Raytheon Awarded $794.6M for Guided Missile Subsystems by Navy, Limited Competition

Contract Overview

Contract Amount: $306,704,327 ($306.7M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2003-12-22

End Date: 2012-03-19

Contract Duration: 3,010 days

Daily Burn Rate: $101.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200406!042101!1700!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002404C5456 !A!N! !N! ! !20031222!20070330!794598573!794598573!001339159!N!RAYTHEON COMPANY !1151 EAST HERMANS ROAD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA !ARIZONA !+000038880560!N!N!000038880560!1427!GUIDED MISSILE SUBSYSTEMS !A2 !MISSILE AND SPACE SYSTEMS !000 !* !334511!E! !3! ! ! ! ! !99990909!B! ! !A! !D!U!J!1!001!N!1A!A!Y!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!B!Y! ! ! !Y! ! !0001! !

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $306.7 million to RAYTHEON COMPANY for work described as: 200406!042101!1700!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002404C5456 !A!N! !N! ! !20031222!20070330!794598573!794598573!001339159!N!RAYTHEON COMPANY !1151 EAST HERMANS ROAD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA… Key points: 1. The contract value of $794.6 million for guided missile subsystems represents a significant investment in naval defense capabilities. 2. Raytheon Company, a major defense contractor, secured this award, indicating a concentrated market for these specialized systems. 3. The 'NOT COMPETED' status raises concerns about potential overpricing and lack of market-driven cost efficiencies. 4. This spending falls within the 'Defense' sector, specifically focusing on advanced missile and space systems manufacturing.

Value Assessment

Rating: questionable

The contract value of $794.6 million appears substantial. Without comparable contract data or detailed cost breakdowns, it's difficult to definitively assess its value. However, the lack of competition suggests potential for inflated pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not competed, suggesting a sole-source or limited competition scenario. This limits price discovery and potentially leads to higher costs for taxpayers as competitive pressures are absent.

Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for these guided missile subsystems, as market forces were not fully leveraged to achieve the lowest possible price.

Public Impact

Taxpayers may be overpaying for critical missile components due to the absence of competitive bidding. The award to a single major contractor could stifle innovation and reduce the availability of alternative solutions in the future. This significant expenditure on specialized defense systems highlights the ongoing investment in national security infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of Competition
Potential for Overpricing
Limited Transparency

Positive Signals

Award to Established Contractor
Supports National Defense

Sector Analysis

This contract falls under the Defense sector, specifically for the manufacturing of guided missile subsystems. Spending benchmarks in this niche area are often high due to specialized R&D and production requirements, but competition is key to controlling costs.

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. This award appears to be directed towards a large, established defense firm.

Oversight & Accountability

The 'NOT COMPETED' designation warrants further oversight to ensure the pricing is fair and reasonable. Accountability for the justification of limited competition and the resulting cost should be a priority.

Related Government Programs

Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competitive bidding raises concerns about fair pricing.
Potential for cost overruns due to absence of market pressure.
Limited transparency in the procurement process.
Dependency on a single contractor for critical defense components.
Insufficient data to fully assess value for money.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $306.7 million to RAYTHEON COMPANY. 200406!042101!1700!BZ005 !NAVAL SEA SYSTEMS COMMAND !N0002404C5456 !A!N! !N! ! !20031222!20070330!794598573!794598573!001339159!N!RAYTHEON COMPANY !1151 EAST HERMANS ROAD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA !ARIZONA !+000038880560!N!N!000038880560!1427!GUIDED MISSILE SUBSYSTEMS !A2 !MISSILE AND SPACE SYSTEMS !000 !* !334511!E! !3! ! ! ! ! !999

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 $306.7 million.

What is the period of performance?

Start: 2003-12-22. End: 2012-03-19.

What was the specific justification for not competing this contract, and were alternative sources considered?

The justification for not competing this contract is not detailed in the provided data. Typically, sole-source or limited competition awards are made when only one responsible source can provide the required supplies or services, or in cases of urgent need. A thorough review would be needed to confirm the validity of such a justification and whether market research was adequately performed to identify potential competitors.

How does the per-unit cost of these guided missile subsystems compare to similar systems acquired through competitive processes?

Without access to detailed cost breakdowns and comparable contract data for similar guided missile subsystems acquired competitively, a direct per-unit cost comparison is not possible. The lack of competition in this award suggests that such a comparison might reveal a higher cost than if multiple bids were solicited, potentially indicating a lack of price efficiency.

What is the long-term strategic impact of awarding such a significant contract without competition on the broader defense industrial base?

Awarding significant contracts without competition can concentrate market power with incumbent firms, potentially reducing incentives for innovation and efficiency. It may also limit opportunities for emerging companies and create dependencies on a single supplier, which could pose risks to the defense industrial base's resilience and adaptability in the long run.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: GUIDED MISSLES

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: 1151 EAST HERMANS ROAD, TUCSON, AZ, 90

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Cost or Pricing Data: YES

Timeline