Raytheon Awarded $794.6M for Guided Missiles, Facing Limited Competition

Contract Overview

Contract Amount: $299,350,286 ($299.4M)

Contractor: Raytheon Company

Awarding Agency: Department of Defense

Start Date: 2004-12-03

End Date: 2011-11-30

Contract Duration: 2,553 days

Daily Burn Rate: $117.3K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200504!046713!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002405C5482 !A!N! !N! ! !20041203!20071231!794598573!794598573!001339159!N!RAYTHEON COMPANY !1151 E HERMANS RD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA !ARIZONA !+000007296812!N!N!000025795753!1410!GUIDED MISSILES !A2 !MISSILE AND SPACE SYSTEMS !000 !* !336414!E! !3! ! ! ! ! !20200930!B! ! !N!Z!B!Y!U!1!001!N!4A!A!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!B!Y! ! ! ! !1700!N00024!0001! !

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85734

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $299.4 million to RAYTHEON COMPANY for work described as: 200504!046713!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002405C5482 !A!N! !N! ! !20041203!20071231!794598573!794598573!001339159!N!RAYTHEON COMPANY !1151 E HERMANS RD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA… Key points: 1. Significant contract value of $794.6 million for guided missile systems. 2. Limited competition suggests potential for higher costs and reduced innovation. 3. High risk associated with defense procurement and sole-source awards. 4. Sector: Defense (Missile and Space Systems) - a critical but often less competitive area.

Value Assessment

Rating: questionable

The contract value of $794.6 million is substantial. Without a competitive bidding process, it's difficult to assess if this price represents fair market value compared to similar guided missile systems procured through open competition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not available for competition, indicating a sole-source or limited-source award. This significantly restricts price discovery and may lead to inflated costs for taxpayers.

Taxpayer Impact: Limited competition in defense contracts often results in higher prices, meaning taxpayers may be paying more than necessary for these guided missile systems.

Public Impact

Taxpayers may be overpaying due to the lack of competitive bidding. National security implications of potentially suboptimal pricing for critical defense assets. Potential for reduced technological advancement if innovation is stifled by limited competition.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition
Lack of price transparency
Potential for cost overruns

Positive Signals

Award to established defense contractor
Long-term contract potentially ensuring supply chain stability

Sector Analysis

This contract falls within the Defense sector, specifically for Guided Missiles. Defense spending on advanced weaponry is substantial, and contracts of this nature often involve complex technologies and specialized manufacturers, sometimes leading to limited competition.

Small Business Impact

The data does not indicate any specific provisions or set-asides for small businesses in this contract. Large defense contracts are often awarded to major prime contractors, with subcontracting opportunities for small businesses not always explicitly detailed in initial award data.

Oversight & Accountability

The limited competition aspect warrants further oversight to ensure the government is receiving the best possible value and that the pricing is justified. Accountability for cost justification in sole-source or limited-source procurements is crucial.

Related Government Programs

Guided Missile and Space Vehicle Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Limited competition raises concerns about fair pricing.
Potential for cost overruns due to lack of competitive pressure.
Lack of transparency in the procurement process.
Dependency on a single contractor for critical defense assets.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $299.4 million to RAYTHEON COMPANY. 200504!046713!1700!N00024!NAVAL SEA SYSTEMS COMMAND !N0002405C5482 !A!N! !N! ! !20041203!20071231!794598573!794598573!001339159!N!RAYTHEON COMPANY !1151 E HERMANS RD !TUCSON !AZ!85706!77000!019!04!TUCSON !PIMA !ARIZONA !+000007296812!N!N!000025795753!1410!GUIDED MISSILES !A2 !MISSILE AND SPACE SYSTEMS !000 !* !336414!E! !3! ! ! ! ! !202

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 $299.4 million.

What is the period of performance?

Start: 2004-12-03. End: 2011-11-30.

What is the justification for limiting competition on this guided missile contract?

The justification for limiting competition is not provided in the data. Typically, such limitations are based on factors like unique technical requirements, urgent needs, or the unavailability of other sources. However, without explicit documentation, it's impossible to verify the validity of these reasons and ensure taxpayer funds are used efficiently.

How does the lack of competition impact the risk profile of this contract?

The lack of competition significantly increases the risk profile. It reduces the government's leverage in price negotiations, potentially leading to cost overruns and a higher overall expenditure. Furthermore, it can stifle innovation as the contractor faces less pressure to improve efficiency or develop more cost-effective solutions.

What is the expected effectiveness of the guided missiles procured under this contract?

The effectiveness of the guided missiles themselves is not directly assessed by this contract data. The award focuses on the procurement process and contract value. While Raytheon is a known defense contractor, the actual performance and effectiveness of the missiles would be subject to separate testing, evaluation, and operational deployment assessments by the Department of the Navy.

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, 90

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

Contract Characteristics

Cost or Pricing Data: YES

Timeline