DoD's Raytheon Awarded $198.6M for Guided Missile Support, Lacking Competition
Contract Overview
Contract Amount: $198,635,446 ($198.6M)
Contractor: Raytheon Company
Awarding Agency: Department of Defense
Start Date: 2022-12-01
End Date: 2027-10-31
Contract Duration: 1,795 days
Daily Burn Rate: $110.7K/day
Competition Type: NOT COMPETED
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: ENGINEERING SUPPORT SERVICES (ESS)
Place of Performance
Location: TUCSON, PIMA County, ARIZONA, 85756
State: Arizona Government Spending
Plain-Language Summary
Department of Defense obligated $198.6 million to RAYTHEON COMPANY for work described as: ENGINEERING SUPPORT SERVICES (ESS) Key points: 1. Significant contract value of $198.6 million awarded to Raytheon Company. 2. Lack of competition raises concerns about potential overspending and limited innovation. 3. The contract is for Engineering Support Services (ESS) for guided missiles. 4. Sector context: Defense spending on specialized engineering services is substantial.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee contract type, combined with a lack of competition, makes it difficult to assess value. Benchmarking against similar contracts is challenging without competitive data.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and may result in higher costs for taxpayers compared to a competitive process.
Taxpayer Impact: The absence of competition could lead to taxpayers paying a premium for these engineering support services.
Public Impact
Taxpayers may be overpaying for essential engineering support services due to the lack of competitive bidding. The sole-source nature of the award could stifle innovation in guided missile technology. The Department of Defense relies on these services, making oversight crucial to ensure fair pricing and quality.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of Competition
- Cost-Plus Contract Type
- Sole-Source Award
Positive Signals
- Essential Defense Service
- Long-Term Contract Duration
Sector Analysis
This contract falls within the defense sector, specifically supporting guided missile and space vehicle manufacturing. Spending in this area is often characterized by high technical complexity and significant R&D investment.
Small Business Impact
There is no indication that small businesses were involved in this contract, as it was awarded directly to Raytheon Company.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the government is receiving fair value and that costs are managed effectively throughout the contract's life.
Related Government Programs
- Guided Missile and Space Vehicle Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competitive bidding may lead to higher costs.
- Cost-Plus contract type can incentivize spending.
- Sole-source award limits market-driven efficiencies.
- Potential for reduced innovation due to no competitive pressure.
- Long contract duration increases exposure to cost overruns.
Tags
guided-missile-and-space-vehicle-manufac, department-of-defense, az, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $198.6 million to RAYTHEON COMPANY. ENGINEERING SUPPORT SERVICES (ESS)
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 $198.6 million.
What is the period of performance?
Start: 2022-12-01. End: 2027-10-31.
How does the fixed fee in this Cost Plus Fixed Fee contract compare to industry standards for similar sole-source engineering support services?
Assessing the fairness of the fixed fee without competitive benchmarks is challenging. Typically, fixed fees in sole-source contracts are negotiated based on historical data, contractor overhead, and profit margins. A thorough review by the contracting officer would be necessary to ensure the fee is reasonable and reflects the level of risk and effort involved.
What are the specific risks associated with a sole-source award for critical defense engineering support services?
The primary risks include inflated pricing due to lack of competition, potential for reduced innovation as the contractor faces no pressure from rivals, and a diminished ability to leverage market competition for better terms. There's also a risk of vendor lock-in, making future transitions more difficult and costly.
Beyond pricing, what measures can the Department of the Navy implement to ensure the effectiveness and quality of these engineering support services?
The Navy can implement robust performance metrics and key performance indicators (KPIs) within the contract. Regular technical reviews, independent cost analyses, and strong contract management oversight are essential. Encouraging contractor innovation through incentives and maintaining open communication channels can also drive effectiveness.
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 COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0001917R0122
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: $198,635,446
Exercised Options: $198,635,446
Current Obligation: $198,635,446
Actual Outlays: $420,817
Subaward Activity
Number of Subawards: 22
Total Subaward Amount: $9,343,690
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0001920D0008
IDV Type: IDC
Timeline
Start Date: 2022-12-01
Current End Date: 2027-10-31
Potential End Date: 2027-10-31 00:00:00
Last Modified: 2025-12-01
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