Raytheon Awarded $794.6M for Stinger Missile Systems, Facing Limited Competition

Contract Overview

Contract Amount: $365,663,919 ($365.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2003-06-19

End Date: 2011-09-30

Contract Duration: 3,025 days

Daily Burn Rate: $120.9K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200312!000011!1700!BY004 !NAVSEA WASHINGTON DC !N0002403C5448 !A!N! !N! !20030619!20060430!794598573!794598573!001339159!N!RAYTHEON COMPANY !1151 EAST HERMANS ROAD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA !ARIZONA !+000007374673!N!N!000007374673!1410!GUIDED MISSILES !A2 !MISSILE AND SPACE SYSTEMS !1CNA!STINGER (RMP) MANPORTABLE SAM!336414!E! !3! ! ! ! ! !99990909!B! ! !N!Z!B!Y!U!1!001!N!4A!A!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!Y! ! ! !Y! ! !0001! !

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $365.7 million to RAYTHEON COMPANY for work described as: 200312!000011!1700!BY004 !NAVSEA WASHINGTON DC !N0002403C5448 !A!N! !N! !20030619!20060430!794598573!794598573!001339159!N!RAYTHEON COMPANY !1151 EAST HERMANS ROAD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA … Key points: 1. The contract for Stinger (RMP) Manportable SAM systems is valued at $794.6 million. 2. Raytheon Company is the sole awardee, indicating a lack of broader competition. 3. The contract type is Cost Plus Fixed Fee, which can pose cost control risks. 4. Spending is concentrated in the Defense sector, specifically Guided Missile Manufacturing.

Value Assessment

Rating: questionable

The contract value of $794.6 million for Stinger missile systems appears high given the duration and the nature of the product. Benchmarking against similar missile system procurements would be necessary for a definitive assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not available for competition, suggesting a sole-source or limited competition award. This limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for these missile systems.

Public Impact

This significant defense contract directly impacts national security capabilities. The award to Raytheon Company supports jobs and economic activity in Arizona. Public funds are being allocated to advanced missile technology development and production. The long contract duration suggests a sustained need for these systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition raises concerns about cost-effectiveness.
Cost Plus Fixed Fee contracts can incentivize cost overruns.
Long contract duration may not reflect current technological needs.
Lack of transparency in pricing due to limited competition.

Positive Signals

Ensures continued availability of critical defense assets.
Supports a key defense contractor and its supply chain.
Addresses a specific military requirement for manportable SAMs.

Sector Analysis

This contract falls within the Defense sector, specifically the manufacturing of guided missiles. Spending in this area is critical for national security but requires careful oversight due to high costs and specialized technology.

Small Business Impact

There is no indication in the provided data that small businesses were involved in this contract, either as prime contractors or subcontractors. Further investigation would be needed to determine any small business participation.

Oversight & Accountability

The contract was awarded by the Department of Defense through the NAVSEA, with oversight likely managed by the Defense Contract Management Agency. The long duration and cost-plus nature warrant robust oversight to ensure fiscal responsibility.

Related Government Programs

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

Risk Flags

Limited competition.
Cost Plus Fixed Fee contract type.
Long contract duration.
Potential for cost overruns.
Lack of transparency in pricing.
Potential for system obsolescence.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $365.7 million to RAYTHEON COMPANY. 200312!000011!1700!BY004 !NAVSEA WASHINGTON DC !N0002403C5448 !A!N! !N! !20030619!20060430!794598573!794598573!001339159!N!RAYTHEON COMPANY !1151 EAST HERMANS ROAD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA !ARIZONA !+000007374673!N!N!000007374673!1410!GUIDED MISSILES !A2 !MISSILE AND SPACE SYSTEMS !1CNA!STINGER (RMP) MANPORTABLE SAM!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 $365.7 million.

What is the period of performance?

Start: 2003-06-19. End: 2011-09-30.

What is the specific justification for the limited competition award for the Stinger missile systems?

The provided data states the contract was 'NOT AVAILABLE FOR COMPETITION.' A detailed justification would typically be required for such awards, often citing reasons like unique capabilities, urgent need, or lack of alternative sources. Without this justification, it's difficult to assess if the limited competition was truly warranted or if it represents a missed opportunity for better pricing.

How does the Cost Plus Fixed Fee structure impact the government's risk in this contract?

A Cost Plus Fixed Fee (CPFF) contract allows the contractor to recover all allowable costs plus a predetermined fixed fee. While the fee is fixed, the total cost to the government can fluctuate significantly if actual costs exceed estimates. This structure shifts some of the cost risk to the government, as they bear the burden of cost overruns, potentially leading to higher overall expenditure than anticipated.

What is the projected obsolescence risk for the Stinger (RMP) system given the contract's end date in 2011?

The contract's original end date was September 30, 2011, with a completion date of April 30, 2006, and a modification date of June 19, 2003. Given that the contract concluded over a decade ago, there is a significant risk of obsolescence for the Stinger (RMP) systems procured under this award. Modern threats and technological advancements may render these systems less effective or obsolete, necessitating future upgrades or replacements.

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 PLUS FIXED FEE (U)

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