Raytheon Awarded $794.6M for Guided Missiles, Primarily for RIM-66 Standard Missile

Contract Overview

Contract Amount: $210,768,155 ($210.8M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2000-03-21

End Date: 2007-09-30

Contract Duration: 2,749 days

Daily Burn Rate: $76.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200007!1700!002463!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002400C5390 !A!*!* !20000321!20040930!794598573!794598573!001339159!N!1KV54!RAYTHEON SYSTEMS CO (INC) !1151 E HERMANS RD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA !ARIZONA !0001!+000008653003!N!N!000000000000!1410!GUIDED MISSILES !A2 !MISSILE AND SPACE SYSTEMS !2CMN!RIM-66 STANDARD MISSILE(MED) !8711!3!*!*!*!B!A!*!D !Y!R!1!001!N!1G!A!Y!Z!* !* !N!C!*!A!A!A!A!A!A!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $210.8 million to RAYTHEON COMPANY for work described as: 200007!1700!002463!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002400C5390 !A!*!* !20000321!20040930!794598573!794598573!001339159!N!1KV54!RAYTHEON SYSTEMS CO (INC) !1151 E HERMANS RD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIM… Key points: 1. Significant contract value of $794.6 million for guided missile systems. 2. Raytheon Systems Co. is the sole contractor, indicating a lack of competition. 3. Contract duration is substantial at nearly 7.5 years, suggesting long-term need. 4. The sector is Defense, specifically IT and Missile Systems, a critical area for national security.

Value Assessment

Rating: good

The contract value of $794.6 million over approximately 7.5 years suggests a substantial investment. Benchmarking against similar large-scale defense contracts for missile systems would be necessary for a precise pricing assessment, but the scale indicates a significant procurement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This method limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive bidding process.

Taxpayer Impact: The lack of competition for a contract of this magnitude raises concerns about potential overspending and the efficient use of taxpayer funds.

Public Impact

Taxpayers may be paying a premium due to the absence of competitive bidding. The long-term nature of the contract could lock in current technology, potentially delaying upgrades. Dependence on a single supplier for critical missile systems poses a strategic risk. The contract supports advanced defense capabilities, contributing to national security. Significant economic activity and employment are likely generated in Arizona and related supply chains.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for cost overruns in sole-source contracts
Long contract duration may not reflect technological advancements

Positive Signals

Supports critical defense capabilities
Long-term commitment to a key defense contractor
Significant economic impact in Arizona

Sector Analysis

This contract falls within the Defense sector, specifically focusing on IT and Missile Systems. Spending in this area is typically high due to the critical nature of national security and the advanced technology involved. Benchmarks for similar large-scale missile system procurements would be relevant.

Small Business Impact

The data does not indicate any specific provisions or subcontracting goals for small businesses within this contract. Further investigation would be needed to determine the extent of small business participation.

Oversight & Accountability

The contract was awarded by the Naval Sea Systems Command, part of the Department of Defense. Oversight would typically involve contract management by the Defense Contract Management Agency to ensure compliance and performance.

Related Government Programs

Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Sole-source award limits competition and price discovery.
Potential for higher costs due to lack of competitive pressure.
Long contract duration may not align with rapid technological advancements.
Dependency on a single contractor for critical defense systems.
Lack of transparency regarding the justification for sole-source award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $210.8 million to RAYTHEON COMPANY. 200007!1700!002463!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002400C5390 !A!*!* !20000321!20040930!794598573!794598573!001339159!N!1KV54!RAYTHEON SYSTEMS CO (INC) !1151 E HERMANS RD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA !ARIZONA !0001!+000008653003!N!N!000000000000!1410!GUIDED MISSILES !A2 !MISSILE AND SPACE SYSTEMS !2CMN!RIM-66 STANDARD MISSILE(MED) !8711!3!*!*!*!B!A!*!D !Y!R!

Who is the contractor on this award?

The obligated recipient is RAYTHEON COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $210.8 million.

What is the period of performance?

Start: 2000-03-21. End: 2007-09-30.

What was the justification for awarding this contract on a sole-source basis rather than through a competitive process?

The justification for a sole-source award typically involves factors such as unique capabilities, urgent need, or the unavailability of alternative sources. Without specific documentation, it's difficult to ascertain the precise reason. However, for critical defense systems like guided missiles, specialized technology or proprietary knowledge held by a single entity can sometimes lead to sole-source procurements, though this often comes at a higher cost to the government.

How does the per-unit cost of the RIM-66 Standard Missile compare to similar systems procured competitively?

Direct comparison of per-unit cost is challenging without access to detailed pricing breakdowns and benchmarks for comparable systems. Given this was a sole-source award, it is plausible that the per-unit cost is higher than if it had been subject to competitive bidding. A thorough analysis would require comparing the contract's pricing structure against industry standards and other government procurements of similar missile systems.

What are the long-term implications of a sole-source contract for critical defense technology like guided missiles?

Long-term sole-source contracts can lead to a lack of innovation and efficiency due to reduced competitive pressure. It may also create a dependency on a single supplier, posing risks if that supplier faces financial difficulties or production issues. While ensuring a steady supply of a specific system, it could hinder the adoption of newer, potentially more effective or cost-efficient technologies developed by other firms.

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 1151 E HERMANS RD, TUCSON, AZ, 85706

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline