Raytheon Company awarded $17.7M for guided missile manufacturing, with contract performance extending into July 2026

Contract Overview

Contract Amount: $17,701,485 ($17.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2025-06-06

End Date: 2026-07-06

Contract Duration: 395 days

Daily Burn Rate: $44.8K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 2ND ANNUAL DO

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $17.7 million to RAYTHEON COMPANY for work described as: 2ND ANNUAL DO Key points: 1. Value for money is difficult to assess without detailed cost breakdowns and comparisons to similar procurements. 2. The contract was sole-sourced, limiting competitive dynamics and potentially impacting price discovery. 3. Risk indicators include the sole-source nature and the long performance period, which could lead to cost overruns if not managed closely. 4. Performance context is limited to the contract duration and the specific product category. 5. This contract falls within the Defense sector, specifically in the manufacturing of guided missiles and space vehicles.

Value Assessment

Rating: fair

Benchmarking the value of this $17.7 million contract is challenging due to the sole-source nature and lack of publicly available comparable contract data. The firm-fixed-price structure provides some cost certainty, but without insight into the contractor's cost structure or market rates for similar components, a definitive value-for-money assessment is difficult. The duration of the contract, over a year, also necessitates careful monitoring to ensure costs remain aligned with expected performance.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder was solicited. This approach is typically used when a unique capability or proprietary technology is required, or in cases of urgent need. The lack of competition means that the Department of the Navy did not benefit from a bidding process that could have driven down prices through market forces. The justification for this sole-source award would need to be thoroughly reviewed to understand why full and open competition was not feasible.

Taxpayer Impact: Taxpayers may not have received the best possible price due to the absence of competitive bidding. This can lead to higher costs for the government compared to what might have been achieved in a competitive environment.

Public Impact

The primary beneficiaries are the Department of the Navy, which receives critical missile manufacturing capabilities. The services delivered include the production of guided missiles and space vehicles, essential for national defense. The geographic impact is primarily within Arizona, where Raytheon Company's facility is located, potentially supporting local employment. Workforce implications include the potential for sustained employment for skilled manufacturing and engineering roles at the contractor's facility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
Long contract duration increases potential for cost creep if not managed.
Lack of transparency in cost build-up for sole-source contracts.

Positive Signals

Firm-fixed-price contract provides cost certainty.
Award to an established defense contractor with existing capabilities.
Contract supports critical defense needs.

Sector Analysis

The defense manufacturing sector, particularly guided missile and space vehicle production, is characterized by high technological complexity and significant government investment. This contract fits within the broader landscape of defense procurement, where specialized contractors like Raytheon play a crucial role. Market size for such specialized components is substantial, driven by ongoing defense modernization and operational requirements. Comparable spending benchmarks are often internal to defense agencies due to the proprietary nature of many systems.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. There is no explicit information regarding subcontracting plans for small businesses. The focus on a large, established prime contractor like Raytheon suggests that direct opportunities for small businesses within this specific award may be limited unless they are part of Raytheon's established supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures would be tied to the firm-fixed-price terms and delivery schedules. Transparency is limited due to the sole-source nature and the proprietary aspects of defense manufacturing. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Guided Missile Manufacturing
Space Vehicle Manufacturing
Department of the Navy Procurement
Defense Contracts
Raytheon Company Contracts

Risk Flags

Sole-source award
Potential for cost overruns
Limited competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.7 million to RAYTHEON COMPANY. 2ND ANNUAL DO

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 $17.7 million.

What is the period of performance?

Start: 2025-06-06. End: 2026-07-06.

What is Raytheon Company's track record with the Department of the Navy for similar guided missile systems?

Raytheon Company has a long-standing and extensive track record with the Department of the Navy, serving as a primary contractor for numerous missile systems, including air-to-air, surface-to-air, and land-attack missiles. Their history includes successful development, production, and sustainment of critical platforms. While specific performance metrics for past contracts are often not publicly detailed, their continued selection for significant programs indicates a generally positive performance history. However, like many large defense contractors, they have faced scrutiny over cost, schedule, and technical performance on specific programs at various points in their history. A deeper dive into specific program reviews and contract close-outs would be needed for a comprehensive assessment.

How does the $17.7 million award compare to historical spending on guided missile manufacturing by the Department of the Navy?

The $17.7 million award represents a moderate-sized contract for guided missile manufacturing within the context of the Department of the Navy's overall budget. The Navy procures billions of dollars worth of defense systems annually, including a significant portion dedicated to missile programs. Individual missile system procurements can range from tens of millions to billions of dollars, depending on the system's complexity, quantity, and stage of development or production. This specific award appears to be for a particular production run or a component thereof. To provide a precise comparison, one would need to identify the specific missile system this order pertains to and then analyze historical spending data for that particular system or comparable systems over multiple fiscal years.

What are the primary risks associated with this sole-source contract for guided missile manufacturing?

The primary risks associated with this sole-source contract are centered around cost and competition. Firstly, the lack of competition means the government may not be achieving the most favorable pricing, as there's no market pressure to drive down costs. Raytheon, as the sole provider, has significant leverage. Secondly, there's a risk of cost escalation over the contract's duration, especially given the firm-fixed-price nature which, while providing certainty, can incentivize the contractor to manage costs tightly or potentially seek change orders if unforeseen issues arise. Thirdly, reliance on a single source can create supply chain vulnerabilities if Raytheon faces production disruptions. Finally, without competitive benchmarking, assessing the true 'value for money' becomes inherently more difficult, increasing the risk of overpayment for the delivered goods.

What is the expected program effectiveness or impact of this contract on the Department of the Navy's capabilities?

The expected program effectiveness hinges on the timely delivery of high-quality guided missiles or related components as specified in the contract. These systems are critical for maintaining the Department of the Navy's operational readiness and projecting power. The contract's contribution to effectiveness is directly tied to the specific missile system being produced; for instance, if it's for a key air defense missile, it enhances fleet protection. If it's for an offensive strike missile, it bolsters strike capabilities. The effectiveness is measured by the system's performance in training and, if necessary, in combat, as well as its integration into the broader naval warfare architecture. The contract's duration suggests it supports ongoing production or sustainment needs rather than new development.

Are there any known issues or controversies related to Raytheon's performance on previous guided missile contracts with the DoD?

Raytheon, like many large defense contractors, has had programs that have faced scrutiny or controversy over their history. Specific issues can range from cost overruns and schedule delays to technical performance challenges. For example, certain missile programs have undergone Nunn-McCurdy breach reviews due to exceeding cost growth thresholds. However, these are often program-specific and do not necessarily reflect the entirety of their contract performance. Without knowing the exact missile system covered by this $17.7 million delivery order, it's difficult to pinpoint specific past controversies directly relevant to this particular procurement. General contract performance databases and Government Accountability Office (GAO) reports would be the primary sources for identifying such issues.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001923R0114

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: $17,701,485

Exercised Options: $17,701,485

Current Obligation: $17,701,485

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001924D0114

IDV Type: IDC

Timeline