Raytheon Awarded $79.4M for Guided Missile Components, Facing Limited Competition

Contract Overview

Contract Amount: $216,009,711 ($216.0M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2002-05-08

End Date: 2008-12-30

Contract Duration: 2,428 days

Daily Burn Rate: $89.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Defense

Official Description: 200208!022706!1700!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002402C5421 !A!N! !N! !20020508!20050331!794598573!794598573!001339159!N!RAYTHEON SYSTEMS CO !1151 E HERMANS RD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA !ARIZONA !+000014803480!N!N!000014803480!1420!GUIDED MISSILE COMPONENTS !A2 !MISSILE AND SPACE SYSTEMS !2CNA!RIM 7-H-2 NATO SEA SPARROW !336414!E! !3! ! ! ! ! !99990909!B! ! !N!Z!B!Y!S!1!001!N!4A!A!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! !Y! !PMS471!0001!

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $216.0 million to RAYTHEON COMPANY for work described as: 200208!022706!1700!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002402C5421 !A!N! !N! !20020508!20050331!794598573!794598573!001339159!N!RAYTHEON SYSTEMS CO !1151 E HERMANS RD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA … Key points: 1. Contract awarded to Raytheon Systems Co. for guided missile components. 2. Significant contract value of $79.4 million over a 2428-day period. 3. Competition is explicitly noted as 'NOT AVAILABLE FOR COMPETITION', raising concerns. 4. The sector is Defense, specifically missile and space systems manufacturing. 5. The contract type is a 'DEFINITIVE CONTRACT'.

Value Assessment

Rating: questionable

The contract value is $79.4 million. Without specific per-unit cost data or benchmarks for similar guided missile components, a direct pricing assessment is difficult. However, the lack of competition suggests potential for overpricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not available for competition, indicating a limited or sole-source procurement. This significantly restricts price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: The lack of competitive bidding may result in taxpayers paying more than necessary for these guided missile components.

Public Impact

Taxpayers may be overpaying due to the absence of competitive bidding. The Department of Defense relies on Raytheon for critical missile components. This contract highlights potential vulnerabilities in defense procurement processes. Long contract duration (2428 days) could lock in potentially suboptimal pricing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of Competition
Potential for Overpricing
Long Contract Duration

Positive Signals

Established Supplier
Definitive Contract

Sector Analysis

This contract falls within the Defense sector, specifically the manufacturing of guided missile components. Spending benchmarks for such specialized defense articles are often proprietary or difficult to ascertain publicly, but the value suggests a significant procurement.

Small Business Impact

The data does not indicate any specific provisions or considerations for small business participation in this contract. It appears to be a direct award to a large corporation.

Oversight & Accountability

The 'DEFINITIVE CONTRACT' designation and the 'NOT AVAILABLE FOR COMPETITION' status warrant further oversight to ensure fair pricing and effective use of taxpayer funds. Accountability for the procurement decision is crucial.

Related Government Programs

Guided Missile and Space Vehicle Manufacturing
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competitive bidding
Potential for inflated pricing
Limited transparency in procurement
Long-term dependency on a single supplier

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $216.0 million to RAYTHEON COMPANY. 200208!022706!1700!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002402C5421 !A!N! !N! !20020508!20050331!794598573!794598573!001339159!N!RAYTHEON SYSTEMS CO !1151 E HERMANS RD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA !ARIZONA !+000014803480!N!N!000014803480!1420!GUIDED MISSILE COMPONENTS !A2 !MISSILE AND SPACE SYSTEMS !2CNA!RIM 7-H-2 NATO SEA SPARROW !336414!E! !3! ! ! ! ! !99990909!B

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 $216.0 million.

What is the period of performance?

Start: 2002-05-08. End: 2008-12-30.

What specific factors prevented this contract from being open to competition, and were alternatives explored?

The data states 'NOT AVAILABLE FOR COMPETITION'. Without further details, it's impossible to know the specific reasons. This could be due to proprietary technology, urgent need, or existing sole-source relationships. Exploring alternatives, even if limited, is crucial for ensuring value for money and robust defense capabilities.

How does the unit cost of these guided missile components compare to similar items procured competitively?

Direct comparison is challenging without specific unit cost data and detailed specifications for comparable components. However, the absence of competition inherently limits the ability to benchmark pricing against market alternatives, raising concerns about potential cost inefficiencies for the taxpayer.

What is the long-term strategic impact of relying on a single source for these critical missile components?

Sole-source reliance can create supply chain vulnerabilities and reduce negotiating leverage over time. While it may ensure immediate availability, it could stifle innovation and lead to higher long-term costs. Diversification or strategic partnerships might be considered for future procurements to mitigate these risks.

Industry Classification

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

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline