Raytheon Company awarded $582M for NGJ-MB Production Lot 5 System Shipsets by the Department of the Navy

Contract Overview

Contract Amount: $582,289,011 ($582.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2025-05-15

End Date: 2029-01-31

Contract Duration: 1,357 days

Daily Burn Rate: $429.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: NGJ-MB PRODUCTION LOT 5 SYSTEM SHIPSETS

Place of Performance

Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $582.3 million to RAYTHEON COMPANY for work described as: NGJ-MB PRODUCTION LOT 5 SYSTEM SHIPSETS Key points: 1. Contract awarded as a sole-source, indicating limited competition and potential for higher pricing. 2. Fixed Price Incentive contract type suggests shared risk between government and contractor, aiming for cost control. 3. Long contract duration of over 3 years may present risks related to technological obsolescence or changing requirements. 4. The contract is for system shipsets, implying a significant component of a larger defense platform. 5. No small business set-aside or subcontracting noted, potentially limiting opportunities for smaller enterprises. 6. High dollar value suggests a critical and complex defense system procurement.

Value Assessment

Rating: questionable

Benchmarking the value of this $582 million contract is challenging without specific performance metrics or comparable sole-source procurements. The fixed-price incentive structure aims to control costs, but the lack of competition inherently reduces the government's leverage in price negotiation. Without a competitive bidding process, it's difficult to ascertain if the pricing reflects fair market value or if it includes a premium due to the sole-source nature. Further analysis would require understanding the specific system's capabilities and the contractor's historical pricing for similar components.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Raytheon Company, was considered. This typically occurs when a system is unique, proprietary, or requires specialized expertise only available from a single source. The lack of competition means the Department of the Navy did not benefit from a bidding process that could drive down prices through market forces. While sole-source awards are sometimes necessary for national security or technological reasons, they limit the government's ability to explore alternative solutions or achieve the best possible price.

Taxpayer Impact: The absence of competition for this substantial contract means taxpayers may not be receiving the most cost-effective solution. Without competitive pressure, the awarded price might be higher than what could have been achieved through an open bidding process.

Public Impact

The primary beneficiaries are the Department of the Navy and potentially other branches of the U.S. military that utilize the Next Generation Jammer (NGJ) system. The contract delivers critical electronic warfare system shipsets, enhancing the combat capabilities of naval aircraft. The geographic impact is primarily within the United States, with potential deployment globally wherever naval aviation operates. Workforce implications include employment for engineers, technicians, and manufacturing personnel at Raytheon Company and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Long contract duration (over 3 years) increases risk of cost overruns due to inflation or scope creep.
Lack of small business participation noted, potentially missing opportunities for economic inclusion.
Fixed Price Incentive contract, while sharing risk, can still lead to higher final costs if incentives are not structured optimally.
Specific system details are not publicly available, making independent value assessment difficult.

Positive Signals

Fixed Price Incentive contract type aims to align contractor and government interests in cost control.
Award to a known contractor (Raytheon) suggests a degree of confidence in their capability to deliver complex systems.
The contract supports a critical defense capability (Next Generation Jammer), enhancing national security.
Long-term contract provides stability for production and potential for follow-on work.

Sector Analysis

The Next Generation Jammer (NGJ) falls within the broader defense electronics and electronic warfare sector. This sector is characterized by high R&D investment, long product lifecycles, and significant government procurement. The market is dominated by a few large defense contractors due to the complexity and scale of the systems. Comparable spending benchmarks for advanced electronic warfare systems can range from tens of millions to billions of dollars, depending on the system's sophistication and quantity. This contract represents a significant investment in a key capability for naval aviation.

Small Business Impact

This contract does not appear to include a small business set-aside, nor is there explicit mention of subcontracting goals for small businesses. This suggests that the primary awardee, Raytheon Company, will likely perform the majority of the work. The absence of specific small business provisions could limit opportunities for smaller firms to participate in this large defense procurement, potentially impacting the broader small business defense ecosystem. Further investigation into Raytheon's subcontracting plans would be necessary to fully assess the impact on small businesses.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Navy's contracting and program management offices. Accountability measures are embedded within the Fixed Price Incentive contract terms, which link contractor profit to performance against cost targets. Transparency is limited due to the sole-source nature and the classified aspects of advanced defense systems. The Inspector General for the Department of Defense may conduct audits or investigations as deemed necessary to ensure proper use of funds and contract compliance.

Related Government Programs

Next Generation Jammer (NGJ) Program
Naval Air Systems Command (NAVAIR) Contracts
Electronic Warfare Systems Procurement
Department of Defense Major Defense Acquisition Programs

Risk Flags

Sole Source Award
Lack of Competition
Long Contract Duration
Potential for Cost Overruns (FPI structure)
Limited Small Business Participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $582.3 million to RAYTHEON COMPANY. NGJ-MB PRODUCTION LOT 5 SYSTEM SHIPSETS

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 $582.3 million.

What is the period of performance?

Start: 2025-05-15. End: 2029-01-31.

What is Raytheon Company's track record with similar sole-source defense contracts?

Raytheon Company, now part of RTX, has a long history of securing sole-source contracts for complex defense systems, particularly in areas like electronic warfare, radar, and missiles. These awards are often justified by the proprietary nature of the technology, the need for specialized integration with existing platforms, or the lack of viable alternative suppliers. While such contracts provide essential capabilities, they also raise concerns about price competitiveness. Historically, sole-source awards can sometimes result in higher costs compared to competitively bid contracts. Raytheon's performance on these contracts is typically monitored closely by the Department of Defense, with oversight mechanisms in place to ensure delivery and adherence to contract terms, though the absence of competition limits direct price comparisons.

How does the $582 million value compare to other NGJ program procurements or similar electronic warfare systems?

The $582 million awarded for NGJ-MB Production Lot 5 System Shipsets represents a significant investment, consistent with the procurement of advanced, mission-critical defense systems. The Next Generation Jammer (NGJ) program itself is a multi-billion dollar effort aimed at replacing the legacy ALQ-99 system. Lot 5 specifically pertains to the production of the Mid-Band (MB) variant. While exact figures for previous lots or comparable systems are often sensitive, this award aligns with the expected cost profile for producing sophisticated electronic warfare pods. The value reflects the complexity of the technology, the integration required for naval aircraft, and the production scale. Without detailed cost breakdowns or direct comparisons to competitively bid systems of identical capability, it's challenging to definitively benchmark value, but the amount is substantial and indicative of a high-priority defense capability.

What are the primary risks associated with this sole-source, fixed-price incentive contract?

This contract presents several key risks. Firstly, the sole-source nature inherently limits price competition, potentially leading to a higher-than-market price for the government. Secondly, while the Fixed Price Incentive (FPI) structure aims to control costs by sharing savings or cost overruns between the government and contractor, it can still result in significant expenditures if targets are missed or if the initial cost estimates are inaccurate. The contractor's profit is tied to meeting performance and cost goals, but the government still bears a substantial portion of the financial risk. Thirdly, the long contract duration (ending in 2029) increases the risk of technological obsolescence, changing operational requirements, or unforeseen economic factors like inflation impacting the final cost. Finally, the lack of transparency inherent in sole-source defense procurements makes independent risk assessment difficult.

What is the expected effectiveness and performance context for the NGJ-MB system shipsets?

The Next Generation Jammer - Mid-Band (NGJ-MB) system is designed to provide advanced airborne electronic attack capabilities. Its primary function is to disrupt, deny, and degrade enemy radar and communication systems, thereby protecting U.S. and allied forces. The system is intended to counter advanced and emerging threats in the electromagnetic spectrum. The 'shipsets' refer to the complete sets of components required for installation on specific aircraft platforms, likely the EA-18G Growler. The performance context is one of evolving threats in electronic warfare, where sophisticated jamming and deception capabilities are crucial for mission success and survivability in contested environments. This contract ensures the continued production and fielding of a vital capability for naval aviation.

How has federal spending on electronic warfare systems evolved, and where does this contract fit?

Federal spending on electronic warfare (EW) systems has been consistently significant and is projected to grow, driven by the increasing sophistication of adversary threats and the need for U.S. forces to maintain electromagnetic spectrum dominance. The Department of Defense prioritizes EW capabilities across all services. This contract for NGJ-MB Production Lot 5 System Shipsets fits squarely within this trend, representing a major investment in a next-generation EW system for naval aviation. It signifies a commitment to modernizing critical defense assets and addressing the evolving EW landscape. Historical spending on EW programs demonstrates a sustained demand for advanced jamming, sensing, and countermeasures, making this contract a continuation of a long-term strategic investment rather than an isolated expenditure.

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: N0001923R0118

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: $582,289,011

Exercised Options: $582,289,011

Current Obligation: $582,289,011

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline