of the contract implies that meeting these quality standards within budget and schedule is the contractor's responsibility.

What is Raytheon Company's track record with the Department of the Navy for similar ammunition or defense manufacturing contracts?

Raytheon Company, now part of RTX, has a long-standing and extensive track record of supplying various defense systems and munitions to the Department of the Navy and other military branches. They are a major defense contractor with significant experience in complex manufacturing. While specific details on their performance for 'HALO SUPPORT - PHASE 1' are not in the provided data, their general history suggests a capacity to handle large-scale defense production. Performance reviews and past contract awards would offer a more granular assessment of their reliability and quality in similar contexts.

What are the potential risks associated with the 645-day duration and the firm fixed-price nature of this contract?

The 645-day duration for HALO SUPPORT - PHASE 1, while allowing for structured production, also presents risks related to potential changes in military requirements or technological advancements during the contract period. For a firm fixed-price contract, the primary risk lies with the contractor, Raytheon Company. If production costs exceed estimates due to unforeseen issues (e.g., material price volatility, manufacturing complexities, supply chain disruptions), Raytheon bears the financial burden. Conversely, the government benefits from cost certainty, but risks receiving a product that may be less advanced or suitable if requirements evolve significantly over the contract's lifespan.

How does the geographic concentration in Arizona (AZ) impact the supply chain resilience and delivery timelines for this contract?

Concentrating the manufacturing of this ammunition in Arizona could offer benefits such as leveraging existing specialized facilities or workforce expertise within the state. However, it also introduces supply chain risks. Dependence on a single geographic location can make the supply chain vulnerable to localized disruptions, such as natural disasters, labor disputes, or transportation issues specific to the region. This could potentially impact delivery timelines if not adequately mitigated through robust contingency planning and diversified sourcing strategies for raw materials and components.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0001922R0080

Offers Received: 4

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: $54,523,276

Exercised Options: $54,523,276

Current Obligation: $54,523,276

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA865621DA004

IDV Type: IDC

Timeline