DoD awards Raytheon $90.5M for 102 JSOW missiles for Taiwan and Bahrain, with no competition

Contract Overview

Contract Amount: $90,501,125 ($90.5M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2023-12-28

End Date: 2028-02-29

Contract Duration: 1,524 days

Daily Burn Rate: $59.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PRODUCTION OF 102 JSOW AGM-153 BLOCK III MISSILES FOR TAIWAN AND BAHRAIN

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $90.5 million to RAYTHEON COMPANY for work described as: PRODUCTION OF 102 JSOW AGM-153 BLOCK III MISSILES FOR TAIWAN AND BAHRAIN Key points: 1. Significant award for advanced air-to-ground munitions. 2. Sole-source award to Raytheon, a major defense contractor. 3. Potential geopolitical implications due to Taiwan sale. 4. High value contract for specialized defense equipment.

Value Assessment

Rating: good

The contract value of $90.5M for 102 missiles appears reasonable given the advanced nature of the JSOW AGM-153 Block III. Benchmarking against similar advanced munition contracts would provide a more precise assessment, but the price per missile is within expected ranges for this technology.

Cost Per Unit: $887,265

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Raytheon. This limits price discovery and potentially leads to higher costs compared to a competitive procurement. The justification for sole-source is critical for assessing value.

Taxpayer Impact: Taxpayer funds are used for this acquisition, with the lack of competition potentially increasing the overall cost to the government and taxpayers.

Public Impact

Enhances Taiwan's defensive capabilities against potential threats. Supports U.S. foreign military sales objectives and alliances. Contributes to the operational readiness of both Taiwan and Bahrain. Represents a significant investment in advanced air-to-ground weaponry.

Waste & Efficiency Indicators

Waste Risk Score: 59 / 10

Warning Flags

Lack of competition
Sole-source justification unclear
Geopolitical sensitivities

Positive Signals

Acquisition of advanced munitions
Support for key allies
Long-term delivery schedule

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on missile and ordnance manufacturing. Spending in this area is driven by national security needs and geopolitical dynamics. Benchmarks for similar missile production contracts vary widely based on technology and quantity.

Small Business Impact

This contract was awarded directly to Raytheon Company, a large prime contractor. There is no indication of subcontracting opportunities for small businesses within the provided data, suggesting limited direct impact on the small business sector for this specific award.

Oversight & Accountability

The Department of the Navy is the contracting activity. Oversight will focus on contract performance, delivery schedules, and adherence to the firm-fixed-price terms. The sole-source nature warrants scrutiny to ensure fair pricing and justification.

Related Government Programs

Other Aircraft Parts and Auxiliary Equipment Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Sole-source award lacks competition
Potential for inflated pricing
Geopolitical risks associated with Taiwan sale
Limited transparency on justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $90.5 million to RAYTHEON COMPANY. PRODUCTION OF 102 JSOW AGM-153 BLOCK III MISSILES FOR TAIWAN AND BAHRAIN

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 $90.5 million.

What is the period of performance?

Start: 2023-12-28. End: 2028-02-29.

What is the specific justification for awarding this contract sole-source to Raytheon, and how does it align with DoD's competitive procurement goals?

The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. For this contract, the specific justification needs to be reviewed to understand why competition was bypassed. Aligning with DoD's goals requires demonstrating that competition was not feasible or would not result in the best value, which can be challenging for sole-source awards.

What are the potential risks associated with supplying advanced munitions like the JSOW AGM-153 Block III to Taiwan, considering regional geopolitical tensions?

Supplying advanced munitions to Taiwan carries inherent geopolitical risks, primarily concerning reactions from China and potential escalation of regional tensions. There's also a risk of technology transfer or diversion. However, these sales are often framed as necessary for Taiwan's self-defense and deterrence, balancing security needs with diplomatic considerations.

How does the per-unit cost of these JSOW missiles compare to similar advanced air-to-ground munitions procured competitively by the U.S. or allied nations?

Without direct competitive benchmarks for this specific variant, a precise comparison is difficult. However, the per-unit cost of $887,265 suggests a high-technology munition. If competitive procurements for similar capabilities yield significantly lower per-unit costs, it would raise concerns about the value obtained through this sole-source award.

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

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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: $224,122,341

Exercised Options: $224,122,341

Current Obligation: $90,501,125

Subaward Activity

Number of Subawards: 26

Total Subaward Amount: $102,712,153

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