Raytheon awarded $73.7M contract for miscellaneous weapons, supporting Aegis shipbuilding

Contract Overview

Contract Amount: $167,254,365 ($167.3M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 1999-12-30

End Date: 2011-11-30

Contract Duration: 4,353 days

Daily Burn Rate: $38.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200003!1700!001038!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002400C5137 !A!*!* !19991230!20030226!001410539!001339159!001339159!N!5D744!RAYTHEON COMPANY INC !528 BOSTON POST RD !SUDBURY !MA!01776!73755!017!25!WAYLAND !MIDDLESEX !MASS !0001!+000078907515!N!N!000000000000!1095!MISCELLANEOUS WEAPONS !A3 !SHIPS !2CNZ!CG-47 AEGIS !3669!3!*!*!*!B!A!*!D !N!J!1!001!N!1A!A!Y!A!* !* !N!C!*!A!A!A!A!A!A!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: SUDBURY, MIDDLESEX County, MASSACHUSETTS, 01776

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $167.3 million to RAYTHEON COMPANY for work described as: 200003!1700!001038!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002400C5137 !A!*!* !19991230!20030226!001410539!001339159!001339159!N!5D744!RAYTHEON COMPANY INC !528 BOSTON POST RD !SUDBURY !MA!01776!73755!017!25!WAYLAND !MID… Key points: 1. Contract value represents a significant investment in naval defense capabilities. 2. Sole-source award suggests limited market availability or specialized nature of the weapons system. 3. Contract duration of over 12 years indicates a long-term need for these components. 4. Fixed-price contract structure shifts some risk to the contractor. 5. Geographic concentration in Massachusetts for the contractor's facility. 6. The contract falls under the broader category of shipbuilding and weapon systems procurement.

Value Assessment

Rating: fair

The contract value of $73.7 million for miscellaneous weapons appears reasonable given the long performance period extending over a decade. However, without specific details on the exact nature of the 'miscellaneous weapons' and their technological sophistication, a direct comparison to similar contracts is challenging. The firm fixed-price structure suggests a defined scope, but the lack of competition raises questions about whether the government secured the best possible price. Benchmarking this against other naval weapon system procurements would be necessary for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating that only one vendor, Raytheon Company, was deemed capable of fulfilling the requirement. This could be due to proprietary technology, unique expertise, or a lack of other qualified suppliers in the market for this specific type of miscellaneous weapon. The limited competition means that price discovery through a bidding process was absent, potentially leading to a higher cost than if multiple vendors had competed.

Taxpayer Impact: For taxpayers, a sole-source award means there was no opportunity to benefit from competitive pricing, which could result in a higher overall expenditure for these essential defense components.

Public Impact

The primary beneficiaries are the U.S. Navy, receiving critical weapon components for shipbuilding and maintenance. Services delivered include the provision of miscellaneous weapons, likely integrated into naval platforms. The geographic impact is primarily within Massachusetts, where Raytheon's facility is located. Workforce implications include employment at Raytheon and its supply chain, supporting specialized manufacturing and engineering roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have led to a higher price than a competed contract.
Long contract duration could introduce risks related to technological obsolescence or changing defense needs.
Sole-source nature limits transparency into the contractor's cost structure and profit margins.

Positive Signals

Award to a major defense contractor with established capabilities in weapon systems.
Firm fixed-price contract provides cost certainty for the government once awarded.
Contract supports critical naval shipbuilding programs, aligning with national security objectives.

Sector Analysis

This contract falls within the Defense sector, specifically the shipbuilding and weapon systems sub-sector. The market for specialized naval weapons is often characterized by high barriers to entry, significant R&D investment, and a limited number of qualified suppliers, often leading to sole-source or limited competition awards. Comparable spending benchmarks would involve analyzing other contracts for similar weapon systems or components procured by the Navy or other military branches.

Small Business Impact

There is no indication of a small business set-aside for this contract. Given the sole-source nature and the likely specialized requirements, it is improbable that small businesses would be primary awardees. However, Raytheon, as a large prime contractor, may engage small businesses as subcontractors, though this is not explicitly detailed in the provided data. The impact on the small business ecosystem is likely indirect, through potential subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures would include contract performance reviews, quality assurance checks, and adherence to delivery schedules. Transparency is limited due to the sole-source nature, but contract awards are generally reported in federal procurement databases. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Aegis Combat System
Naval Surface Warfare
Shipbuilding and Repair
Defense Procurement
Weapons Systems Manufacturing

Risk Flags

Sole-source award limits price competition.
Long contract duration may pose obsolescence risks.
Lack of specific weapon details hinders full analysis.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $167.3 million to RAYTHEON COMPANY. 200003!1700!001038!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002400C5137 !A!*!* !19991230!20030226!001410539!001339159!001339159!N!5D744!RAYTHEON COMPANY INC !528 BOSTON POST RD !SUDBURY !MA!01776!73755!017!25!WAYLAND !MIDDLESEX !MASS !0001!+000078907515!N!N!000000000000!1095!MISCELLANEOUS WEAPONS !A3 !SHIPS !2CNZ!CG-47 AEGIS !3669!3!*!*!*!B!A!*!D !N!J!

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 $167.3 million.

What is the period of performance?

Start: 1999-12-30. End: 2011-11-30.

What specific types of 'miscellaneous weapons' were procured under this contract?

The provided data categorizes the procurement as 'MISCELLANEOUS WEAPONS' under the PSC code A3. This is a broad classification and does not specify the exact nature of the weapons. Given the context of the Naval Sea Systems Command and the CG-47 AEGIS program, these could range from components for missile systems, fire control systems, or other specialized armaments integral to naval platforms. Without further details from the contract award itself or associated documentation, pinpointing the exact weapon systems is not possible from this summary data. Further investigation into contract line item details or technical exhibits would be required.

How does the $73.7 million contract value compare to other Aegis-related procurements?

Directly comparing the $73.7 million for 'miscellaneous weapons' to other Aegis-related procurements requires identifying contracts for similar components or systems. The Aegis Combat System itself is a complex and expensive program, with individual contracts for radar, command and control, and weapon launchers often running into hundreds of millions or even billions of dollars. This $73.7 million contract appears to be for a specific subset of components rather than the entire system. To benchmark effectively, one would need to find contracts for comparable weapon modules or subsystems within the Aegis program or other naval platforms, considering factors like quantity, technological complexity, and contract type.

What are the primary risks associated with a sole-source award for naval weapon systems?

The primary risks associated with a sole-source award for naval weapon systems include potential overpricing due to the lack of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and a potential lack of alternative suppliers if the sole-source contractor experiences production issues or goes out of business. For taxpayers, this means a higher likelihood of paying a premium for the goods or services. It also limits the government's flexibility in seeking alternative solutions or technologies if market conditions change. Ensuring robust oversight and negotiation is crucial to mitigate these risks.

What is Raytheon's track record with the Naval Sea Systems Command and Aegis program?

Raytheon Company has a long and established track record as a major defense contractor, frequently working with the Naval Sea Systems Command (NAVSEA) and playing a significant role in various naval programs, including the Aegis Combat System. They are known for producing radar systems (like the SPY-1 and SPY-6), missile systems, and other critical components. This specific contract (N0002400C5137) is one of many they have held with NAVSEA over the years. Their extensive experience suggests a high level of technical capability and familiarity with Navy requirements, which likely contributed to their selection for this sole-source award.

How has spending on 'miscellaneous weapons' by the Department of the Navy evolved over time?

Analyzing the historical spending trends for 'miscellaneous weapons' by the Department of the Navy requires access to historical procurement data beyond this single contract. The provided data point is from 1999-2003 (with an extended period to 2011), representing a snapshot. Generally, spending on naval weapon systems fluctuates based on geopolitical conditions, shipbuilding plans, modernization efforts, and budget allocations. Contracts for weapon components are often tied to specific ship classes or upgrade programs. To understand the evolution, one would need to aggregate spending on similar PSC codes over multiple fiscal years and correlate it with major naval acquisition strategies and fleet readiness requirements.

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

Address: 528 BOSTON POST RD, SUDBURY, MA, 05

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline